<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 17, 1995
REGISTRATION NO.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
AMERICAN HEALTH PROPERTIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 95-4084878
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
6400 SOUTH FIDDLER'S GREEN CIRCLE, SUITE 1800
ENGLEWOOD, COLORADO 80111
(303) 796-9793
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
GEOFFREY D. LEWIS, ESQ.
6400 SOUTH FIDDLER'S GREEN CIRCLE, SUITE 1800
ENGLEWOOD, COLORADO 80111
(303) 796-9793
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
PAUL HILTON FRANK H. GOLAY, JR.
DAVIS, GRAHAM & STUBBS, L.L.C. SULLIVAN & CROMWELL
370 17TH STREET, SUITE 4700 444 SOUTH FLOWER STREET
DENVER, COLORADO 80202 LOS ANGELES, CALIFORNIA 90071
(303) 892-9400 (213) 955-8000
</TABLE>
------------------------
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 the Registrant.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration 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 number of the earlier registration statement for the same
offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
(Cover continued on following page)
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED(1) REGISTERED PER UNIT(2)(3) OFFERING PRICE(4)(5) FEE(4)
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt
Securities(6)....
------------------------------------------------------------------------------------------------------
Preferred Stock,
$.01 par value,
Depositary
Shares.............
------------------------------------------------------------------------------------------------------
Common Stock, $.01
par value(7)(8)....
------------------------------------------------------------------------------------------------------
Warrants...........
------------------------------------------------------------------------------------------------------
Total.............. $275,000,000 100% $275,000,000 $94,828
======================================================================================================
</TABLE>
(1) Any securities registered hereunder may be sold separately or as units with
other securities registered hereunder. Subject to Footnote (4), there are
being registered hereunder an indeterminate principal amount of Debt
Securities, Preferred Stock (and Depositary Shares with respect thereto),
Common Stock and Warrants as may be sold from time to time by the
Registrant. This Registration Statement also covers contracts that may be
issued by the Registrant under which the counterparty may be required to
purchase Debt Securities, Preferred Stock, Depositary Shares, Common Stock
or Warrants. Such contracts would be issued with Debt Securities, Preferred
Stock, Depositary Shares, Common Stock or Warrants. There are also being
registered hereunder an indeterminate principal amount of Debt Securities,
Preferred Stock, Depositary Shares, Common Stock and Warrants as may be
issuable upon conversion or exchange of Debt Securities, Preferred Stock or
Warrants or pursuant to antidilution provisions thereof.
(2) In U.S. dollars or the equivalent thereof in one or more foreign currencies
or currency units or composite currencies, including the European Currency
Unit.
(3) The proposed maximum offering price per unit will be determined from time to
time by the Registrant in connection with the issuance by the Registrant of
the securities registered hereunder.
(4) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o). In no event will the aggregate initial offering
price of the Debt Securities, Preferred Stock, Depositary Shares, Common
Stock and Warrants issued under this Registration Statement exceed
$275,000,000 or the equivalent thereof in one or more foreign or composite
currencies.
(5) No separate consideration will be received for (i) Debt Securities, shares
of Common Stock or Preferred Stock or Depositary Shares that are issued upon
conversion of Debt Securities, Preferred Stock or Depositary Shares or (ii)
Debt Securities, shares of Common Stock or Preferred Stock or Depositary
Shares that are issued upon exercise of Warrants registered hereby.
(6) If any such Debt Securities are issued at an original issue discount, then
the offering price shall be in such greater principal amount as shall result
in an aggregate initial offering price of up to $275,000,000.
(7) The aggregate amount of Common Stock registered hereunder is limited to that
which is permissible under Rule 415(a)(4) under the Securities Act of 1933,
as amended.
(8) This Registration Statement also covers Preferred Stock Purchase Rights
under the Registrant's Preferred Stock Purchase Rights Plan, which are
attached to and tradeable only with the shares of Common Stock registered
hereby. No registration fees are required for such shares and such rights as
they will be issued for no additional consideration.
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED AUGUST 17, 1995
PROSPECTUS
[LOGO]
COMMON STOCK
DEBT SECURITIES
PREFERRED STOCK, DEPOSITARY SHARES
WARRANTS
------------------------
American Health Properties, Inc. (the "Company", which term refers to the
Company and its subsidiaries unless the context otherwise requires) may offer
from time to time (i) shares of Common Stock, par value $.01 per share ("Common
Stock") of the Company, (ii) debt securities ("Debt Securities"), which may be
either senior debt securities ("Senior Securities") or subordinated debt
securities ("Subordinated Securities"), consisting of debentures, notes, bonds
and/or other unsecured evidences of indebtedness in one or more series, which
Debt Securities may (or may not) be convertible into Common Stock, other Debt
Securities, or Preferred Stock, par value $.01 per share ("Preferred Stock") of
the Company or (iii) shares of Preferred Stock in one or more series, which may
(or may not) be convertible into Common Stock, and depositary shares
("Depositary Shares") representing a fractional interest in a share of Preferred
Stock; or (iv) warrants ("Warrants") to purchase Common Stock, Debt Securities,
Preferred Stock or Depositary Shares. The foregoing securities are collectively
referred to as the "Securities." The Securities will be offered at an aggregate
initial offering price not to exceed U.S. $275,000,000, at prices and on terms
to be determined at the time of sale.
The accompanying Prospectus Supplement sets forth with regard to the
particular Securities in respect of which this Prospectus is being delivered (i)
in the case of Common Stock, the number of shares of Common Stock and the terms
of the offering thereof; (ii) in the case of Debt Securities, the title,
aggregate principal amount, whether such Debt Securities are senior or
subordinate, denominations (which may be in United States dollars or in any
other currency, currencies or currency unit), maturity, premium (if any),
interest rate (which may be fixed or variable) or method of calculation thereof,
and time of payment of any interest, place or places where principal of (and
premium, if any) and interest on such Debt Securities will be payable, the
currency or currency unit in which principal, premium (if any) or interest is
payable, any terms for redemption at the option of the Company or the holder of
such Debt Securities, any terms for sinking fund payments, any conversion or
exchange rights, any listing on a securities exchange and the initial public
offering price and any other terms in connection with the offering and sale of
such Debt Securities; (iii) in the case of Preferred Stock and Depositary
Shares, the designation, number of shares, stated value and liquidation
preference per share, initial public offering price, dividend rate (or method of
calculation), dates on which dividends will be payable and dates from which
dividends will accrue, voting rights, any redemption or sinking fund provisions,
any conversion or exchange rights, whether the Company has elected to offer the
Preferred Stock in the form of Depositary Shares, any listing of the Preferred
Stock on a securities exchange, and any other terms in connection with the
offering and sale of such Preferred Stock; and (iv) in the case of Warrants, the
number and terms thereof, the designation and the number of Securities issuable
upon their exercise, the exercise price, any listing of the Warrants or the
underlying Securities on a securities exchange and any other terms in connection
with the offering, sale and exercise of the Warrants. The Prospectus Supplement
will also contain information, as applicable, about material United States
Federal income tax, accounting and other considerations relating to the
Securities in respect of which this Prospectus is being delivered.
The Senior Securities will rank equally with all other unsubordinated and
unsecured indebtedness of the Company. The Subordinated Securities will be
subordinated to all existing and future Senior Indebtedness (as defined herein)
of the Company. If so specified in the accompanying Prospectus Supplement, all
or a portion of any Debt Securities may be issued in permanent global form.
The Company's Common Stock is listed on The New York Stock Exchange, Inc.
(Symbol: "AHE") and its Psychiatric Group Preferred Stock is quoted on the
National Association of Securities Dealers Automated Quotations National Market
(Symbol: "AHEPZ"). Any Common Stock offered hereby or into which the other
Securities offered hereby are convertible will be listed, subject to notice of
issuance, on The New York Stock Exchange, Inc. See "Price Range of Common Stock
and Dividends."
The Company may sell Securities to or through underwriters, and also may
sell Securities directly to other purchasers or through agents. The accompanying
Prospectus Supplement sets forth the names of any underwriters or agents
involved in the sale of the Securities in respect of which this Prospectus is
being delivered, the principal amounts, if any, to be purchased by underwriters
and the compensation, if any, of such underwriters or agents. See "Plan of
Distribution" herein. This Prospectus may not be used to consummate sales of
Securities unless accompanied by a Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL
------------------------
The date of this Prospectus is , 1995
<PAGE> 4
No person is authorized to give any information or to make any
representations not contained or incorporated by reference in this Prospectus or
in the accompanying Prospectus Supplement, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or any underwriter, agent or dealer. This Prospectus and the
accompanying Prospectus Supplement do not constitute an offer to sell or a
solicitation of an offer to buy any securities other than the Securities in
respect of which this Prospectus and the accompanying Prospectus Supplement is
delivered or an offer of any securities in any jurisdiction to any person when
such an offer would be unlawful.
The delivery of this Prospectus together with a Prospectus Supplement
relating to particular Securities shall not constitute an offer in any
jurisdiction of any of the other Securities covered by this Prospectus.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 and at its Regional Offices located
at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511, and Seven World Trade Center, 13th Floor, New York, New York 10048.
Copies of such material can be obtained at prescribed notes from the Public
Reference Section of the Commission, 450 Fifth Street, N.W. Plaza, Washington,
D.C. 20549. Such reports and proxy statements can also be inspected at the
offices of The New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005 and at the offices of the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington, D.C. 20006. In addition, the Company
electronically files its reports, proxy statements and other information with
the Commission utilizing the Electronic Data Gathering, Analysis and Retrieval
("EDGAR") system, and copies of such material can be obtained electronically
through EDGAR and numerous commercial sources.
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the Securities offered hereby. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all the information set forth in the Registration Statement and
reference is hereby made to the Registration Statement and the exhibits thereto
for further information with respect to the Company and the Securities.
Statements contained in this Prospectus as to the contents of certain documents
are not necessarily complete, and, with respect to each such document filed as
an exhibit to the Registration Statement or otherwise filed with the Commission,
reference is made to the copy of the document so filed. Each statement is
qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
1. Annual Report on Form 10-K for the year ended December 31, 1994.
2. Quarterly Report on Form 10-Q for the quarterly period ended March 31,
1995.
3. Quarterly Report on Form 10-Q for the quarterly period ended June 30,
1995.
4. Current Report on Form 8-K, dated August 14, 1995.
5. All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of this Prospectus and prior to the termination of the offering of
the Securities shall be deemed to be incorporated herein by reference
and to be a part of this Prospectus from the date of filing of each such
document.
2
<PAGE> 5
Any statement contained herein or in a document all or a portion of which
is incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document that
also is or is deemed to be incorporated by reference herein or in the Prospectus
Supplement modifies or supersedes such statement. Any such statement so modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will furnish without charge to each person, including any
beneficial owner of Securities, to whom this Prospectus is delivered, upon the
request of such person, a copy of any of the documents incorporated by reference
herein, except for the exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Requests should be
directed to 6400 South Fiddler's Green Circle, Suite 1800, Englewood, Colorado
80111 (telephone (303) 796-9793), Attention: Secretary.
3
<PAGE> 6
The following information is qualified in its entirety by reference to the
more detailed information and financial statements, including the notes thereto,
incorporated herein by reference. Certain capitalized terms used herein are
defined in the Glossary.
THE COMPANY
American Health Properties, Inc. (together with its subsidiaries, the
"Company") is a self-administered real estate investment trust that commenced
operations in 1987. The Company has investments in health care facilities that
are operated by qualified third party health care providers, as well as a
medical office building.
As of June 30, 1995, the Company's core portfolio of investments (the "Core
Group") consists of 15 acute care hospitals, three physical rehabilitation
hospitals, two long-term care facilities, one Alzheimer's care facility and one
medical office building. At that date, the net book value of the Core Group's
assets was $544 million. Of the Core Group's real estate assets at that date,
90% in net book value represented the acute care segment, 6% represented the
rehabilitation segment, 2% represented the long-term care segment, including the
Alzheimer's care facility, and 2% represented the medical office building. As of
June 30, 1995, 95% in net book value of the Core Group's real estate assets were
held in fee and 5% were held as construction and/or mortgage financing.
The Core Group's facilities are diversified geographically across 12
states, are distributed among large and small population centers, and are
operated by ten experienced management companies. These operators include
Columbia/HCA Healthcare Corporation, Dynamic Health, Inc., Horizon/CMS
Healthcare Corporation (formerly Continental Medical Systems, Inc.), HealthSouth
Corporation, Paracelsus Healthcare Corporation, Quorum Health Group, Inc.,
Signature Health Care Corporation and Tenet Healthcare Corporation ("Tenet",
formerly American Medical International, Inc.). Facilities operated by Tenet
represented 55% of the Core Group's revenues for the six months ended June 30,
1995.
Approximately 83% of the Core Group's property revenues for the six months
ended June 30, 1995 were secured by corporate guarantees of these operating
companies or their subsidiaries. Also, as of June 30, 1995, letters of credit
from commercial banks and cash deposits aggregating $13 million were available
to the Core Group as security for lease financings. Leases for nine of the Core
Group's facilities, representing 80% of the Core Group's property revenues for
the six months ended June 30, 1995, contain cross-default provisions.
The Company's portfolio of psychiatric hospital investments (the
"Psychiatric Group") consists of three psychiatric hospitals owned by the
Company and two mortgage loans secured by psychiatric hospitals. As of June 30,
1995, the net book value of the Psychiatric Group assets was $64.9 million. Of
the Psychiatric Group's real estate assets at that date, 36% in net book value
were held in fee and 64% in net book value were held as mortgages.
The operators of the Company's facilities derive a substantial percentage
of their total revenues from federal and state health care programs such as
Medicare and Medicaid and from other third party payors such as private
insurance companies, self-insured employers and health maintenance
organizations. Such operators are also subject to extensive federal, state and
local government regulation relating to their operations, and the Company's
facilities are subject to periodic inspection by governmental and other
authorities to assure continued compliance with mandated procedures, licensure
requirements under state law and certification standards under the Medicare and
Medicaid programs. A change in reimbursement levels under the Medicare or
Medicaid programs, a reduction in reimbursement by other third party payors or
an operator's failure to maintain its certification under the Medicare or
Medicaid programs could adversely affect revenues to the Company's facilities.
The Company's principal executive office is located at 6400 South Fiddler's
Green Circle, Suite 1800, Englewood, Colorado 80111, and its telephone number at
such address is (303) 796-9793.
4
<PAGE> 7
RECENT DEVELOPMENTS
ADDITIONAL INVESTMENTS
In August 1995, the Company entered into an agreement to provide $5.6
million of financing for an 80-unit assisted living facility to be constructed
in Walla Walla, Washington. The Company is providing construction financing and
will purchase the facility upon completion and enter into a ten-year operating
lease. Construction of the facility will commence immediately and will take
approximately ten months. The facility will be leased to and operated by
Emeritus Corporation (formerly Assisted Living of America) of Seattle,
Washington.
Also in August 1995, the Company completed a $7.6 million purchase of two
long-term care facilities containing a total of 192 skilled nursing beds and 124
assisted living units, located in Safford and Douglas, Arizona. The Company has
leased the facilities to affiliates of Signature Health Care Corporation
("Signature") of Denver, Colorado. Signature operates 11 nursing homes in
Colorado and Arizona, including two facilities in Denver, Colorado that are
leased from the Company. All four long-term care facilities leased by Signature
from the Company contain cross-default provisions.
DISTRIBUTION OF PSYCHIATRIC GROUP STOCK
In July, 1995 the Company created a new series of preferred stock
designated as Psychiatric Group Preferred Stock ("Psychiatric Group Stock") and
made a distribution (the "Distribution") of one Depositary Share for every ten
shares of Common Stock held of record on July 14, 1995, each such Depositary
Share representing a one-tenth interest in one share of Psychiatric Group Stock.
The Securities offered through delivery of this Prospectus and the
accompanying Prospectus Supplement do not include Psychiatric Group Stock. The
Company does not intend to issue any further Psychiatric Group Stock except upon
exercise of options granted in connection with the initial issuance of
Psychiatric Group Stock.
By way of the issuance of the Psychiatric Group Stock, the Company sought
to separate the economic attributes of the Psychiatric Group and the Core Group
into two distinct portfolios, with two distinct classes of publicly traded
shares intended to represent those portfolios. The assets, liabilities and
expenses of the Company have been allocated between the two portfolios. In
addition to consolidated financial statements, the Company publishes separate
financial statements for each Group. Dividends and other payouts or
distributions with respect to the Common Stock and Psychiatric Group Stock are
expected to be a function of the individual financial performance of the Core
Group and the Psychiatric Group, respectively. See "Management and Accounting
Policies" and "Description of Common Stock and Psychiatric Group Stock."
Consolidated Capital Structure. The outstanding Common Stock and
Psychiatric Group Stock are part of the consolidated capital structure of the
Company. Notwithstanding the allocation of assets and liabilities (including
contingent liabilities), stockholders' equity and items of income, expense and
cash flow between the Core Group and the Psychiatric Group for purposes of
preparing their respective financial statements, the change in the capital
structure of the Company effected by the Psychiatric Group Stock issuance does
not affect the respective legal title to assets or responsibility for
liabilities of the Company or any of its subsidiaries. The issuance of
Psychiatric Group Stock does not affect the rights of creditors of the Company
or any subsidiary, including rights under financing covenants. Each holder of
the Company's Common Stock is a holder of an issue of capital stock of the
entire Company and is subject to risks associated with an investment in the
Company and all of its businesses, assets and liabilities. For example, if the
cash flow and proceeds of any sales of assets of the Psychiatric Group should be
insufficient to service inter-Group loans or other debt owed by the Psychiatric
Group, the Core Group would be adversely affected.
Financial effects arising from the Psychiatric Group that affect the
Company's consolidated results of operations, financial condition or borrowing
costs could adversely affect the results of operations, financial condition or
borrowing costs of the Core Group or the market price of the Common Stock. In
addition, net
5
<PAGE> 8
losses of the Psychiatric Group, as well as dividends and distributions on, and
repurchases of, Psychiatric Group Stock will reduce the funds of the Company
legally available for dividends on the Common Stock.
Potential Conflicts of Interest. The issuance of Psychiatric Group Stock
could give rise to occasions when the interests of the holders of Common Stock
and the holders of Psychiatric Group Stock might diverge or appear to diverge.
Examples include determinations by the Company's Board of Directors (the
"Board") and, in certain circumstances, the management of the Company to (i) pay
or omit the payment of dividends on Common Stock or Psychiatric Group Stock,
(ii) allocate consideration to be received in connection with a merger or
consolidation involving the Company among holders of Common Stock and
Psychiatric Group Stock, (iii) advance or repay inter-Group loans, (iv) redeem
Psychiatric Group Stock or exchange it for Common Stock, (v) approve
dispositions of assets of either of the Groups and (vi) make other operational
and financial decisions with respect to one Group that could be considered to be
detrimental to the other Group. When making decisions with regard to matters
that create potential conflicts of interest, the Board will act in accordance
with the terms of the Company's Certificate of Incorporation, management and
accounting policies as described in "Management and Accounting Policies" and its
fiduciary duties under Delaware law. The Company's management is responsible for
both the Core Group and the Psychiatric Group and consequently could make
management decisions with respect to one Group that could be considered
detrimental to the other.
Inter-Group Loans. If the Psychiatric Group is unable to repay any
inter-Group loans owed to the Core Group, the Core Group would be adversely
impacted. For this and other reasons, the Board has established policies
relating to the amount of inter-Group loans and required repayments thereof. See
"Management and Accounting Policies."
Stockholder Voting Rights. Subject to certain limited exceptions, eligible
holders of Common Stock, Psychiatric Group Stock and any other series of
Preferred Stock outstanding vote as one class on all matters coming before any
meeting of stockholders. Holders of Common Stock and Psychiatric Group Stock do
not have any right to vote on matters as a separate class (except pursuant to
certain limited class voting rights provided under Delaware law and, in limited
circumstances, in connection with a merger or consolidation of the Company with
or into another company). Similarly, separate meetings for the holders of Common
Stock or Psychiatric Group Stock are not held.
Certain matters as to which the holders of Common Stock and Psychiatric
Group Stock are entitled to vote may involve a divergence or the appearance of a
divergence of the interests of holders of Common Stock and Psychiatric Group
Stock. See "-- Potential Conflicts of Interest" and "Description of Common Stock
and Psychiatric Group Stock -- Voting Rights."
Management and Accounting Policies Subject to Change. The Board has
adopted certain management and accounting policies described herein with respect
to inter-Group loans, cash management, corporate expenses, allocation of assets
and liabilities (including contingent liabilities) and inter-Group transactions,
any and all of which could be modified or rescinded in the sole discretion of
the Board without the approval of stockholders, although there is no present
intention to do so. The Board could also adopt additional policies depending
upon the circumstances. Any determination by the Board to modify or rescind such
policies, or to adopt additional policies, including any such decision that
could have disparate effects upon holders of Common Stock and Psychiatric Group
Stock, will be made by the Board in good faith and in the honest belief that
such decision is in the best interests of the Company's stockholders, including
holders of Common Stock and Psychiatric Group Stock. In addition, generally
accepted accounting principles would require that changes in accounting
principles must be preferable (in accordance with generally accepted accounting
principles) to the principles previously in place. See "Management and
Accounting Policies."
Financial Covenants. Financial covenants in the Company's various debt
agreements require the Company to maintain on a consolidated basis certain
financial ratios, including (i) a minimum tangible net worth of $260 million
plus 75% of certain equity proceeds and (ii) a fixed charge coverage ratio (the
"Coverage Ratio") of at least 1.85 to 1. For the purposes of such debt
agreements, the Coverage Ratio is defined as the ratio of (a) net income before
income taxes, less cash tax expense, extraordinary income and gains from asset
dispositions, plus depreciation and amortization, interest expense,
extraordinary losses and
6
<PAGE> 9
losses from asset dispositions, to (b) interest expense and scheduled payments
of debt. Such debt agreements also limit the amount of outstanding indebtedness,
and certain other financings, including the issuance of Preferred Stock, of the
Company, and require that specified ratios of liabilities to tangible net worth
and asset values be maintained on a consolidated basis. Such debt covenants
further limit the payment of dividends and other distributions to stockholders,
including making funds available to stockholders through the purchase,
redemption or retirement of capital stock. This restriction on dividends and
other distributions applies to both the Common Stock and the Psychiatric Group
Stock and, in general, limits such payments to 95% of consolidated cash flow
available for debt service, less interest expense, plus gains on asset
dispositions and plus certain proceeds ("PG Excess Proceeds") from the
disposition of Psychiatric Group assets after the repayment of Psychiatric Group
indebtedness. Dividends or other distributions paid out of PG Excess Proceeds
are available only for the Psychiatric Group Stock and are limited to $30
million in the aggregate and $15 million in any calendar year. These covenants
in various debt agreements may limit the financial flexibility of the Company as
well as its ability to pay dividends, or otherwise make funds available to
stockholders (for example through redemptions or repurchases of stock), in the
future. However, dividends or other distributions that are payable in the form
of stock are generally not restricted. In addition, if the Company borrows
additional funds in the future, or refinances existing debt obligations, it is
expected that the Company will agree to financial covenants that could be more
or less restrictive than those referred to above. For additional information on
the Company's debt and the provisions of its debt agreements, see the notes to
the Company's consolidated financial statements, as well as the corresponding
notes to the financial statements of the Core Group and the Psychiatric Group,
incorporated herein by reference.
7
<PAGE> 10
MANAGEMENT AND ACCOUNTING POLICIES
The Company prepares financial statements in accordance with generally
accepted accounting principles, consistently applied, for both of the Groups,
and these financial statements, taken together, comprise all of the accounts
included in the corresponding consolidated financial statements of the Company.
The financial statements of each Group principally reflect the investments
included therein. Such Group financial statements also include allocated
portions of the Company's corporate assets, liabilities (including contingent
liabilities), stockholders' equity and items of income, expense and cash flow
that are not separately identified with the operations of the other Group.
Notwithstanding such allocations for the purpose of preparing Group financial
statements, each holder of Common Stock or Psychiatric Group Stock is a holder
of an issue of capital stock of the entire Company and is subject to risks
associated with an investment in the entire Company and all of its businesses,
assets and liabilities. See "Recent Developments -- Distribution of Psychiatric
Group Stock -- Consolidated Capital Structure."
Cash management and allocation of principal corporate activities between
the Psychiatric Group and the Core Group are based upon methods that management
believes to be reasonable and are reflected in their respective Group financial
statements. The following is a summary of certain policies adopted by the Board
and relating to these matters, as in effect as of the date of this Prospectus.
(i) Cash needs of the Psychiatric Group in excess of cash held by the
Psychiatric Group may, at the option of the Board, be funded by advances
from the Core Group to the Psychiatric Group constituting additional
revolving inter-Group loans, but the aggregate revolving inter-Group loans
owed by the Psychiatric Group to the Core Group are limited to a maximum of
$8,750,000 at any one time outstanding, subject to reduction of such limit
commensurate with any permanent repayment in the future of working capital
loans extended to certain psychiatric hospital operators, but in no event
will such limit be reduced below $5,000,000.
(ii) Except as permitted by (i) above, no additional fixed rate or
other inter-Group loans will be advanced by the Core Group to the
Psychiatric Group.
(iii) All third party debt incurred by the Company and its
subsidiaries is specifically attributed to and reflected on the financial
statements of the Core Group except for debt that is non-recourse to the
assets of the Core Group.
(iv) All Common Stock and any other class or series of stock of the
Company other than the Psychiatric Group Stock, as well as the net proceeds
of any future issuances thereof, are specifically attributed to and
reflected on the financial statements of the Core Group.
(v) If the Psychiatric Group sells any assets out of the ordinary
course ("Psychiatric Group Asset Sales"), the Net Proceeds from Psychiatric
Group Asset Sales will be applied, first, to repay revolving inter-Group
loans owed by the Psychiatric Group to the Core Group to the extent of the
psychiatric hospital operator working capital loans associated with the
asset or assets sold, second, to repay fixed rate inter-Group loans owed by
the Psychiatric Group to the Core Group (until repaid in full), and third,
to repay other revolving inter-Group loans owed by the Psychiatric Group to
the Core Group (until repaid in full), before any remaining Net Proceeds
from Psychiatric Group Asset Sales may be used to make distributions to
holders of Psychiatric Group Stock as described under "Price Range of
Common Stock and Dividends."
(vi) Excess cash held by the Psychiatric Group (other than Net
Proceeds from Psychiatric Group Asset Sales, which is treated as described
in (v) above) is applied to reduce revolving inter-Group loans owed by the
Psychiatric Group to the Core Group (until repaid in full), subject to the
ability of the Psychiatric Group, at the option of the Board, to re-borrow
cash from the Core Group up to the limitations described in (i) above to
cover future cash needs of the Psychiatric Group (including, without
limitation, to fund dividends in a manner consistent with the dividend
policy then applicable to the Psychiatric Group Stock).
8
<PAGE> 11
(vii) Fixed rate inter-Group loans owed by the Psychiatric Group to
the Core Group (a) bear interest at a fixed rate of approximately 13% per
annum (which is equal to the weighted average interest rate on the
Company's fixed rate senior debt at December 31, 1994, plus 2%) and (b) are
prepayable without premium at any time, at the option of the Board. The
higher interest rate charged to the Psychiatric Group reflects management's
belief that the consolidated Company is a stronger credit than the
Psychiatric Group on a stand alone basis.
(viii) Revolving inter-Group loans owed by the Psychiatric Group to
the Core Group (a) bear interest at a floating rate equal from time to time
to the prevailing prime rate (as determined by the Board, whose
determination shall be conclusive) plus 2% and (b) are prepayable without
premium at any time, at the option of the Board. The higher interest rate
charged to the Psychiatric Group reflects management's belief that the
consolidated Company is a stronger credit than the Psychiatric Group on a
stand alone basis.
(ix) Cash held by the Psychiatric Group in excess of inter-Group loans
owed by the Psychiatric Group required to be repaid as set forth in (v) and
(vi) above may, at the option of the Board, be advanced to the Core Group
as revolving inter-Group loans (to the extent such cash can be beneficially
put to use by the Core Group) or otherwise invested on behalf of the
Psychiatric Group.
(x) Revolving inter-Group loans owed by the Core Group to the
Psychiatric Group (a) bear interest at a floating rate equal from time to
time to the weighted average interest rate borne by the Company's revolving
debt (or, for periods in which there is no such revolving debt outstanding,
the interest rate at which the Company could borrow on a revolving basis,
as determined by the Board, whose determination shall be conclusive) and
(b) are prepayable without premium at any time, at the option of the Board.
The interest rate charged to the Core Group reflects management's belief
that the consolidated Company and the Core Group, on a stand alone basis,
are comparable credits.
(xi) As a result of the foregoing, the balance sheet of the Core Group
reflects its net revolving and net fixed rate inter-Group loans to or
borrowings from the Psychiatric Group, and the balance sheet of the
Psychiatric Group reflects its net revolving and net fixed rate inter-Group
loans to or borrowings from the Core Group. Similarly, the respective
income statements of the Core Group and the Psychiatric Group reflect
interest income or expense, as the case may be, associated with such loans
or borrowings and the respective statements of cash flows of the Core Group
and the Psychiatric Group reflect changes in the amounts thereof deemed
outstanding.
(xii) Corporate, general and administrative costs that cannot be
directly allocated to either Group are allocated between the Core Group and
the Psychiatric Group on the basis of their respective contributions to
revenue, provided that at no time will such expenses allocated to either
Group be less than $250,000 per annum.
Nothing in the foregoing policies obligates the Board to cause the Core
Group to provide funds to the Psychiatric Group if the Board determines it is in
the best interests of the Company not to do so. The foregoing policies may be
modified or rescinded in the sole discretion of the Board without the approval
of stockholders, although there is no present intention to do so. The Board
could also adopt additional policies depending upon the circumstances. Any
determination by the Board to modify or rescind such policies, or to adopt
additional policies, including any such decision that could have disparate
effects upon holders of Common Stock and Psychiatric Group Stock, would be made
by the Board in the good faith belief that such decision is in the best
interests of the Company and its stockholders, including the holders of Common
Stock and Psychiatric Group Stock. In addition, generally accepted accounting
principles would require that changes in accounting principles must be
preferable (in accordance with generally accepted accounting principles) to the
principles previously in place.
9
<PAGE> 12
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Company's Common Stock is listed on The New York Stock Exchange, Inc.
(the "NYSE") under the symbol "AHE." The following table sets forth, for the
periods shown, the range of high and low sales prices of the Common Stock on the
NYSE and the cash dividends declared on the Common Stock.
<TABLE>
<CAPTION>
DIVIDENDS
HIGH LOW DECLARED
--- --- ------
<S> <C> <C> <C>
1993
First quarter....................................... $25 5/8 $18 7/8 $.5550
Second quarter...................................... 26 3/4 23 .5600
Third quarter....................................... 28 3/4 24 3/8 .5650
Fourth quarter...................................... 29 24 1/2 .5700
1994
First quarter....................................... $27 1/4 $24 5/8 $.5750
Second quarter...................................... 27 24 .5750
Third quarter....................................... 24 5/8 22 .5750
Fourth quarter...................................... 23 3/8 18 1/2 .5750
1995
First quarter....................................... $22 1/8 $19 3/8 $.5750
Second quarter (1).................................. 22 1/8 19 5/8 .4950
Third quarter (through August 16, 1995) (2)......... 23 1/4 20 1/4
</TABLE>
---------------
(1) On July 25, 1995, the Company made a distribution of one Depositary Share
for every ten shares of Common Stock held of record on July 14, 1995, each
such Depositary Share representing a one-tenth interest in one share of
Psychiatric Group Stock. On July 11, 1995, the Company declared dividends
totalling $.5750 for the second quarter of 1995, comprised of a dividend of
$.4950 to be paid on the Common Stock and a dividend of $.08 to be paid on
each one-hundredth of a share of Psychiatric Group Stock, which is
equivalent to $.80 per Depositary Share.
(2) The high and low sales prices of the Common Stock for the periods subsequent
to July 25, 1995 reflect the value of the Common Stock after the
Distribution.
If shares of Common Stock, or Securities convertible or exercisable for
Common Stock, are being offered, a recent last sale price of the Common Stock
will be set forth on the cover page of the accompanying Prospectus Supplement.
The Company expects to declare quarterly dividends on the Common Stock and
the Psychiatric Group Stock in the future based primarily upon the Funds From
Operations attributable to the Core Group and the Psychiatric Group,
respectively. Specifically, the Company expects to maintain the Common Stock
dividend payout ratio at less than 90% of annual Funds From Operations
attributable to the Core Group and the Psychiatric Group Stock dividend payout
ratio (excluding distributions out of asset sale proceeds) at less than 95% of
annual Funds From Operations attributable to the Psychiatric Group.
In addition, the Company expects to use the Net Proceeds from Psychiatric
Group Asset Sales initially to repay then outstanding inter-Group loans or other
debt owed by the Psychiatric Group and then to distribute all remaining net
proceeds, if any, to holders of Psychiatric Group Stock by dividend, tender
offer, open market or privately negotiated repurchases or otherwise (in cash, or
in Common Stock valued at a ten Trading Day average Market Value prior to the
time of the distribution).
The payment of dividends on the Common Stock and Psychiatric Group Stock
will also be dependent in part upon the financial condition of the Company as a
whole.
The Company expects the aggregate annual dividends paid on the Common Stock
and the Psychiatric Group Stock to be at least sufficient to cause the Company
to maintain its status as a REIT. In order to permit the Company to qualify as a
REIT, the Company must distribute to stockholders at least 95% of its
10
<PAGE> 13
annual REIT taxable income (which essentially is its net ordinary income,
excluding capital gains). Generally, as a result of non-cash items, primarily
depreciation, cash dividends have exceeded and may continue to exceed the
Company's REIT taxable income and to that extent represent a return of capital.
Dividends on the Common Stock and Psychiatric Group Stock will be limited
to the Available Dividend Amount attributable to the Core Group and the
Psychiatric Group, respectively. The Available Dividend Amount is similar to the
amount that would be legally available under Delaware law for the payment of
dividends by the Core Group or the Psychiatric Group, as the case may be, if
such Group were a separate Delaware corporation. There can be no assurance that
there will be an Available Dividend Amount with respect to either Group. As of
June 30, 1995, the Available Dividend Amount attributable to the Core Group and
the Psychiatric Group as of that date was at least $254.7 million and $48.0
million, respectively. All dividends on Common Stock will be deemed to be out of
the Core Group's funds and all dividends on Psychiatric Group Stock will be
deemed to be out of the Psychiatric Group's funds.
Dividends on the Common Stock and the Psychiatric Group Stock will be
further limited to the amount of funds of the Company legally available under
Delaware law for the payment of dividends by the Company on its capital stock.
As of June 30, 1995, the funds of the Company legally available for the payment
of dividends would have been at least $302.7 million. Payments of dividends on
either the Common Stock or the Psychiatric Group Stock will decrease the amount
of funds legally available for the payment of dividends on both the Common Stock
and the Psychiatric Group Stock.
USE OF PROCEEDS
Except as otherwise described in the accompanying Prospectus Supplement,
the net proceeds from the sale of Securities will be used for general corporate
purposes, which may include working capital, acquisitions, investments,
refinancings of indebtedness, capital expenditures, and repurchases and
redemptions of securities.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of
the Company for the periods indicated. For purposes of calculating such ratio,
"earnings" includes income before income taxes and fixed charges. "Fixed
charges" consists of interest on all indebtedness and that portion of rental
expense that management believes to be representative of interest. The Company
did not have any Preferred Stock outstanding for any period presented.
Accordingly, the ratio of earnings to combined fixed charges and preferred stock
dividends is identical to the ratio of earnings to fixed charges for the periods
presented. Because dividends payable on the Psychiatric Group Stock are not
fixed, dividends paid on the Psychiatric Group Stock will not be included in any
future presentations of the ratio of earnings to combined fixed charges and
preferred stock dividends.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED -------------------------------------------
JUNE 30, 1995 1994 1993 1992 1991 1990
---------------- ------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Consolidated ratio of earnings to
fixed charges (unaudited)......... 2.39 1.33(a) 2.81 (b) 2.09 2.31
</TABLE>
---------------
(a) Decrease in ratio was primarily due to a $30 million write-down of
Psychiatric Group real estate investments.
(b) Earnings did not cover fixed charges by $7.2 million primarily due to a $45
million write-down of Psychiatric Group real estate investments.
The Coverage Ratios as defined in the Company's debt agreements for the six
months ended June 30, 1995 and the years ended 1994, 1993, 1992, 1991 and 1990
were 2.96, 3.09, 2.58, 2.29, 2.48 and 2.73, respectively. See "Recent
Developments -- Distribution of Psychiatric Group Stock -- Financial Covenants."
11
<PAGE> 14
DESCRIPTION OF COMMON STOCK AND PSYCHIATRIC GROUP STOCK
The following description is intended as a summary of the principal
provisions of, and is qualified in all respects by reference to, (a) the
Company's Certificate of Incorporation and Bylaws previously filed with the
Securities and Exchange Commission and (b) the Certificate of Designations
specifying the terms of the Psychiatric Group Stock, filed as Exhibit 4.1 to the
Current Report on Form 8-K, dated August 14, 1995, incorporated by reference
herein.
GENERAL
The Certificate of Incorporation of the Company provides that the Company
is authorized to issue 100,000,000 shares of Common Stock, par value $0.01 per
share, and 1,000,000 shares of Preferred Stock, par value $0.01 per share,
issuable in series by the Board. As of July 31, 1995, the Company had issued and
outstanding 20,865,539 shares of Common Stock. As of July 31, 1995, the Company
had outstanding approximately 209,000 shares of Psychiatric Group Stock, which
constitute a separate series of Preferred Stock, issued and outstanding. Such
shares are the only shares of Psychiatric Group Stock authorized by the Board to
be issued, except shares of Psychiatric Group Stock issuable upon exercise of
options granted in connection with the Distribution. In addition, the Company
has authorized the issuance of approximately 232,000 Series A Preferred Shares.
See " -- Preferred Stock Purchase Rights Plan."
The authorized but unissued shares of Common Stock of the Company will be
available for issuance from time to time by the Company at the sole discretion
of the Board for any proper corporate purpose, which could include raising
capital, providing compensation or benefits to employees, paying stock dividends
or acquiring companies or businesses. Under applicable Delaware law, such future
issuances of Common Stock would not require further approval of stockholders,
and the Company would not seek approval of stockholders unless such approval
would be required by stock exchange regulations, would be in conjunction with a
further amendment to the Certificate of Incorporation or would otherwise be
deemed advisable by the Board.
Each holder of Common Stock will be a holder of an issue of capital stock
of the entire Company and will be subject to the risks associated with an
investment in the Company and all of its businesses, assets and liabilities. For
example, if the cash flow and proceeds of any sales of assets of the Psychiatric
Group should be insufficient to service inter-Group loans or other debt owed by
the Psychiatric Group, the Core Group would be adversely affected.
The Common Stock trades on The New York Stock Exchange, Inc. under the
symbol "AHE" and the Psychiatric Group Stock is quoted on the National
Association of Securities Dealers Automated Quotations National Market under the
symbol "AHEPZ."
DIVIDENDS
Subject to the rights, if any, of holders of any other Preferred Stock
dividends may be paid on the Common Stock and/or the Psychiatric Group Stock in
equal or unequal amounts, when, as and if declared by the Board. Dividends on
the Common Stock and Psychiatric Group Stock will be limited to the Available
Dividend Amount attributable to the Core Group and the Psychiatric Group,
respectively. As of June 30, 1995, the Available Dividend Amount attributable to
the Core Group and the Psychiatric Group as of that date was at least $254.7
million and $48.0 million, respectively. The Available Dividend Amount is
similar to the amount that would be legally available under Delaware law for the
payment of dividends by the Core Group or Psychiatric Group, as the case may be,
if such Group were a separate Delaware corporation. There can be no assurance
that there will be an Available Dividend Amount with respect to either Group.
Dividends on the Common Stock and the Psychiatric Group Stock will be
further limited to the amount of funds of the Company legally available under
Delaware law for the payment of dividends by the Company on its capital stock.
As of June 30, 1995, the funds of the Company legally available for the payment
of dividends would have been at least $302.7 million. Payments of dividends on
either the Common Stock or the Psychiatric Group Stock will decrease the amount
of funds legally available for the payment of dividends on both the Common Stock
and the Psychiatric Group Stock.
See "Recent Developments -- Distribution of Psychiatric Group
Stock -- Financial Covenants."
12
<PAGE> 15
EXCHANGE AND REDEMPTION
Common Stock. The Certificate of Incorporation does not provide for either
mandatory or optional conversion, exchange or redemption rights relating to
outstanding shares of Common Stock.
Psychiatric Group Stock. The Company may, at any time commencing one year
after the date of the Distribution and in its sole discretion, redeem all
outstanding shares of Psychiatric Group Stock for cash in an amount, or in
exchange for newly issued shares of Common Stock having an aggregate value
(based on the average Market Value for the ten consecutive Trading Days ending
on the last Trading Day prior to the date on which notice of such exchange is
mailed to holders of Psychiatric Group Stock), equal to 115% of the average
Market Value during such ten Trading Day period of the shares of Psychiatric
Group Stock being redeemed; provided, however, that in connection with the sale
of all or substantially all of the assets of the Psychiatric Group the Company
may at any time after the date of the Distribution redeem all outstanding shares
of Psychiatric Group Stock for cash or in exchange for newly issued shares of
Common Stock having an aggregate value (based on the average Market Value for
the ten consecutive Trading Days ending on the last Trading Day prior to the
date on which notice of such exchange is mailed to holders of Psychiatric Group
Stock), equal to 105% of the average Market Value during such ten Trading Day
period of the shares of Psychiatric Group Stock being redeemed.
If at any time commencing one year after the date of the Distribution, the
Fair Market Value of the assets (other than cash, deposits and readily
marketable securities) of the Psychiatric Group (as determined by the Board,
whose determination shall be conclusive) is less than $10,000,000, the Company
may, in its sole discretion, redeem all outstanding shares of Psychiatric Group
Stock for cash in an amount, or in exchange for newly issued shares of Common
Stock having an aggregate value (based on the average Market Value for the ten
consecutive Trading Days ending on the last Trading Day prior to the date on
which notice of such exchange is mailed to holders of Psychiatric Group Stock),
equal to 105% of the Net Fair Market Value of the Psychiatric Group (as
determined by the Board, whose determination shall be conclusive).
VOTING RIGHTS
Holders of Common Stock are entitled to one vote per share and vote as one
class with the holders of Psychiatric Group Stock (together with any other
series of Preferred Stock outstanding at the time of such vote and so entitled
to vote) on all matters submitted to stockholders, other than matters which
would be required by law or the Company's Certificate of Incorporation to be
submitted to a separate class vote.
Holders of Psychiatric Group Stock are entitled to a variable number of
votes per share equal to the ratio (calculated to the nearest three decimal
places) of the average Market Value of one share of Psychiatric Group Stock to
one share of Common Stock for the ten consecutive Trading Days ending on the
last Trading Day prior to the applicable record date, and could have more than,
less than or exactly one vote per share. This formula is intended to equate the
proportionate voting rights of the Common Stock and Psychiatric Group Stock to
their respective Market Values at the time of any vote. Holders of Psychiatric
Group Stock vote as one class with holders of Common Stock (together with any
other series of Preferred Stock outstanding at the time of such vote and so
entitled to vote) on all matters submitted to stockholders, other than matters
which would be required by law or the Company's Certificate of Incorporation to
be submitted to a separate class vote. Each holder of Depositary Shares
representing interests in Psychiatric Group Stock is, through the depositary
share arrangements relating thereto, entitled to a number of votes per
Depositary Share equal to one-tenth the number of votes to which a holder of one
share of Psychiatric Group Stock is entitled.
No class vote of holders of Psychiatric Group Stock is required upon a
merger or consolidation if (a) the Psychiatric Group Stock remains outstanding
and unchanged as a result of the merger or consolidation, (b) the type and
amount of consideration for such merger or consolidation is divided between
holders of Psychiatric Group Stock and holders of Common Stock in a manner
determined to be fair by the Board (whose determination shall be conclusive) or
(c) the Psychiatric Group Stock is converted into capital stock of the surviving
company to the merger or consolidation having terms substantially similar to the
terms of the Psychiatric Group Stock. A class vote of the holders of a majority
of the outstanding shares of Psychiatric Group Stock is required for any other
merger or consolidation.
13
<PAGE> 16
Provisions of the Company's Certificate of Incorporation require that any
action permitted or required to be taken by the stockholders must be effected at
a duly called annual or special meeting; stockholders cannot take any action by
written consent of the stockholders. Special meetings of the stockholders may be
called only by a majority of the Board, by the Chairman of the Board or by the
President and may not be called by the stockholders.
Neither the holders of Common Stock nor the holders of Psychiatric Group
Stock have any cumulative voting rights or any preemptive rights to subscribe
for or purchase additional shares of capital stock or any other obligations
convertible into or exercisable for shares of capital stock that may hereafter
be issued by the Company.
LIQUIDATION
In the event of any voluntary or involuntary liquidation, dissolution or
winding-up of the Company, holders of Common Stock and Psychiatric Group Stock
are entitled to receive their respective proportionate interests in the net
assets of the Company, if any, remaining for distribution to holders of stock
(after payment or provision for all liabilities, including contingent
liabilities, of the Company and payment of the liquidation preference payable to
holders of any other series of Preferred Stock ranking senior to the Psychiatric
Group Stock as to distributions upon liquidation) pro rata based upon the
average Market Value of the Common Stock as compared to the average Market Value
of the Psychiatric Group Stock, in each case for the ten consecutive Trading
Days ending on the Trading Day prior to the date of the first public
announcement of (i) a voluntary liquidation, dissolution or winding-up of the
Company or (ii) the institution of any proceeding for the involuntary
liquidation, dissolution or winding-up of the Company; provided that if the
foregoing would result in a liquidation payment valued at less than $1.00 per
share of the Psychiatric Group Stock, the holders of Psychiatric Group Stock are
not entitled to a proportionate interest in such net assets but instead are
entitled to receive a liquidation preference of $1.00 per share (and no more)
before any payment may be made to holders of Common Stock.
Neither the merger nor consolidation of the Company into or with any other
corporation, nor the merger or consolidation of any other corporation into or
with the Company, nor a sale, transfer or lease of all or any part of the assets
of the Company, would be deemed a liquidation, dissolution or winding-up for
these purposes.
DETERMINATIONS BY THE BOARD
The Company's Certificate of Incorporation provides that a Director will
not be liable to the Company or its stockholders for monetary damages for breach
of fiduciary duty as a Director, except for liability (i) for any breach of the
Director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or
knowing violation of law, (iii) pursuant to specific provisions of Delaware law
or (iv) for any transaction from which the Director derived any improper
personal benefit. The liability of Directors will be further eliminated or
limited to the fullest extent permitted by future changes in Delaware law. In
addition, the Certificate of Designations relating to the Psychiatric Group
Stock provides that any determinations made in good faith by the Board under
such Certificate of Designations, and any determinations with respect to either
Group or the rights of holders of shares of Common Stock or Psychiatric Group
Stock made pursuant to or in furtherance of such Certificate of Designations,
will be final and binding on all stockholders of the Company, subject to the
rights of stockholders under Delaware law and under the federal securities laws.
PREFERRED STOCK PURCHASE RIGHTS PLAN
On April 20, 1990, the Company distributed to its holders of Common Stock
one preferred stock purchase right (each, a "Right") for each outstanding share
of Common Stock. Under certain conditions, each Right may be exercised to
purchase one one-hundredth of a share of preferred stock, Series A, par value
$.01 per share (the "Series A Preferred Shares"), of the Company at a price of
$45. The total number of Rights currently issued or issuable, including Rights
issuable in connection with Common Stock which may be
14
<PAGE> 17
issued under the Company's stock incentive plans and upon the conversion of the
Company's outstanding Swiss franc convertible bonds, is approximately
23,200,000. Approximately 232,000 Series A Preferred Shares could be purchased
upon the exercise of all Rights currently issued or issuable. The number of
Rights outstanding and Series A Preferred Shares issuable upon exercise, as well
as the Series A Preferred Share purchase price, are subject to customary
antidilution adjustments.
The Rights are evidenced by the certificates for shares of Common Stock,
and in general are not transferable apart from the Common Stock or exercisable
until after a party has acquired beneficial ownership of or made a tender offer
for 10% or more of the outstanding Common Stock of the Company (an "Acquiring
Person"), or the occurrence of other events as specified in the Rights Plan.
Under certain conditions as specified in the Rights Plan, including but not
limited to the acquisition by a party of 15% or more of the outstanding Common
Stock of the Company or the acquisition of the Company in a merger or other
business combination, each holder of a Right (other than an Acquiring Person,
whose Rights will be void) will receive upon exercise thereof and payment of the
exercise price that number of shares of Common Stock of the Company or of the
other party, as applicable, having a market value of two times the exercise
price of the Right.
The Rights expire on April 20, 2000, and until exercised, the holder
thereof, as such, will have no rights as a shareholder of the Company. At the
Company's option, the Rights may be redeemed in whole at a price of $.01 per
Right at any time prior to becoming exercisable. In general, the Company may
also exchange the Rights at a ratio of one share of Common Stock per Right after
becoming exercisable but prior to the acquisition of 50% or more of the
outstanding shares of Common Stock by any party.
Series A Preferred Shares issuable upon exercise of the Rights will not be
redeemable. Each Series A Preferred Share will have 100 votes and will be
entitled to (a) dividends in an amount equal to the greater of $1.00 or 100
times the amount of the dividends per share paid on the Common Stock, (b) a
liquidation preference in an amount equal to the greater of $100 or 100 times
the amount per share paid on the Common Stock and (c) a payment in connection
with a business combination (in which shares of Common Stock are exchanged)
equal to 100 times the amount per share paid on the Common Stock.
The Psychiatric Group Stock will not include, or entitle the holders
thereof to receive, the Rights, which will be applicable only to the Common
Stock.
LIMITS ON STOCK OWNERSHIP
The Company's Certificate of Incorporation provides that as a condition to
the transfer and/or registration of transfer of any shares of capital stock of
the Company which would result in any stockholder owning, directly or
indirectly, shares in excess of 9% of the issued and outstanding capital stock
of the Company, the proposed transferee must file with the Company an affidavit
setting forth the number of shares owned, directly or indirectly, by such
transferee. Any acquisition of shares, transfer of shares or any options,
warrants or other securities convertible into shares that would result in the
disqualification of the Company as a REIT will be deemed void to the fullest
extent permitted under applicable law and the intended transferee shall be
deemed never to have had an interest therein. If more than 9.8% of the capital
stock of the Company has become concentrated in the hands of one beneficial
owner, (i) such beneficial owner and its affiliates and associates will be
deemed to have offered to sell to the Company or its designee on the date
specified in the Company's notice of acceptance of such offer to sell such
number of shares sufficient, in the opinion of the Board, to maintain or bring
the direct or indirect ownership of the capital stock of the Company held by
such beneficial owner to a level of no more than 9.8% of the issued and
outstanding capital stock of the Company, and (ii) the Board also will refuse to
transfer or issue shares of capital stock to any person whose acquisition of
such shares would result in the direct or indirect ownership by that person of
more than 9.8% of the issued and outstanding capital stock of the Company. The
purchase price for any shares of capital stock of the Company so redeemed will
be equal to the fair market value of the shares reflected in the closing sales
price for the shares, if then listed on a national securities exchange, or the
average of the closing sales prices for the shares if then listed on more than
one national securities exchange, or if the shares are not then listed on a
national securities exchange, the latest bid quotation for the shares if then
traded over-the-counter, on the last business
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day immediately preceding the day on which notice of acceptance of the offer of
sale is sent by the Company, or, if no such closing sales prices or quotations
are available, then the purchase price will be equal to the net asset value of
such shares as determined in good faith by the Board. The purchase price of any
such shares acquired by the Company, or its designee, will be paid, at the
option of the Company, in cash or in the form of an unsecured, subordinated
promissory note of the Company, or its designee, bearing interest and having a
term to maturity (to be not less than 5 nor more than 20 years) as determined by
the Board. From and after the tender by the Company of the purchase price
therefor, the holder of any shares of capital stock of the Company so called for
purchase will cease to be entitled to any rights as a holder of such shares,
except the right to payment of the purchase price therefor.
BUSINESS COMBINATION PROVISIONS
The Certificate of Incorporation requires that Business Combinations (as
defined in the Certificate of Incorporation) between the Company and a
Beneficial Owner (as defined in the Certificate of Incorporation) of 10% or more
of the Company's outstanding shares of Voting Stock (as defined in the
Certificate of Incorporation) (a "Related Person"), and any Affiliate (as
defined in the Certificate of Incorporation) or Associate (as defined in the
Certificate of Incorporation) of such person, be approved by (i) the affirmative
vote of the holders of not less than 80% of the outstanding shares of Voting
Stock and (ii) the holders of a majority of the outstanding shares of Voting
Stock other than such Related Person and such person's Associates and
Affiliates, unless a majority of the Continuing Directors (as defined in the
Certificate of Incorporation) shall have approved the Business Combination or
shall have approved the acquisition of outstanding shares of Voting Stock which
caused the Related Person to become a Related Person. In general, Voting Stock
means the capital stock of the Company entitled to vote generally in the
election of directors, including the Psychiatric Group Stock, and each share is
allocated for this purpose the number of votes granted to it generally in the
election of directors.
A "Business Combination" is defined in the Certificate of Incorporation as
(a) any merger or consolidation of the Company or any subsidiary (other than
pursuant to Section 253 of the Delaware General Corporation Law with or into any
corporation which owns at least 90% of the outstanding shares of each class of
stock of the Company or its subsidiary, as applicable) with a Related Person or
any other corporation (whether or not itself a Related Person) which is, or
after such merger or consolidation would be, an Affiliate or Associate of a
Related Person, (b) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) to or with a
Related Person or such person's Affiliates or Associates of any assets of the
Company (including the securities of a subsidiary) or a subsidiary having a fair
market value of $20 million or more, (c) the issuance or transfer of any
securities of the Company or a subsidiary by the Company or such subsidiary to
any Related Person having an aggregate fair market value of $20 million or more,
other than by any distribution pro rata to, or exchange offer made to, all
holders of a publicly held class or series of stock of the Company or any of its
subsidiaries, or upon the exercise, conversion or exchange of securities of the
Company or any of its subsidiaries which are exercisable, convertible or
exchangeable into or for securities of the Company or any of its subsidiaries,
(d) the adoption of any plan or proposal for the liquidation or dissolution of
the Company by or on behalf of a Related Person or any of such person's
Affiliates or Associates or (e) any reclassification of securities or
recapitalization of the Company (including any reverse stock split), or any
merger or consolidation of the Company with any of its subsidiaries or any other
transaction involving the Company or any of its subsidiaries (whether or not
with or into or otherwise involving a Related Person) which has the effect,
directly or indirectly, of increasing the proportionate share of the outstanding
shares of any class of voting stock of the Company or of any of its subsidiaries
directly or indirectly owned by any Related Person or such person's Associates
or Affiliates.
The Company is also subject to the provisions of Section 203 of the
Delaware General Corporation Law, which relate to business combinations.
STAGGERED BOARD; REMOVAL OF DIRECTORS
The Board is divided into three classes, each class consisting, as nearly
as may be possible, of one-third of the total number of Directors. Directors are
elected for a three-year term and the term of one class expires
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each year. A Director holds office until the annual meeting for the year in
which his or her term expires. If the number of Directors is changed, any
increase or decrease shall be apportioned among the classes so as to maintain
the number of Directors in each class as nearly equal as possible, but in no
case will a decrease in the number of Directors shorten the term of any
incumbent Director. Under Delaware law, because the Board is divided into
classes, no Director may be removed from office before expiration of his or her
term except for cause.
VOTE REQUIRED TO CHANGE CERTAIN PROVISIONS
The provisions described under "Limits on Stock Ownership" and "Business
Combination Provisions" above may not be amended without the affirmative vote of
stockholders holding at least 80% of the Voting Stock of the Company and, with
respect to the provisions under "Business Combination Provisions" only, a
majority vote of the stockholders of Voting Stock who are Disinterested
Stockholders (as defined in the Certificate of Incorporation). The provisions
described under "Staggered Board" above may not be amended without the
affirmative vote of stockholders holding at least 66 2/3% of the outstanding
shares of capital stock of the Company entitled to vote generally in the
election of Directors.
CERTAIN ANTI-TAKEOVER EFFECTS
The provisions described under "-- Preferred Stock Purchase Rights Plan,"
"-- Limits on Stock Ownership," "-- Business Combination Provisions" and
"-- Staggered Board" above may have the effect of discouraging unilateral tender
offers or other takeover proposals which certain stockholders might deem in
their interests or in which they might receive a substantial premium over market
price for their shares. The Board's authority to issue and establish the terms
of currently authorized Preferred Stock without stockholder approval may also
have the effect of discouraging takeover attempts. The provisions could also
have the effect of insulating current management against the possibility of
removal and could, by possibly reducing temporary fluctuations in market price
caused by accumulations of Common Stock, deprive stockholders of opportunities
to sell at a temporarily higher market price. However, the Board believes that
the Preferred Stock Purchase Rights Plan and inclusion of the Business
Combination and Staggered Board provisions may help assure fair treatment of
stockholders and continuity of management and that the Limits on Stock Ownership
provision is reasonably necessary to safeguard the Company's REIT status.
STOCK REGISTRAR AND TRANSFER AGENT
Chemical Mellon Shareholder Services is the registrar and transfer agent
for the Common Stock and the Psychiatric Group Stock. Chemical Mellon
Shareholder Services is also depositary for the depositary shares with respect
to the Psychiatric Group Stock.
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DESCRIPTION OF DEBT SECURITIES
The Debt Securities constitute either Senior Securities or Subordinated
Securities as specified in the accompanying Prospectus Supplement. The Senior
Securities will be issued under an Indenture (the "Senior Indenture") to be
entered into by the Company prior to the issuance of any such Senior Securities,
the form of which is filed as an exhibit to the Registration Statement. The
Subordinated Securities will be issued under an Indenture (the "Subordinated
Indenture") to be entered by the Company prior to the issuance of any such
Subordinated Securities, the form of which is also filed as an exhibit to the
Registration Statement. Both the Senior Indenture and the Subordinated Indenture
are subject to and governed by the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). Information regarding the trustee under the Senior
Indenture (the "Senior Trustee") or the trustee under the Subordinated Indenture
(the "Subordinated Trustee"), as the case may be, will be included in any
Prospectus Supplement relating to such Senior Securities or Subordinated
Securities. The Senior Indenture and the Subordinated Indenture are sometimes
collectively referred to herein as the "Indentures;" the Senior Trustee and the
Subordinated Trustee are sometimes collectively referred to herein as the
"Trustees" and individually as a "Trustee." The following discussion includes a
summary description of all material terms of the Indentures, other than terms
that are specific to a particular series of Debt Securities, which will be
described in the Prospectus Supplement relating to such series. Accordingly, for
a description of the terms of a particular issue of Debt Securities reference
must be made to both the accompanying Prospectus Supplement and the following
description. The following summary does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, all of the
provisions of the Indentures, including the definitions therein of certain
capitalized terms in this Prospectus. The following summary is also qualified in
its entirety by reference to the terms made a part of the Indenture by the Trust
Indenture Act. Wherever particular Sections or Articles or defined terms of the
Indentures are referred to herein or in a Prospectus Supplement, such Sections,
Articles or defined terms are incorporated herein or therein by reference.
The Debt Securities may be issued from time to time in one or more series.
The particular terms of each series of Debt Securities offered by any Prospectus
Supplement or Prospectus Supplements will be described in such Prospectus
Supplement or Prospectus Supplements relating to such series.
Other than as set forth under "Certain Covenants of the Company," and only
to the extent applicable to the Debt Securities of a particular series, as
indicated in the applicable Prospectus Supplement, there are no provisions of
the Indentures that afford holders of the Debt Securities protection in the
event of a highly leveraged transaction involving the Company.
GENERAL
The Indentures do not limit the aggregate amount of Debt Securities which
may be issued thereunder, and Debt Securities may be issued thereunder from time
to time in separate series up to the aggregate amount from time to time
authorized by the Company for each series. The Senior Securities will be
unsecured and unsubordinated obligations of the Company and will rank equally
and ratably with other unsecured and unsubordinated indebtedness of the Company.
The Subordinated Securities will be subordinated in right of payment to the
prior payment in full of the Senior Indebtedness (as defined) of the Company, as
described below under "Subordination of Subordinated Securities" and in a
Prospectus Supplement applicable to an offering of Subordinated Securities.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the series of Debt Securities in respect of
which this Prospectus is being delivered: (1) the title of such Debt Securities;
(2) any limit on the aggregate principal amount of such Debt Securities; (3)
whether any of such Debt Securities are to be issuable in permanent global form
("Global Security") and, if so, the terms and conditions, if any, upon which
interests in such Securities in global form may be exchanged, in whole or in
part, for the individual Debt Securities represented thereby; (4) the person to
whom any interest on any Debt Security of the series shall be payable if other
than the person in whose name the Debt Security is registered on the Regular
Record Date; (5) the date or dates on which such Debt Securities will mature;
(6) the rate or rates of interest, if any, or the method of calculation thereof,
which such Debt Securities will bear; (7) the
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date or dates from which any such interest will accrue, the Interest Payment
Dates on which any such interest on such Debt Securities will be payable and the
Regular Record Date for any interest payable on any Interest Payment Date; (8)
the place or places where the principal of, premium (if any) and interest on
such Debt Securities will be payable; (9) the period or periods within which,
the events upon the occurrence of which, and the price or prices at which, such
Debt Securities may, pursuant to any optional provisions, be redeemed or
purchased, in whole or in part, and any terms and conditions relevant thereto
and the period or periods within which and the price or prices at which the Debt
Securities will be redeemed or purchased, in whole or in part, and any terms and
conditions relevant thereto; (10) the obligation of the Company, if any, to
redeem or repurchase such Debt Securities pursuant to any sinking fund or
analogous provisions or at the option of the Holders; (11) the denominations in
which any such Debt Securities will be issuable, if other than denominations of
$1,000 and any integral multiple thereof; (12) the currency, currencies or
currency unit or units of payment of principal of and any premium and interest
on such Debt Securities if other than U.S. dollars; (13) any index or formula
used to determine the amount of payments of principal of and any premium and
interest on such Debt Securities; (14) if the principal of or any premium or
interest on such Debt Securities is to be payable, at the election of the
Company or a Holder thereof, in one or more currencies or currency units other
than that or those in which such Debt Securities are stated to be payable, the
currency, currencies or currency units in which payment of the principal of and
any premium and interest on Debt Securities of such series as to which such
election is made shall be payable, and the periods within which and the terms
and conditions upon which such election is to be made; (15) if other than the
principal amount thereof, the portion of the principal amount of such Debt
Securities of the series which will be payable upon declaration of the
acceleration of the Maturity thereof; (16) the applicability of any provisions
described under "Certain Covenants of the Company"; (17) the applicability of
any provisions described under "Defeasance"; (18) the terms and conditions, if
any, pursuant to which such Debt Securities are convertible or exchangeable into
Common Stock or other securities of the Company or another issuer and (19) any
other terms of such Debt Securities not inconsistent with the provisions of the
applicable Indentures. (Section 301)
Debt Securities may be issued at a discount from their principal amount.
All material United States Federal income tax, accounting and other special
considerations applicable to any such Original Issue Discount Securities will be
described in the applicable Prospectus Supplement.
If the purchase price of any of the Debt Securities is denominated in a
foreign currency or currencies or a foreign currency unit or units or if the
principal of and any premium and interest on any series of Debt Securities is
payable in a foreign currency or currencies or a foreign currency unit or units,
the restrictions, elections, general tax considerations, specific terms and
other information with respect to such issue of Debt Securities and such foreign
currency or currencies or foreign currency unit or units will be set forth in
the applicable Prospectus Supplement.
SUBORDINATION OF SUBORDINATED SECURITIES
The indebtedness evidenced by the Subordinated Securities will be
subordinated and junior in right of payment to the extent set forth in the
Subordinated Indenture to the prior payment in full of amounts then due on all
Senior Indebtedness (as defined below). No payment shall be made by the Company
on account of principal of (or premium, if any) or interest on the Subordinated
Securities or on account of the purchase or other acquisition of Subordinated
Securities, if the maturity of any of the Subordinated Securities shall have
been accelerated, until all amounts due have been paid on all outstanding Senior
Indebtedness, or if (i) there shall have occurred and be continuing a default in
the payment of principal (or premium, if any) or interest on any Senior
Indebtedness beyond any applicable grace period with respect thereto, or any
event of default with respect to any Senior Indebtedness resulting in the
acceleration of the maturity of such Senior Indebtedness, unless and until such
default or event of default shall have been cured or waived or shall have ceased
to exist and such acceleration shall have been rescinded or annulled or (ii) any
such default in payment or event of default shall be the subject of a judicial
proceeding. By reason of these provisions in the event of default of any Senior
Indebtedness, whether now outstanding or hereafter issued, payments of principal
of (and premium, if any) and interest on the Subordinated Securities may not be
permitted to be made until such default is cured or such Senior Indebtedness is
paid in full.
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Upon any distribution of assets of the Company upon any receivership,
dissolution, winding-up, liquidation, reorganization or similar proceeding of
the Company, whether voluntary or involuntary, or in bankruptcy or insolvency,
all principal of (and premium, if any) and interest due upon all Senior
Indebtedness must be paid in full before the Holders of the Subordinated
Securities or the Trustee is entitled to receive or retain any assets so
distributed in respect of the Subordinated Securities. By reason of this
provision, in the event of insolvency Holders of the Subordinated Securities may
recover less than other creditors of the Company, including holders of Senior
Indebtedness.
"Senior Indebtedness" means the principal of (and premium, if any) and
interest on (a) all indebtedness of the Company (including indebtedness of
others guaranteed by the Company) other than the Subordinated Securities which
is (i) for money borrowed or (ii) evidenced by a note or similar instrument
given in connection with the acquisition of any business, properties or assets
of any kind, (b) obligations of the Company as lessee under leases required to
be capitalized on the balance sheet of the lessee under generally accepted
accounting principles, and (c) amendments, renewals, extensions, modifications
and refunding of any such indebtedness or obligation, in any such case whether
outstanding on the date of the Subordinated Indenture or thereafter created,
incurred or assumed, unless in any case in the instrument creating or evidencing
any such indebtedness or obligation or pursuant to which the same is outstanding
it is provided that such indebtedness or obligation is not superior in right of
payment to the Subordinated Securities or it is provided that such obligation is
subordinated to senior indebtedness to substantially the same extent as the
Subordinated Securities are subordinated to Senior Indebtedness. As of June 30,
1995, the amount of Senior Indebtedness was approximately $263 million. The
Subordinated Indenture does not prohibit or limit the incurrence of additional
Senior Indebtedness.
FORM, EXCHANGE, REGISTRATION, CONVERSION, TRANSFER AND PAYMENT
Unless otherwise indicated in the applicable Prospectus Supplement, the
Debt Securities will be issued only in fully registered form in denominations of
$1,000 or integral multiples thereof. (Section 302) Unless otherwise indicated
in the applicable Prospectus Supplement, payment of principal, premium (if any)
and interest on the Debt Securities will be payable, and the exchange,
conversion and transfer of Debt Securities will be registerable, at the office
or agency of the Company maintained for such purposes and at any other office or
agency maintained for such purpose. (Sections 301, 305 and 1002) No service
charge will be made for any registration of transfer or exchange of the Debt
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental change imposed in connection therewith. (Section 305)
All moneys paid by the Company to a Paying Agent for the payment of
principal of and any premium or interest on any Debt Security which remain
unclaimed for two years after such principal, premium or interest has become due
and payable may be repaid to the Company and thereafter the Holder of such Debt
Security may look only to the Company for payment thereof. (Section 1003)
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a Depositary ("Depositary") or its nominee identified in the applicable
Prospectus Supplement. In such a case, one or more Global Securities will be
issued in a denomination or aggregate denominations equal to the portion of the
aggregate principal amount of Outstanding Debt Securities of the series to be
represented by such Global Security or Securities. Unless and until it is
exchanged in whole or in part for Debt Securities in registered form, a Global
Security may not be registered for transfer or exchange except as a whole by the
Depositary for 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 or by such Depositary or any nominee to a successor Depositary or a
nominee of such successor Depositary and except in the circumstances described
in the applicable Prospectus Supplement. (Sections 204 and 305)
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The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Global Security
will be described in the applicable Prospectus Supplement. The Company expects
that the following provisions will apply to depositary arrangements.
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Security to be deposited with
or on behalf of a Depositary will be represented by a Global Security registered
in the name of such Depositary or its nominee. Upon the issuance of such Global
Security, and the deposit of such Global Security with or on behalf of the
Depositary for such Global Security, the Depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the Debt Securities represented by such Global Security to the accounts of
institutions that have accounts with such Depositary or its nominee
("participants"). The accounts to be credited will be designated by the
underwriters or agents of such Debt Securities or by the Company, if such Debt
Securities are offered and sold directly by the Company. Ownership of beneficial
interest in such Global Security will be limited to participants or Persons that
may hold interests through participants. Ownership of beneficial interests by
participants in such Global Security will be shown on, and the transfer of that
ownership interest will be effected only through, records maintained by the
Depositary or its nominee for such Global Security. Ownership of beneficial
interests in such Global Security by Persons that hold through participants will
be shown on, and the transfer of that ownership interest within such participant
will be effected only through, records maintained by such participant. The laws
of some jurisdictions require that certain purchasers of securities take
physical delivery of such securities in certificated form. The foregoing
limitations and such laws may impair the ability to transfer beneficial
interests in such Global Securities.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or Holder of the Securities
represented by such Global Security for all purposes under the applicable
Indenture. Unless otherwise specified in the applicable Prospectus Supplement,
owners of beneficial interests in such Global Security will not be entitled to
have Debt Securities of the series represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of Debt Securities of such series in certificated form and will not be
considered the Holders thereof for any purposes under the applicable Indenture.
(Sections 204 and 305) Accordingly, each Person owning a beneficial interest in
such Global Security must rely on the procedures of the Depositary and, if such
Person is not a participant, on the procedures of the participant through which
such Person owns its interest, to exercise any rights of a Holder under the
applicable Indenture. The Company understands that under existing industry
practices, if the Company requests any action of Holders or an owner of a
beneficial interest in such Global Security desires to give any notice or take
any action a Holder is entitled to give or take under an Indenture, the
Depositary would authorize the participants to give such notice or take such
action, and participants would authorize beneficial owners owning through such
participants to give such notice or take such action or would otherwise act upon
the instructions of beneficial owners owning through them.
Principal of and any premium and interest on a Global Security will be
payable in the manner described in the applicable Prospectus Supplement.
CERTAIN COVENANTS OF THE COMPANY
If so indicated in the applicable Prospectus Supplement with respect to a
particular series of Debt Securities, the Company will be subject to either or
both of the following 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 or its subsidiaries unless the
Debt Securities of such series 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
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outstanding exceed 10% of Consolidated Net Tangible Assets (as defined below) of
the Company and its consolidated subsidiaries and in addition 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 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;
(4) 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;
(5) 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;
(6) 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;
(7) 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;
(8) Liens relating to secured indebtedness of the Company outstanding
as of June 30, 1995; and
(9) 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 (8) 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. (Section 1008)
The Company will also covenant 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
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(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
the character specified in the foregoing clauses (i), (ii) and (iii), to the
full extent of the liability of the guarantor (discounted to 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; "Person" means an individual,
partnership, corporation, joint venture, association, joint stock company,
trust, limited liability company, unincorporated organization, or a government
or agency or political subdivision thereof; "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 any 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 other Debt (to which appropriate reference shall be made in the instruments
evidencing such other 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; and "Liabilities" means, at any date, the items shown
as liabilities on the balance sheet of the Company, except any item of deferred
income, including capital gains. (Section 1009)
EVENTS OF DEFAULT
The following are Events of Default under the Indentures with respect to
Debt Securities of any series: (a) failure to pay principal of or premium, if
any, on any Debt Security of that series when due; (b) failure to pay any
interest on any Debt Security of that series when due, continued for 30 days;
(c) failure to make any sinking fund payment, when due, in respect of any Debt
Security of that series; (d) failure to perform any other covenant of the
Company in the applicable Indenture (other than a covenant included in such
Indenture solely for the benefit of a series of Debt Securities other than that
series), continued for 60 days after written notice as provided in the
respective Indentures; (e) failure to pay at the final maturity thereof the
principal of, or acceleration of, any indebtedness for money borrowed by the
Company in excess of $5 million, if such indebtedness is not discharged, or such
acceleration is not annulled, as provided in the respective Indentures; (f)
certain events of bankruptcy, insolvency or reorganization; and (g) any other
Event of Default provided with respect to Debt Securities of that series.
(Section 501)
If an Event of Default (other than an Event of Default described in clause
(f) above) with respect to Outstanding Debt Securities of any series shall occur
and be continuing, either the Trustee or the Holders of at least 25% in
principal amount of the Outstanding Debt Securities of that series by notice as
provided in the respective Indentures may declare the principal amount (or, if
the Debt Securities of that series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of that series)
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of all Debt Securities of that series to be due and payable immediately. If an
Event of Default described in clause (f) above with respect to the Debt
Securities of any series at the time Outstanding shall occur, the principal
amount of all the Debt Securities of that series (or, in the case of any such
Original Issue Discount Security or other Debt Security, such specified amount)
will automatically, and without any action by the Trustee or any Holder, become
immediately due and payable. However, at any time after a declaration of
acceleration with respect to Debt Securities of any series has been made, but
before a judgment or decree based on such acceleration his been obtained, the
Holders of a majority in principal amount of the Outstanding Debt Securities of
that series may, under certain circumstances, rescind and annul such
acceleration. (Section 502) For information as to waiver or defaults, see
"Modification and Waiver" below.
The Indentures provide that, subject to the duty of the respective Trustees
thereunder during an Event of Default to act with the required standard of care,
such Trustee will be under no obligation to exercise any of its rights or powers
under the respective Indentures at the request or direction of any of the
Holders, unless such Holders shall have offered to such Trustee reasonable
security or indemnity. (Sections 601 and 603) Subject to certain provisions,
including those requiring security or indemnification of the Trustees, 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 applicable Trustee, or
exercising any trust or power conferred on such Trustee, with respect to the
Debt Securities of that series. (Section 512)
No Holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the applicable Indenture or for any remedy
thereunder, unless such Holder shall have previously given to the applicable
Trustee written notice of a continuing Event of Default (as defined) and unless
the Holders of at least 25 percent in aggregate principal amount of the
outstanding Debt Securities of the same series shall have made written request,
and offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and the Trustee shall not have received from the Holders of a majority
in aggregate principal amount of the outstanding Debt Securities of the same
series a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days. (Section 507) However, such
limitations do not apply to a suit instituted by a Holder of a Debt Security for
enforcement of payment of the principal of and interest on such Debt Security on
or after the respective due dates expressed in such Debt Security. (Section 508)
The Company will be required to furnish to the Trustees annually a
statement as to the performance by the Company of its obligations under the
respective Indentures and as to any default in such performance. (Section 1004)
MODIFICATION AND WAIVER
Modifications and amendments of the respective Indentures may be made by
the Company and the Trustee with the consent of the Holders of not less than a
majority in aggregate principal amount of the Outstanding Debt Securities of
each series affected thereby; provided, however, that no such modification or
amendment may, without the consent of the Holder of each Outstanding Debt
Security affected thereby: (a) change the Stated Maturity of the principal of,
or any installment of principal of, or interest on, any Debt Security; (b)
reduce the principal amount of, the rate of interest on, or the premium, if any,
payable upon the redemption of, any Debt Security; (c) reduce the amount of
principal of an Original Issue Discount Security payable upon acceleration of
the Maturity thereof, (d) change the place or currency of payment of principal
of, or premium, if any, or interest on any Debt Security; (e) impair the right
to institute suit for the enforcement of any payment on or with respect to any
Debt Security on or after the Stated Maturity or Redemption Date thereof; (f) in
the case of Subordinated Securities, modify the provisions of the Subordinated
Indenture with respect to subordination or conversion of such Subordinated
Securities in a manner adverse to the Holders, or (g) reduce the percentage in
principal amount of Outstanding Debt Securities of any series, the consent of
the Holders of which is required for modification or amendment of the applicable
Indenture or for waiver of compliance with certain provisions of the applicable
Indenture or for waiver of certain defaults. (Section 902)
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The Holders of at least a majority in aggregate principal amount of the
Outstanding Debt Securities of any series may on behalf of the Holders of all
Debt Securities of that series waive, insofar as that series is concerned,
compliance by the Company with certain covenants of the applicable Indenture.
(Section 1010) The Holders of not less than a majority in principal amount of
the Outstanding Debt Securities of any series may, on behalf of the Holders of
all Debt Securities of that series, waive any past default under the applicable
Indenture with respect to that series, except a default in the payment of the
principal of, or premium, if any, or interest on, any Debt Security of that
series or in respect of a provision which under the applicable Indenture cannot
be modified or amended without the consent of the Holder of each Outstanding
Debt Security of that series affected. (Section 513)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of any Holders of Outstanding Debt
Securities, may consolidate with or merge into, or transfer or lease its assets
substantially as an entirety to, any Person, and any other Person may
consolidate with or merge into, or transfer or lease its assets substantially as
an entirety to, the Company, provided (a) that the Person (if other than the
Company) formed by such consolidation or into which the Company is merged or
which acquires or leases the assets of the Company substantially as an entirety
is a Person organized and existing under the laws of any United States
jurisdiction and assumes the Company's obligations on the Debt Securities and
under the respective Indentures, (b) that after giving effect to such
transaction no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have happened and be
continuing, and (c) that certain other conditions are met. (Article Eight)
DEFEASANCE AND COVENANT DEFEASANCE
If so indicated in the applicable Prospectus Supplement with respect to the
Debt Securities of a series, the Company, at its option, (i) will be discharged
from any and all obligations in respect of the Debt Securities of such series
(except for certain obligations to register the transfer or exchange of Debt
Securities of such series, to replace destroyed, stolen, lost or mutilated Debt
Securities of such series, and to maintain an office or agency in respect of the
Debt Securities and hold moneys for payment in trust) or (ii) will be released
from its obligations to comply with the Covenants that are specified under
"Certain Covenants of the Company" above with respect to the Debt Securities of
such series, and the occurrence of an event described in clause (d) under
"Events of Default" above with respect to any defeased covenant and clauses (e)
and (g) of the "Events of Default" above shall no longer be an Event of Default
if, in either case, the Company irrevocably deposits with the Trustee, in trust,
money or U.S. Government Obligations that through the payment of interest
thereon and principal thereof in accordance with their terms will provide money
in an amount sufficient to pay all of the principal of (and premium, if any) and
any interest on the Debt Securities of such series on the dates such payments
are due (which may include one or more redemption dates designated by the
Company) in accordance with the terms of such Debt Securities. Such a trust may
only be established if, among other things, (a) no Event of Default or event
which with the giving of notice or lapse of time, or both, would become an Event
of Default under the applicable Indenture shall have occurred and be continuing
on the date of such deposit, (b) no Event of Default described under clause (f)
under "Events of Default" above or event which with the giving of notice or
lapse of time, or both, would become an Event of Default described under such
clause (f) shall have occurred and be continuing at any time on or prior to the
90th day following such date of deposit, (c) the Company shall have delivered an
Opinion of Counsel to the effect that the Holders of the Debt Securities of such
series will not recognize gain or loss for United States Federal income tax
purposes as a result of such deposit or defeasance and will be subject to United
States Federal income tax in the same manner as if such defeasance had not
occurred. In the event the Company omits to comply with its remaining
obligations under the applicable Indenture after a defeasance of such Indenture
with respect to the Debt Securities of any series as described under clause (ii)
above and the Debt Securities of such series are declared due and payable
because of the occurrence of any undefeased Event of Default, the amount of
money and U.S. Government Obligations on deposit with the Trustee may be
insufficient to pay amounts due on the Debt Securities of such series at the
time of the acceleration resulting
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from such Event of Default. However, the Company will remain liable in respect
of such payments. (Article Thirteen)
Notwithstanding the description set forth under "Subordination of
Subordinated Securities" above, in the event that the Company deposits money or
U.S. Government Obligations in compliance with the Subordinated Indenture in
order to defease all or certain of its obligations with respect to any
Subordinated Securities, the moneys or U.S. Government Obligations so deposited
will not be subject to the subordination provisions of the Subordinated
Indenture and the indebtedness evidenced by such Subordinated Securities will
not be subordinated in right of payment to the holders of Senior Indebtedness to
the extent of the moneys or U.S. Government Obligations so deposited.
GOVERNING LAW
The Indentures and the Debt Securities will be governed by, and construed
in accordance with, the laws of the State of New York. (Section 112)
REGARDING THE TRUSTEE
The Indentures contain 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 for its own account on certain property received in
respect of any such claim as security or otherwise. (Section 613) The Trustee
will be permitted to engage in certain other transactions; however, if it
acquires any potential conflicting interest and there is a default under the
Debt Securities, it must eliminate such conflict or resign. (Section 608)
DESCRIPTION OF PREFERRED STOCK
The following is a description of certain general terms and provisions of
the Preferred Stock. The particular terms of any series of Preferred Stock will
be described in the applicable Prospectus Supplement. If so indicated in a
Prospectus Supplement, the terms of any such series may differ from the terms
set forth below.
The summary of terms of the Company's preferred stock (including the
Preferred Stock) contained in this Prospectus does not purport to be complete
and is subject to, and qualified in its entirety by, the provisions of the
Company's Certificate of Incorporation and the certificate of designations
relating to each series of the Preferred Stock (the "Certificate of
Designations"), which will be filed as an exhibit to or incorporated by
reference in the Registration Statement of which this Prospectus is a part at or
prior to the time of issuance of such series of the Preferred Stock.
The Certificate of Incorporation of the Company provides that the Company
is authorized to issue 1,000,000 shares of Preferred Stock, par value $0.01 per
share, issuable in series by the Board. As of July 31, 1995, the Company had
outstanding approximately 209,000 shares of Psychiatric Group Stock, which
constitute a separate series of Preferred Stock, issued and outstanding. Such
shares are the only shares of Psychiatric Group Stock authorized by the Board to
be issued, except shares of Psychiatric Group Stock issuable upon exercise of
options granted in connection with the initial issuance of shares of Psychiatric
Group Stock. In addition, the Company has authorized the issuance of
approximately 232,000 Series A Preferred Shares. See "Description of Common
Stock and Psychiatric Group Stock -- Preferred Stock Purchase Rights Plan."
The authorized but unissued shares of Preferred Stock of the Company will
be available for issuance from time to time by the Company at the sole
discretion of the Board for any proper corporate purpose, which could include
raising capital, providing compensation or benefits to employees, paying stock
dividends or acquiring companies or businesses. The Preferred Stock may be
issued in such series and with such voting powers, and such preferences or other
special rights, qualifications, limitations or restrictions, as may be stated
and expressed in the resolutions authorizing its issuance as may be adopted by
the Board from time to time. Under applicable Delaware law, such future
issuances would not require further approval of stockholders, and the Company
would not seek approval of stockholders unless such approval would be required
by stock exchange
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regulations, would be in conjunction with a further amendment to the Certificate
of Incorporation or would otherwise be deemed advisable by the Board. Thus, the
Board of Directors, without stockholder approval, could authorize the issuance
of preferred stock with voting, conversion and other rights that could adversely
affect the voting power and other rights of holders of Common Stock or other
series of preferred stock or that could have the effect of delaying, deferring
or preventing a change in control of the Company. See "Description of Common
Stock and Psychiatric Group Stock -- Preferred Stock Purchase Rights Plan."
The Preferred Stock shall have the dividend, liquidation, redemption and
voting rights set forth below unless otherwise provided in a Prospectus
Supplement relating to a particular series of the Preferred Stock. The
applicable Prospectus Supplement will describe the following terms of the series
of Preferred Stock in respect of which this Prospectus is being delivered: (1)
the designation and stated value per share of such Preferred Stock and the
number of shares offered; (2) the amount of liquidation preference per share;
(3) the initial public offering price at which such Preferred Stock will be
issued; (4) the dividend rate (or method of calculation), the dates on which
dividends shall be payable and the dates from which dividends shall commence to
cumulate, if any; (5) any redemption or sinking fund provisions; (6) any
conversion or exchange rights; (7) whether the Company has elected to offer
Depositary Shares as described below under "Description of Depositary Shares";
and (8) any additional voting, dividend, liquidation, redemption, sinking fund
and other rights, preferences, privileges, limitations and restrictions.
GENERAL
The Preferred Stock will be issued in one or more series. The holders of
Preferred Stock will have no preemptive rights. Preferred Stock, upon issuance
against full payment of the purchase price therefor, will be fully paid and
nonassessable. Neither the par value nor the liquidation preference is
indicative of the price at which the Preferred Stock will actually trade on or
after the date of issuance. The applicable Prospectus Supplement will contain a
description of material United States Federal income tax, accounting and other
considerations relating to the purchase and ownership of the series of Preferred
Stock offered by such Prospectus Supplement.
As described under "Description of Depositary Shares," the Company may, at
its option, elect to offer depositary shares ("Depositary Shares") evidenced by
depositary receipts ("Depositary Receipts"), each representing a fractional
interest (to be specified in the Prospectus Supplement relating to the
particular series of the Preferred Stock) in a share of the particular series of
the Preferred Stock issued and deposited with a Depositary (as defined below).
RANK
The Preferred Stock shall, with respect to dividend rights and rights on
liquidation, winding up and dissolution of the Company, rank prior to the
Company's Common Stock and Psychiatric Group Stock and to all other classes and
series of equity securities of the Company now or hereafter authorized, issued
or outstanding (the Common Stock and such other classes and series of equity
securities collectively may be referred to herein as the "Junior Stock"), other
than any classes or series of equity securities of the Company ranking on a
parity with (the "Parity Stock") or senior to (the "Senior Stock") the Preferred
Stock as to dividend rights and rights upon liquidation, winding up or
dissolution of the Company. The Preferred Stock shall be junior to all
outstanding debt of the Company. The Preferred Stock shall be subject to
creation of Senior Stock, Parity Stock and Junior Stock to the extent not
expressly prohibited by the Company's Certificate of Incorporation.
DIVIDENDS
Holders of shares of Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds of the Company legally
available for payment, cash dividends, payable at such dates and at such rates
per share per annum as set forth in the applicable Prospectus Supplement. Such
rates may be fixed or variable or both. Each declared dividend shall be payable
to holders of record as they appear at the close of business on the stock books
of the Company (or, if applicable, on the records of the Depositary (as
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hereinafter defined) referred to below under "Description of Depositary Shares")
on such record dates, not more than 60 calendar days preceding the payment dates
therefor, as are determined by the Board of Directors (each of such dates, a
"Record Date").
Such dividends may be cumulative or noncumulative, as provided in the
Prospectus Supplement. If dividends on a series of Preferred Stock are
noncumulative and if the Board of Directors fails to declare a dividend in
respect of a dividend period with respect to such series, then holders of such
Preferred Stock will have no right to receive a dividend in respect of such
dividend period, and the Company will have no obligation to pay the dividend for
such period, whether or not dividends are declared payable on any future
Dividend Payment Dates. Dividends on the shares of each series of Preferred
Stock for which dividends are cumulative will accrue from the date on which the
Company initially issues shares of such series.
No full dividends shall be declared or paid or set apart for payment on
preferred stock of the Company of any series ranking, as to dividends, on a
parity with or junior to the series of Preferred Stock offered by the Prospectus
Supplement attached hereto for any period unless full dividends for the
immediately preceding dividend period on such Preferred Stock (including any
accumulation in respect of unpaid dividends for prior dividend periods, if
dividends on such Preferred Stock are cumulative) have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
is set apart for such payment. When dividends are not so paid in full (or a sum
sufficient for such full payment is not so set apart) upon such Preferred Stock
and any other preferred stock of the Company ranking on a parity as to dividends
with the Preferred Stock, dividends upon shares of such Preferred Stock and
dividends on such other preferred stock shall be declared pro rata so that the
amount of dividends declared per share on such Preferred Stock and such other
preferred stock shall in all cases bear to each other the same ratio that
accrued dividends for the then-current dividend period per share on the shares
of such Preferred Stock (including any accumulation in respect of unpaid
dividends for prior dividend periods, if dividends on such Preferred Stock are
cumulative) and accrued dividends, including required or permitted
accumulations, if any, on shares of such other preferred stock, bear to each
other. Unless full dividends on the series of Preferred Stock offered by the
Prospectus Supplement attached hereto have been declared and paid or set apart
for payment for the immediately preceding dividend period (including any
accumulation in respect of unpaid dividends for prior dividend periods, if
dividends on such Preferred Stock are cumulative) (a) no cash dividend or
distribution (other than in shares of Junior Stock) may be declared, set aside
or paid on the Junior Stock, (b) the Company may not repurchase, redeem or
otherwise acquire any shares of its Junior Stock (except by conversion into or
exchange for Junior Stock) and (c) the Company may not, directly or indirectly,
repurchase, redeem or otherwise acquire any shares of Preferred Stock or Parity
Stock otherwise than pursuant to certain pro rata offers to purchase or a
concurrent redemption of all, or a pro rata portion, of the outstanding shares
of such Preferred Stock and Parity Stock (except by conversion into or exchange
for Junior Stock). The Company does not currently have outstanding any Parity
Stock.
CONVERTIBILITY
The terms, if any, on which shares of Preferred Stock of any series may be
exchanged for or converted (mandatorily or otherwise) into shares of Common
Stock of the Company or another series of Preferred Stock or other securities of
the Company or another issuer will be set forth in the Prospectus Supplement
relating thereto. See "Description of Common Stock and Psychiatric Group Stock."
REDEMPTION
The terms, if any, on which shares of Preferred Stock of any series may be
redeemed will be set forth in the related Prospectus Supplement.
LIQUIDATION
Unless otherwise specified in the applicable Prospectus Supplement, in the
event of a voluntary or involuntary liquidation, dissolution or winding-up of
the affairs of the Company, the holders of a series of Preferred Stock will be
entitled, subject to the rights of creditors, but before any distribution or
payment to the
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holders of Common Stock or any other security ranking junior to the Preferred
Stock on liquidation, dissolution or winding up of the Company, to receive an
amount per share as set forth in the related Prospectus Supplement plus accrued
and unpaid dividends for the then-current dividend period (including any
accumulation in respect of unpaid dividends for prior dividend periods, if
dividends on such series of Preferred Stock are cumulative). If the amounts
available for distribution with respect to the Preferred Stock and all other
outstanding stock of the Company ranking on a parity with the Preferred Stock
upon liquidation are not sufficient to satisfy the full liquidation rights of
all the outstanding Preferred Stock and stock ranking on a parity therewith,
then the holders of each series of such stock will share ratably in any such
distribution of assets in proportion to the full respective preferential amount
(which in the case of preferred stock may include accumulated dividends) to
which they are entitled. After payment of the full amount of the liquidation
preference, the holders of shares of Preferred Stock will not be entitled to any
further participation in any distribution of assets by the Company.
VOTING
The Preferred Stock of a series will not be entitled to vote, except as
provided below or in the applicable Prospectus Supplement and as required by
applicable law. Unless otherwise specified in the related Prospectus Supplement,
at any time dividends in an amount equal to six quarterly dividend payments on
the Preferred Stock shall have accrued and be unpaid, holders of the Preferred
Stock shall have the right to a separate class vote (together with the holders
of shares of any Parity Stock upon which like voting rights have been conferred
and are exercisable, "Voting Parity Stock") to elect two members of the Board of
Directors at the next annual meeting of stockholders and thereafter until
dividends on the Preferred Stock have been paid in full for four consecutive
dividend periods, including the last preceding dividend period. Additionally,
without the affirmative vote of the holders of two-thirds of the shares of
Preferred Stock then outstanding (voting separately as a class together with any
Voting Parity Stock), the Company may not, either directly or indirectly or
through merger or consolidation with any other corporation, (i) approve the
authorization, creation or issuance, or an increase in the authorized or issued
amount, of any class or series of stock ranking prior to the shares of Preferred
Stock in rights and preferences or (ii) amend, alter or repeal its Certificate
of Incorporation or the Certificate of Designations so as to materially and
adversely change the specific terms of the Preferred Stock. An amendment which
increases the number of authorized shares of or authorizes the creation or
issuance of other classes or series of preferred stock ranking junior to or on a
parity with the Preferred Stock with respect to the payment of dividends or
distribution of assets upon liquidation, dissolution or winding up, or
substitutes the surviving entity in a merger, consolidation, reorganization or
other business combination for the Company, shall not be considered to be such
an adverse change.
As more fully described under "Description of Depositary Shares" below, if
the Company elects to issue Depositary Shares, each representing a fraction of a
share of a series of the Preferred Stock, each such Depositary Share will, in
effect, be entitled to such fraction of a vote per Depositary Share.
NO OTHER RIGHTS
The shares of a series of Preferred Stock will not have any preferences,
voting powers or relative, participating, optional or other special rights
except as set forth above or in the related Prospectus Supplement, the
Certificate of Incorporation and in the certificate of designations or as
otherwise required by law.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares and Depositary Receipts does not purport to be complete and is subject to
and qualified in its entirety by reference to the forms of Deposit Agreement and
Depositary Receipts relating to each series of the Preferred Stock which have
been or will be filed with the Commission at or prior to the time of the
offering of such series of the Preferred Stock.
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GENERAL
The Company may, at its option, elect to offer fractional interests in
shares of Preferred Stock, rather than shares of Preferred Stock. In the event
such option is exercised, the Company will provide for the issuance by a
Depositary to the public of receipts for Depositary Shares, each of which will
represent a fractional interest (to be set forth in the Prospectus Supplement
relating to a particular series of the Preferred Stock which will be filed with
the Commission at or prior to the time of the offering of such series of the
Preferred Stock as described below).
The shares of any series of the Preferred Stock underlying the Depositary
Shares will be deposited under a separate Deposit Agreement (the "Deposit
Agreement") between the Company and a bank or trust company selected by the
Company having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000 (the "Depositary"). The Prospectus
Supplement relating to a series of Depositary Shares will set forth the name and
address of the Depositary. Subject to the terms of the Deposit Agreement, each
owner of a Depositary Share will be entitled, in proportion to the applicable
fractional interest in a share of Preferred Stock underlying such Depositary
Shares, to all the rights and preferences of the Preferred Stock underlying such
Depositary Share (including dividend, voting, redemption, conversion and
liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of the Company, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts but
not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay, and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at the Company's expense.
Upon surrender of Depositary Receipts at the office of the Depositary and
upon payment of the charges provided in the Deposit Agreement and subject to the
terms thereof, a holder of Depositary Shares is entitled to have the Depositary
deliver to such holder the whole shares of Preferred Stock underlying the
Depositary Shares evidenced by the surrendered Depositary Receipts.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all the dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
numbers of such Depositary Shares owned by such holders on the relevant record
date. Fractions will be rounded down to the nearest whole cent.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
The Deposit Agreement will also contain provisions relating to the manner
in which any subscription or similar rights offered by the Company to holders of
the Preferred Stock shall be made available to holders of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of the Preferred Stock held by the Depositary. The Depositary
shall mail notice of redemption not less than 30 and not more than 60 days prior
to the date fixed for redemption to the record holders of the Depositary Shares
to be so redeemed at their respective addresses appearing in the Depositary's
books. The redemption price per Depositary Share will be equal to the
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applicable fraction of the redemption price per share payable with respect to
such series of the Preferred Stock. Whenever the Company redeems shares of
Preferred Stock held by the Depositary, the Depositary will redeem as of the
same redemption date the number of Depositary Shares relating to shares of
Preferred Stock so redeemed. If less than all of the Depositary Shares are to be
redeemed, the Depositary Shares to be redeemed will be selected by lot or pro
rata as may be determined by the Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which the
holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Depositary of the Depositary Receipts evidencing such
Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the Depositary as to the exercise
of the voting rights pertaining to the number of shares of Preferred Stock
underlying such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the number of shares of Preferred Stock
underlying such Depositary Shares in accordance with such instructions, and the
Company will agree to take all action which may be deemed necessary by the
Depositary in order to enable the Depositary to do so. The Depositary will
refrain from voting shares of Preferred Stock to the extent it does not receive
specific instructions from the holders of Depositary Shares relating to such
Preferred Stock.
AMENDMENT AND TERMINATION OF THE DEPOSITARY AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary. However, any amendment which materially
and adversely alters the rights of the existing holders of Depositary Shares
will not be effective unless such amendment has been approved by the record
holders of at least a majority of the Depositary Shares then outstanding. A
Deposit Agreement may be terminated by the Company or the Depositary only if (i)
all outstanding Depositary Shares relating thereto have been redeemed or (ii)
there has been a final distribution in respect of the Preferred Stock of the
relevant series in connection with any liquidation, dissolution or winding up of
the Company and such distribution has been distributed to the holders of the
related Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of the
Preferred Stock and any redemption of the Preferred Stock. Holders of Depositary
Shares will pay other transfer and other taxes and government charges and such
other charges as are expressly provided in the Deposit Agreement for the
accounts.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Shares all reports
and communications from the Company which are delivered to the Depositary and
which the Company is required to furnish to the holders of the Preferred Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. Neither the Company nor the Depositary
will be subject to any liability under the Deposit Agreement to any holder of a
Depositary Share, other than for their gross negligence or willful misconduct,
and they will not be obligated to prosecute or defend any legal proceeding in
respect of any Depositary Shares or Preferred Stock unless
31
<PAGE> 34
satisfactory indemnity is furnished. They may rely upon written advice of
counsel or accountants, or information provided by persons presenting Preferred
Stock for deposit, holders of Depositary Shares or other persons believed to be
competent and on documents believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the Company notice
of its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having a combined capital and surplus of at
least $50,000,000.
DESCRIPTION OF WARRANTS
The Company may issue, together with any other series of Securities offered
or separately, Warrants entitling the holder to purchase from or sell to the
Company, or to receive from the Company the cash value of the right to purchase
or sell, Debt Securities, shares of Preferred Stock, Depositary Shares, Common
Stock or other securities. The Warrants are to be issued under Warrant
Agreements (each a "Warrant Agreement") to be entered into between the Company
and a bank or trust company, as warrant agent (the "Warrant Agent"), all as set
forth in the applicable Prospectus Supplement relating to the particular issue
of Warrants. Copies of the forms of Warrant Agreement, including the forms of
Warrant Certificates representing the Warrants (the "Warrant Certificates"), are
filed as exhibits to the Registration Statement of which this Prospectus forms a
part.
In the case of each series of Warrants, the applicable Prospectus
Supplement will describe the terms of the Warrants being offered thereby,
including the following, if applicable: (i) the offering price; (ii) the
currencies in which such Warrants are being offered; (iii) the number of
Warrants offered; (iv) the securities underlying the Warrants; (v) the exercise
price, the procedures for exercise of the Warrants and the circumstances, if
any, that will cause the Warrants to be deemed to be automatically exercised;
(vi) the date on which the right to exercise the Warrants shall commence and the
date on which such right shall expire; (vii) U.S. federal income tax
consequences; and (viii) other terms of the Warrants.
Warrants may be exercised at the appropriate office of the Warrant Agent or
any other office indicated in the applicable Prospectus Supplement. Prior to the
exercise of Warrants entitling the holder to purchase any securities, holders of
such Warrants will not have any of the rights of holders of the securities
purchasable upon such exercise and will not be entitled to payments made to
holders of such securities.
The Warrant Agreements may be amended or supplemented without the consent
of the holders of the Warrants issued thereunder to effect changes that are not
inconsistent with the provisions of the Warrants and that do not adversely
affect the interests of the holders of the Warrants.
PLAN OF DISTRIBUTION
The Company may offer Securities to or through underwriters, through agents
or directly to other purchasers. The accompanying Prospectus Supplement sets
forth the names of any underwriters or agents involved in the sale of the
Securities in respect of which this Prospectus is being delivered.
The distribution of Securities may be effected from time to time in one or
more transactions at a fixed price or prices, which may be changed, at market
prices prevailing at the time of sale, at prices related to such market prices
or at negotiated prices.
In connection with the sale of Securities, underwriters or agents may
receive compensation from the Company or from purchasers in the form of
discounts, concessions or commissions. The accompanying Prospectus Supplement
sets forth the terms of the offering of the Securities in respect of which this
Prospectus is being delivered, including any underwriting discounts and other
items constituting compensation of the
32
<PAGE> 35
underwriters and agents. Underwriters, agents and dealers participating in the
distribution of the Securities may be deemed to be underwriters within the
meaning of the Securities Act.
Pursuant to agreements that may be entered into between the Company and any
underwriters or agents named in the Prospectus Supplement, such underwriters or
agents may be entitled to indemnification by the Company against certain
liabilities, including liabilities under the Securities Act.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as agents for the Company to solicit offers
by certain institutional investors to purchase Debt Securities or Preferred
Stock from the Company pursuant to contracts providing for payment and delivery
on a future date. Institutions with which such contracts may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others, but shall in all
cases be subject to the approval of the Company. The obligations of the
purchaser under any such contract will not be subject to any conditions except
(i) the investment in the Debt Securities or Preferred Stock by the institution
shall not at the time of delivery be prohibited by the laws of any jurisdiction
in the United States to which such institution is subject, and (ii) if a portion
of the Debt Securities or Preferred Stock is being sold to underwriters, the
Company shall have sold to such underwriters the Debt Securities or Preferred
Stock not sold for delayed delivery. Underwriters and such other persons will
not have any responsibility in respect of the validity or performance of such
contracts.
All Debt Securities, Preferred Stock and Warrants offered will be a new
issue of securities with no established trading market. Any underwriters to whom
such Debt Securities, Preferred Stock and Warrants are sold by the Company for
public offering and sale may make a market in such Debt Securities, Preferred
Stock and Warrants, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of or the trading markets for any Debt Securities,
Preferred Stock or Warrants.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with and perform services for the Company in the
ordinary course of business.
The specific terms and manner of sale of the Securities in respect of which
this Prospectus is being delivered are set forth or summarized in the Prospectus
Supplement.
VALIDITY OF SECURITIES
The validity of the Securities offered will be passed upon for the Company
by Davis, Graham & Stubbs, L.L.C., Denver, Colorado, and for the Underwriters or
agents, if any, by Sullivan & Cromwell, Los Angeles, California, or such other
counsel as may be named in the accompanying Prospectus Supplement.
EXPERTS
The consolidated balance sheets of American Health Properties, Inc. and
subsidiaries as of December 31, 1994 and December 31, 1993 and the related
consolidated statements of operations, stockholders' equity and cash flows for
each of the three years in the period ended December 31, 1994; the combined
balance sheets of the Core Group (a business unit of American Health Properties,
Inc.) as of December 31, 1994 and December 31, 1993 and the related combined
statements of operations, total attributed equity and cash flows for each of the
three years in the period ended December 31, 1994; and the combined balance
sheets of the Psychiatric Group (a business unit of American Health Properties,
Inc.) as of December 31, 1994 and December 31, 1993 and the related combined
statements of operations, total attributed equity and cash flows for each of the
three years in the period ended December 31, 1994, incorporated by reference in
this Prospectus and elsewhere in the Registration Statement have been audited
by, Arthur Andersen LLP, independent public accountants, as stated in their
reports with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said reports.
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<PAGE> 36
GLOSSARY
"Available Dividend Amount," on any date (the "calculation date") with
respect to the Common Stock or the Psychiatric Group Stock (the "subject group
stock") issued with reference to either Group (the "subject group"), means
either:
(i) the excess of (x) an amount equal to the total assets of the
subject group less its total liabilities as of such calculation date,
determined in accordance with Delaware law applied as if the subject group
were a Delaware corporation, over (y) the sum of the aggregate par value of
all outstanding subject group stock and all other capital stock of the
Company attributed to the subject group; or
(ii) in case there shall be no such excess, an amount equal to the net
profits, if any, of the subject group for the fiscal year in which the
dividend is declared and/or the preceding fiscal year, determined in
accordance with Delaware law applied as if the subject group were a
Delaware corporation.
"Board" means the Board of Directors of the Company.
"Core Group" means all assets and liabilities of, and all activities
engaged in by, the Company and its subsidiaries, other than assets, liabilities
and activities which comprise part of the Psychiatric Group. Future issuances of
Common Stock or any other capital stock of the Company (other than Psychiatric
Group Stock) will be deemed to be for the account of, and net proceeds from such
issuances will be deemed to be assets of, the Core Group. All dividends or other
distributions on or repurchases of the Common Stock or any other capital stock
of the Company (other than Psychiatric Group Stock), and all costs attributed by
the Board to the Core Group, will be deemed to be funded out of assets of the
Core Group. In the case of an issuance of shares of Common Stock as a dividend
or other distribution on Psychiatric Group Stock, the Psychiatric Group will be
deemed to have purchased such shares for an amount equal to the average Market
Value of such shares for the ten consecutive Trading Days ending on the last
Trading Day prior to the record date for determining holders of Psychiatric
Group Stock entitled to receive such dividend or distribution, and an amount
equal to such purchase price shall be deemed to have been transferred from the
Psychiatric Group to the Core Group.
"Fair Market Value" for any assets means the price that a willing buyer
adequately informed and not compelled to buy would pay for such assets to a
willing seller adequately informed and not compelled to sell, as determined by
the Board (whose determination shall be conclusive).
"Funds From Operations" as used herein means net income (loss) computed in
accordance with GAAP, excluding gains (losses) from sales of property, adjusted
for write-downs of mortgage notes and investments in real estate and certain
other non-cash items, primarily depreciation and amortization. Funds From
Operations does not represent cash generated from operating activities in
accordance with GAAP and should not be considered an alternative to net income
as an indicator of the Company's operating performance or an alternative to cash
flow as a measure of liquidity.
"GAAP" means generally accepted accounting principles.
"Group" means the Core Group or the Psychiatric Group.
"Market Value" of any stock on any Trading Day means the average of the
high and low reported sales prices regular way of a share of such stock on such
Trading Day or in case no such reported sale takes place on such Trading Day the
average of the reported closing bid and asked prices regular way of a share of
such stock on such Trading Day, in either case on the New York Stock Exchange
Composite Tape or other national securities exchange, or if the shares of such
stock are not listed or admitted to trading on any national securities exchange
on such Trading Day, on the NASDAQ/NM, or if the shares of such stock are not
listed or admitted to trading on any national securities exchange or quoted on
such National Market on such Trading Day, the average of the closing bid and
asked prices of a share of such stock in the over-the-counter market on such
Trading Day as furnished by any New York Stock Exchange member firm selected
from time to time by the Company, or if such closing bid and asked prices are
not made available by any such New York Stock Exchange member firm on such
Trading Day, the market value of a share of such stock (as determined by the
Board, whose determination shall be conclusive); provided that, for purposes of
determining the ratios which
34
<PAGE> 37
compare the Market Values of Common Stock and Psychiatric Group Stock, as
calculated over any period, (i) the "Market Value" of any share of Common Stock
and/or Psychiatric Group Stock on any day prior to the "ex" date or any similar
date occurring during such period for any dividend or distribution paid or to be
paid with respect to such stock shall be reduced by the fair market value of the
per share amount of such dividend or distribution (as determined by the Board,
whose determination shall be conclusive) and (ii) the "Market Value" of any
share of Common Stock and/or Psychiatric Group Stock on any day prior to (A) the
effective date of any subdivision (by stock split or otherwise) or combination
occurring during such period or (B) the "ex" date or any similar date occurring
during such period for any dividend or distribution with respect to such stock
in shares of such stock shall be appropriately adjusted to reflect such
subdivision, combination, dividend or distribution. For purposes of the
foregoing, the Market Value of the Psychiatric Group Stock on any day will be
deemed to equal ten times (or such other ratio as reflects the number or
fraction of shares of Psychiatric Group Stock that a Depositary Share
represents, if such number or fraction is changed) the Market Value of the
Depositary Shares on such day.
"NASDAQ/NM" means the National Association of Securities Dealers Automated
Quotations National Market.
"Net Fair Market Value" of the Psychiatric Group or Core Group, as the case
may be, means the hypothetical Fair Market Value of 100% of the stock of a
corporation, assuming the corporation had all of the assets and liabilities of
such Group and no other assets or liabilities, as determined by the Board (whose
determination shall be conclusive).
"Net Proceeds from Psychiatric Group Asset Sales" means the net proceeds of
any sales of Psychiatric Group investments (after transaction costs and reserves
for contingencies).
"Psychiatric Group" means (a) the interests of the Company and its
subsidiaries in their respective investments in psychiatric hospitals, (b) all
activities engaged in by the Company and its subsidiaries in connection with
such investments and (c) all assets and liabilities of the Company or any of its
subsidiaries relating to or arising out of, or otherwise attributed by the Board
to, such investments or activities. Future issuances of Psychiatric Group Stock
will be deemed to be for the account of, and net proceeds from such issuances
will be deemed to be assets of, the Psychiatric Group. All dividends or other
distributions on or repurchases of the Psychiatric Group Stock, and all costs
attributed by the Board to the Psychiatric Group, will be deemed to be funded
out of assets of the Psychiatric Group. In the case of an issuance of shares of
Common Stock as a dividend or other distribution on Psychiatric Group Stock, the
Psychiatric Group will be deemed to have purchased such shares for an amount
equal to the average Market Value of such shares for the ten consecutive Trading
Days ending on the last Trading Day prior to the record date for determining
holders of Psychiatric Group Stock entitled to receive such dividend or
distribution, and an amount equal to such purchase price shall be deemed to have
been transferred from the Psychiatric Group to the Core Group.
"REIT" means a real estate investment trust.
"Trading Day" means each weekday other than any day on which the Common
Stock or Depositary Shares, as the case may be, is not traded on any national
securities exchange or the NASDAQ/NM or in the over-the-counter market.
35
<PAGE> 38
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Estimated expenses in connection with the issuance and distribution of the
Securities being registered are as follows:
<TABLE>
<S> <C>
SEC registration fee..................................................... $ 94,828
Blue Sky fees and expenses (including legal fees)........................ 25,000
Legal fees and expenses.................................................. 200,000
Accounting fees and expenses............................................. 100,000
Printing and engraving expenses.......................................... 300,000
Rating agency fees....................................................... 75,000
Trustees' fees and expenses.............................................. 30,000
Miscellaneous............................................................ 75,182
--------
Total.......................................................... $900,000*
========
</TABLE>
---------------
* All amounts listed above, except for the registration fee, are estimates.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law grants to the Company
the power to indemnify its directors, employees and agents against liability
arising out of their respective capacities as directors, officers employees or
agents. Article V of the Company's Certificate of Incorporation provides for the
limitation of personal liability of the directors of the Company as follows:
ARTICLE V
PROVISIONS FOR DEFINING, LIMITING AND
REGULATING CERTAIN POWERS OF THE
CORPORATION AND OF THE DIRECTORS
AND STOCKHOLDERS
Section 4. A Director of this Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a Director, except for liability (i) for any
breach of the Director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section
174 of the Delaware General Corporation Law, or (iv) for any transaction
from which the Director derived any improper personal benefit. If the
Delaware General Corporation Law is amended after the date hereof to permit
the further elimination or limitation of the personal liability of
directors, then the liability of a Director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended.
Article V of the Company's Bylaws provides for indemnification of officers,
directors and employees of the Company as follows:
Section 13. Indemnification. Each officer, director and employee of
the Corporation shall be indemnified by the Corporation as provided in the
Certificate of Incorporation.
The Company has entered into indemnification agreements with its
directors that would require the Company, subject to any limitations on the
maximum permissible indemnification that may exist at law, to indemnify a
director for claims that arise because of his capacity as a director. The
Company also
II-1
<PAGE> 39
provides its directors and officers with coverage pursuant to a policy of
directors' and officers' liability insurance.
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
4.1 Restated Certificate of Incorporation
4.2 Certificate of Designations of Psychiatric Group Preferred Stock, incorporated by
reference from Exhibit 4.1 to the Current Report on Form 8-K dated August 14, 1995
4.3 Amended and Restated By-laws, as amended to date, incorporated by reference from
Exhibit 3.2 to the Annual Report on Form 10-K for the period ended December 31,
1992 (Commission File No. 1-9381)
4.4 Rights Agreement dated as of April 10, 1990, incorporated by reference from Exhibit
2 to the Company's Registration Statement on Form 8-A dated April 10, 1990
(Commission File No. 1-9381)
4.5 Form of Senior Indenture, including form of Senior Debt Security
4.6 Form of Subordinated Indenture, including form of Subordinated Security
4.7 Form of Certificate of Designations of Preferred Stock
4.8 Form of Deposit Agreement, including form of Depositary Receipt for Depositary
Shares
4.9 Specimen Stock Certificate with respect to Preferred Stock
4.10 Specimen Stock Certificate with respect to Common Stock
4.11 Form of Preferred Stock Warrant Agreement (including form of Preferred Stock
Warrant Certificate)
4.12 Form of Common Stock Warrant Agreement (including form of Common Stock Warrant
Certificate)
4.13 Form of Debt Warrant Agreement (including form of Debt Warrant Certificate)
5.1 Opinion of Davis, Graham & Stubbs, L.L.C.*
12.1 Statement regarding computations of ratio of earnings to fixed charges
23.1 Consent of Arthur Andersen LLP, independent public accountants
23.2 Consent of Davis, Graham & Stubbs, L.L.C. (included in Exhibit 5.1)*
24.1 Powers of Attorney (included in signature page at page II-4)
</TABLE>
---------------
* To be filed by amendment
ITEM 17. UNDERTAKINGS
(A) The undersigned 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 of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. 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> 40
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(B) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in 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.
(C) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Company pursuant to the foregoing provisions or otherwise, the Company has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(D) The undersigned registrant hereby undertakes that:
(i) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Company pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(ii) For purposes of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(E) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the Senior Trustee or the
Subordinated 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 Trust Indenture Act.
II-3
<PAGE> 41
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 Denver, Colorado on the 17th day of August, 1995.
AMERICAN HEALTH PROPERTIES, INC.
By: /s/ Joseph P. Sullivan
-----------------------------------
Joseph P. Sullivan
President and Chief Executive
Officer
Each person whose signature to the Registration Statement appears below
hereby appoints each of Joseph P. Sullivan, Geoffrey D. Lewis, Esq. and Michael
J. McGee as his attorney-in-fact to sign on his behalf individually and in the
capacity stated below and to file all supplements, amendments and post-effective
amendments to this Registration Statement, and any and all instruments or
documents filed thereto, and any such attorney-in-fact may make such changes and
additions to this Registration Statement as such attorney-in-fact may deem
necessary or appropriate.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the foregoing persons in the
capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ Joseph P. Sullivan Director, President and Chief August 17, 1995
------------------------------------- Executive Officer
Joseph P. Sullivan
/s/ Michael J. McGee Vice President, Controller August 17, 1995
------------------------------------- (Principal Financial and
Michael J. McGee Accounting Officer) and Assistant
Secretary
/s/ Walter J. McNerny Chairman of the Board of Directors August 17, 1995
-------------------------------------
Walter J. McNerny
/s/ Norman Barker, Jr. Director August 17, 1995
-------------------------------------
Norman Barker, Jr.
/s/ Royce Diener Director August 17, 1995
-------------------------------------
Royce Diener
/s/ James L. Fishel Director August 17, 1995
-------------------------------------
James L. Fishel
Director
-------------------------------------
Charles M. Haar
/s/ Sheldon S. King Director August 17, 1995
-------------------------------------
Sheldon S. King
/s/ Louis T. Rosso Director August 17, 1995
-------------------------------------
Louis T. Rosso
</TABLE>
II-4
<PAGE> 42
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DOCUMENT NUMBER
------- --------------------------------------------------------------------- -----
<C> <S> <C>
4.1 Restated Certificate of Incorporation
4.5 Form of Senior Indenture, including form of Senior Debt Security
4.6 Form of Subordinated Indenture, including form of Subordinated
Security
4.7 Form of Certificate of Designations of Preferred Stock
4.8 Form of Deposit Agreement, including form of Depositary Receipt for
Depositary Shares
4.9 Specimen Stock Certificate with respect to Preferred Stock
4.10 Specimen Stock Certificate with respect to Common Stock
4.11 Form of Preferred Stock Warrant Agreement (including form of
Preferred Stock Warrant Certificate)
4.12 Form of Common Stock Warrant Agreement (including form of Common
Stock Warrant Certificate)
4.13 Form of Debt Warrant Agreement (including form of Debt Warrant
Certificate)
12.1 Statement regarding computations of ratio of earnings to fixed
charges
23.1 Consent of Arthur Andersen LLP, independent public accountants
</TABLE>
<PAGE> 1
RESTATED CERTIFICATE OF INCORPORATION
OF
AMERICAN HEALTH PROPERTIES, INC.
ARTICLE I
NAME
The name of the Corporation is:
American Health Properties, Inc.
ARTICLE II
ADDRESS
The address of the registered office of the Corporation in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, New Castle County,
Wilmington, Delaware 19801. The name of the Corporation's registered agent at
such registered office is The Corporation Trust Company.
ARTICLE III
PURPOSE
The purpose for which the Corporation is formed is to engage in the
ownership of real property and any other
1
<PAGE> 2
lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware as now or hereafter in force.
ARTICLE IV
CAPITAL STOCK
Section 1. The total number of shares of capital stock which the
Corporation shall have authority to issue is One Hundred and One Million
(101,000,000), of which One Hundred Million (100,000,000) shall be shares of
Common Stock having a par value of $0.01 per share and One Million (1,000,000)
shall be shares of Preferred Stock having a par value of $0.01 per share.
Subject to the rights of the holders of any class or series of
Preferred Stock as may be set forth in a resolution of the Board of Directors
establishing such class or series pursuant to Section 3 of this Article IV, the
authorized number of shares of Common Stock and/or Preferred Stock may be
increased or decreased (but not below the number of shares of such class or
series then outstanding) by an amendment of this Certificate of Incorporation
adopted pursuant to the General Corporation Law of the State of Delaware as now
or hereafter in force.
2<PAGE> 3
Section 2. Each share of Common Stock shall entitle the owner thereof
to vote at the rate of one (1) vote for each share of Common Stock held.
Section 3. Shares of Preferred Stock may be issued from time to time
in one or more classes or series, each of which class or series shall have such
distinctive designation or title as shall be fixed by resolution of the Board
of Directors of the Corporation prior to the issuance of any shares of that
class or series. Each such class or series of Preferred Stock shall have such
voting powers, full or limited, or no voting powers, and such designations,
preferences and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as shall be stated and
expressed in the resolution or resolutions providing for the issuance of such
class or series of Preferred Stock as may be adopted from time to time by the
Board of Directors prior to the issuance thereof, all in accordance with the
laws of the State of Delaware. The Board of Directors shall have the power to
specify the number of shares of any series or class of Preferred Stock,
including the power to increase or decrease (but not below the number of shares
of such class or series then outstanding) the number of shares of any class or
series subsequent to the issuance of shares of that class or series.
3
<PAGE> 4
ARTICLE V
PROVISIONS FOR DEFINING, LIMITING AND
REGULATING CERTAIN POWERS OF THE
CORPORATION AND OF THE DIRECTORS
AND STOCKHOLDERS
Section 1. The affirmative vote of (a) the holders of not less than
80% of the outstanding shares of "Voting Stock" (as hereinafter defined) of the
Corporation and (b) the holders of a majority of shares of Voting Stock who are
Disinterested Stockholders (as hereinafter defined) shall be required for the
approval or authorization of any "Business Combination" (as hereinafter
defined) of the Corporation with any "Related Person" (as hereinafter defined).
However, such 80% and majority voting requirements shall not be applicable if a
majority of the Continuing Directors (as hereinafter defined) shall have
expressly approved the acquisition of outstanding shares of Voting Stock of the
Corporation that caused the Related Person to become a Related Person or shall
have given approval to the Business Combination.
For purposes of this Article V, Section 1:
(i) The term "Business Combination" shall mean (a) any merger or
consolidation of the Corporation or any
4
<PAGE> 5
Subsidiary (as herein defined) (other than pursuant to Section 253 of
the Delaware General Corporation Law, or any successor provision thereto
with or into any corporation which owns at least 90% of the outstanding
shares of each class of stock of the Corporation or such Subsidiary)
with (i) any Related Person or (ii) any other corporation (whether
or not itself a Related Person) which is, or after such merger or
consolidation would be, an Affiliate or Associate (as each such term
is hereinafter defined) of a Related Person; (b) any sale, lease,
exchange, mortgage, pledge, transfer or other disposition (in one
transaction or a series of transactions) to or with any Related Person
or any Affiliate or Associate of any Related Person of any assets of
the Corporation (including the securities of any Subsidiary) or any
Subsidiary having an aggregate fair market value of $20,000,000 or
more; (c) the issuance or transfer by the Corporation or any Subsidiary
(in one transaction or a series of transactions) of any securities of
the Corporation or any Subsidiary to any Related Person having an
aggregate fair market value of $20,000,000 or more, other than (i)
by any distribution pro rata to, or exchange offer made to, all holders
of a publicly-held class or series of stock of the Corporation or of
any Subsidiary, or (ii) upon the exercise, conversion or
5<PAGE> 6
exchange of securities of the Corporation or any Subsidiary exercisable,
convertible or exchangeable into or for the securities of the Corporation or
any Subsidiary; (d) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation proposed by or on behalf of a Related
Person or any Affiliate or Associate of any Related Person; or (e) any
reclassification of securities (including any reverse stock split), or
recapitalization of the Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any other transaction involving
the Corporation or any Subsidiary (whether or not with or into or otherwise
involving a Related Person) which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares of any class of
Voting Stock of the Corporation or any Subsidiary which is directly or
indirectly owned by any Related Person or any Affiliate or Associate of any
Related Person.
(ii) The term "Related Person" shall mean and include any individual,
corporation, partnership or other person or entity which, together with
its Affiliates and Associates is the "beneficial owner" (as defined on
October 1, 1986 in Rule 13d-3 under the Securities Exchange Act of 1934)
in the aggregate of 10% or more of
6
<PAGE> 7
the outstanding Voting Stock of the Corporation, or any Affiliate or
Associate of the Corporation.
(iii) The terms "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934 (the "Exchange Act"),
as in effect on December 1, 1986.
(iv) The term "Continuing Director" shall mean any member of the Board
of Directors who is unaffiliated with, and not a nominee of, the Related
Person and was a member of the Board of Directors prior to the time that
the Related Person became a Related Person and any successor of a
Continuing Director who is unaffiliated with, and not a nominee of, the
Related Person and who is recommended to succeed a Continuing Director by a
majority of Continuing Directors then on the Board of Directors.
(v) The term "Disinterested Stockholder" shall mean a holder of Voting
Stock who is not a Related Person or an Affiliate or Associate of a Related
Person and who is not beneficially owned (pursuant to the application of
Rule 13d-3 under the Exchange Act) by a Related Person.
7
<PAGE> 8
(vi) Without limitation, any shares of Common Stock of the Corporation
that any Related Person has the right to acquire pursuant to any agreement,
or upon exercise of conversion rights, warrants or options, or otherwise,
shall be deemed beneficially owned by the Related Person.
(vii) The term "Subsidiary" shall mean any corporation or other entity
of which more than a majority of the Voting Stock (or with respect to an
entity other than a corporation, of any security entitled to vote generally
in the election or appointment of the directors or persons acting in a
similar capacity for such entity), is owned, directly or indirectly, by the
Corporation.
(viii) The term "Voting Stock" shall mean the outstanding shares of
capital stock of the Corporation, or any Subsidiary (as applicable),
entitled to vote generally in the election of directors thereof. In a vote
required by or provided for in this Article V, Section 1, each share of
Voting Stock shall have the number of votes granted to it generally in the
election of Directors of the Corporation.
8
<PAGE> 9
Notwithstanding any other provision of this Certificate of
Incorporation, the affirmative vote of (a) the holders of not less than 80% of
the Voting Stock and (b) the holders of a majority of shares of Voting Stock
who are Disinterested Stockholders, shall be required to repeal, rescind, alter
or amend any provision contained in this Section 1 of Article V.
Section 2. Except as may otherwise be provided pursuant to Section 3
of Article IV hereof in connection with rights to elect additional Directors
under specified circumstances granted to the holders of any class or series of
Preferred Stock, the number of Directors of the Corporation shall be determined
by or in the manner provided in the Bylaws of the Corporation as from time to
time amended.
The holders of any class or classes of Preferred Stock or any series
thereof may be entitled, if so provided in the resolution of the Board of
Directors fixing the terms of such class, classes or series pursuant to Section
3 of Article IV hereof, to elect one or more Directors and to fill, or
authorize the Directors so elected to fill, vacancies and newly created
directorships of the class of Directors elected by such class, classes or
series, and any Director so elected shall serve for such terms and under such
9
<PAGE> 10
conditions as are set forth in the resolution of the Board of Directors fixing
the terms of such class or series.
Section 3. No holder of shares of capital stock of the Corporation
shall, as such holder, have any right to purchase or subscribe for any shares
of the capital stock of the Corporation or any other security of the
Corporation which it may issue or sell (whether out of the number of shares
authorized by this Certificate of Incorporation, or out of any shares of the
capital stock of the Corporation hereafter authorized or acquired by it after
the issue thereof, or otherwise) other than such right, if any, as the Board of
Directors, in its discretion, may determine or as shall be stated in any
resolution of the Board of Directors fixing the terms of any class or series of
Preferred Stock.
Section 4. A Director of this Corporation shall not be personally
liable to the Corporation or its stockholders for monetary damages for breach
of fiduciary duty as a Director, except for liability (i) for any breach of the
Director's duty of loyalty to the Corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the
10
<PAGE> 11
Director derived any improper personal benefit. If the Delaware General
Corporation Law is amended after the date hereof to permit the further
elimination or limitation of the personal liability of directors, then the
liability of a Director of the Corporation shall be eliminated or limited to
the fullest extent permitted by the Delaware General Corporation Law, as so
amended.
Any repeal or modification of this Section 4 of Article V by the
stockholders of the Corporation shall not adversely affect any right or
protection of a Director of the Corporation in respect of any act or omission
occurring prior to the time of such repeal or modification.
Section 5. Each Director, officer and employee of this Corporation
shall be indemnified by the Corporation to the fullest extent permitted by the
Delaware General Corporation Law as now or hereafter in force.
Section 6. The Board of Directors of the Corporation may make, alter
or repeal from time to time any of the Bylaws of the Corporation except any
particular Bylaw which is specified in the Bylaws as not subject to amendment,
alteration or repeal except upon a vote of the stockholders of the Corporation.
11
<PAGE> 12
Section 7. The Board of Directors may authorize, subject to such
approval of stockholders and other conditions, if any, as may be required by
any applicable statute, rule or regulation, the execution and performance by
the Corporation of one or more agreements with any person, corporation,
association, company, trust, partnership (limited or general) or other
organization whereby, subject to the supervision and control of the Board of
Directors, any such other person, corporation, association, company, trust,
partnership (limited or general), or other organization shall render or make
available to the Corporation managerial, investment, advisory and/or related
services, office space and other services and facilities (including, if deemed
advisable by the Board of Directors, the management or supervision of the
investments of the Corporation) upon such terms and conditions as may be
provided in such agreement or agreements (including, if deemed fair and
equitable by the Board of Directors, the compensation payable thereunder by
the Corporation).
Section 8. The Board of Directors may authorize any agreement of the
character described in Section 7 of this Article V or other contract or
transaction with any one or more Directors or officers or between the
Corporation and any other corporation, partnership, association or other
organization in which one or more of the Corporation's Directors
12
<PAGE> 13
or officers are directors or officers, or similar parties, or otherwise have a
financial interest, and no such agreement, contract or transaction shall be
void or voidable solely by reason of the existence of any such relationship or
solely because the Director or officer so interested is present at or
participates in the meeting of the Board of Directors or committee thereof
which authorizes the agreement, contract or transaction, or solely because such
Director's votes are counted for such purpose if: (i) the material facts as to
the Director's or officer's relationship or interest and as to the agreement or
transaction are disclosed or are known to the Board of Directors or such
committee and the Board of Directors or committee in good faith authorizes the
agreements or transaction by the affirmative vote of a majority of the
disinterested Directors, even though the disinterested Directors be less than a
quorum; or (ii) the material facts as to such Director's or officer's
relationship or interest and as to the agreement or transaction are disclosed
or are known to the stockholders entitled to vote thereon, and the agreement,
contract or transaction is specifically approved in good faith by a majority of
votes cast by the stockholders entitled to vote other than the votes of shares
owned of record or beneficially by the interested Director or officer: or (iii)
the agreement, contract or transaction is fair to the Corporation as of the
time it is authorized, approved or ratified by the Board of Directors, a
committee thereof or
13
<PAGE> 14
the stockholders. Any Director of the Corporation who is also a director,
officer, stockholder or member of such other entity may be counted in
determining the existence of a quorum at any meeting of the Board of Directors
or of a committee which authorizes any such agreement, contract or
transaction. If such a Director votes at a meeting to approve or disapprove a
transaction as described in this Section 8, such vote shall not affect the
validity of such a transaction provided the provisions of this Section 8 are
otherwise satisfied.
Section 9. Any action required or permitted to be taken by the
stockholders of the Corporation must be effected at a duly called annual
meeting or special meeting of stockholders of the Corporation. No action may
be taken by the written consent of the stockholders. Action need not be by
written ballot unless the chairman of the meeting shall so direct.
Section 10. Special meetings of the stockholders of the Corporation
for any purpose or purposes may be called at any time by a majority of the
entire Board of Directors, by the Chairman of the Board or by the President.
Special meetings may not be called by any other person or persons. Each
special meeting shall be held at such date and time as
14
<PAGE> 15
is requested by the person or persons calling the meeting, within the limits
fixed by law.
Section 11. The enumeration and definition of particular powers of the
Board of Directors included in the foregoing shall in no way be limited or
restricted by reference to or inference from the terms of any other clause of
this or any other Article of the Certificate of Incorporation of the
Corporation, or construed as or deemed by inference or otherwise in any manner
to exclude or limit the powers conferred upon the Board of Directors under the
General Corporation Law of the State of Delaware as now or hereafter in force.
ARTICLE VI
RESTRICTION ON TRANSFER OF SHARES, ACQUISITION
RESTRICTION AND OFFER BY CERTAIN STOCKHOLDERS
Section 1. Whenever it is deemed by the Board of Directors to be
prudent in protecting the status of the Corporation as a "real estate
investment trust" under the Internal Revenue Code of 1986, as amended (the
"Code"), the Board of Directors may require to be filed with the Corporation as
a condition to permitting any proposed transfer, and/or the registration of any
transfer, of shares of capital stock of
15<PAGE> 16
the Corporation, a statement or affidavit from any proposed transferee setting
forth the number of shares already owned after application of the attribution
rules (the "Attribution Rules") of Section 544 of the Code by the transferee and
any related person(s) specified in the form prescribed by the Board of Directors
for that purpose. All contracts for the sale or other transfer of shares of the
Corporation shall be subject to this provision.
Section 2. As a condition to the transfer and/or registration of
transfer of any shares of capital stock of the Corporation which would result
in any stockholder owning, directly or indirectly, shares in excess of 9% of
the outstanding shares of capital stock of the Corporation, the proposed
transferee shall file with the Corporation an affidavit setting forth the
number of shares of capital stock of the Corporation owned directly and
indirectly (for purposes of this Section 2, shares of capital stock not owned
directly shall be deemed to be owned indirectly by a person if that person or
a group of which he is a member would be the beneficial owner of such shares
for purposes of Rule 13d-3, or any successor rule thereto, promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934
(the "Exchange Act"), and/or would be considered to own such shares by reason
of the Attribution Rules), by the person filing the affidavit. The affidavit
to be filed with the
16
<PAGE> 17
Corporation shall set forth all information required to be reported in returns
filed by stockholders under Regulation 1.857-9 issued by the Internal Revenue
Service, or similar provisions of any successor regulation, and in reports to
be filed under Section 13(d) of the Exchange Act. The affidavit, or an
amendment thereto, must be filed with the Corporation within 10 days after
demand therefor and in any event at least 15 days prior to any transfer,
registration of transfer or transaction which, if consummated, would cause the
filing person to hold shares in excess of 9% of the outstanding shares of
capital stock of the Corporation. No transfer nor any registration of any
purported transfer in violation of the notice provisions of this Section 2 of
Article VI shall be valid or be given effect. Notwithstanding the foregoing
compliance with the requirements of this Section 2 shall not validate any
purported transfers which would result in any stockholder owning, directly or
indirectly, shares in excess of the "Limit" as defined in Section 4 of this
Article VI.
Section 3. Any acquisition of shares of capital stock of the
Corporation that would result in any stockholder owning, directly or
indirectly, shares in excess of the "Limit" as defined in Section 4 of this
Article VI shall be void ab initio to the fullest extent permitted under
applicable law and the intended transferee of such "Excess Shares" as defined
in Section 4 of this Article VI, shall be deemed
17
<PAGE> 18
never to have had an interest therein. If the foregoing provision is determined
to be void, voidable or invalid by virtue of any legal decision, statute, rule
or regulation, then the transferee of such shares shall be deemed to have acted
as agent on behalf of the Corporation in acquiring such shares and to hold such
shares on behalf of the Corporation.
Section 4. Notwithstanding any other provision hereof to the contrary,
and subject to the provisions of Section 5 of this Article VI, no person, or
persons acting as a group, shall at any time directly or indirectly acquire
ownership in the aggregate of more than 9.8% of the outstanding shares of
capital stock of the Corporation (the "Limit"). Shares which would, but for this
Section 4, be owned by a person or a group of persons in excess of the Limit at
any time shall be deemed "Excess Shares." For the purposes of determining and
dealing with Excess Shares, the term "ownership" shall be defined to include
shares of capital stock constructively owned by a person under the Attribution
Rules and shall also include shares beneficially owned by a person for purposes
of Rule 13d-3, or any successor rule thereto, promulgated by the Securities and
Exchange Commission under the Exchange Act and the term "group" shall have the
same meaning as that term has for purposes of Section 13(d)(3) of such Exchange
Act. All shares of the Corporation which any person has the right to acquire
upon exercise of outstanding
18<PAGE> 19
rights, options and warrants, and upon conversion of any securities convertible
into shares, if any, shall be considered outstanding for purposes of the Limit
if such inclusion will cause such person to own more than the Limit. Unless
otherwise required by applicable law, the Corporation shall not register the
transfer of shares to the extent that, as a result of the transfer, any person
would hold Excess Shares.
Section 5. The Limit set forth in Sections 3 and 4 of this Article VI
and the filing requirements of Section 2 of this Article VI shall not apply to
the acquisition of shares of the Corporation by the Corporation, by an
underwriter in connection with a public offering of shares of the Corporation,
or in any transaction involving the issuance of shares by the Corporation, in
which the Board of Directors determines that the underwriter or other person or
party initially acquiring such shares will timely distribute such shares to or
among others such that, following such distribution, none of such shares will
be Excess Shares. The Board of Directors in its discretion may exempt from the
Limit under Sections 3 and 4 of this Article VI and from the filing
requirements of Section 2 of this Article VI ownership or transfers of certain
designated shares while owned by or transferred to any subsidiary of this
Corporation or to any other person in connection with a reorganization,
19
<PAGE> 20
recapitalization, merger, liquidation or similar transaction approved by the
Board of Directors, provided that such person has given the Board of Directors
evidence and assurances acceptable to the Board of Directors that the
qualification of the Corporation as a "real estate investment trust" under
the Code would not be jeopardized thereby.
Section 6. Notwithstanding Sections 3 and 4 of this Article VI, if at
any time more than 9.8% of the shares of capital stock of the Corporation has
become concentrated in the hands of a "beneficial owner" (as such term is
defined in Rule 13d-3, or any successor rule thereto, under the Exchange Act),
(i) such beneficial owner and each of his "affiliates" (as such term is
defined on December 1, 1986 in Rule 12b-2 under the Exchange Act) owning any
shares of capital stock of the Corporation shall be deemed to have offered to
sell to the Corporation or its designee on a date fixed by the Corporation as
specified in the Corporation's notice of its or its designee's acceptance of
such offer to sell, such a number of shares of capital stock sufficient, in the
opinion of the Board of Directors, to maintain or bring the direct or indirect
ownership of shares of capital stock of the Corporation of such beneficial
owner to no more than the Limit. The price at which the Corporation or its
designee may purchase the outstanding shares of capital stock of the
Corporation pursuant to the preceding sentence of this
20
<PAGE> 21
paragraph (the "Purchase Price") shall be equal to the closing sales price for
the shares, if then listed on a national securities exchange, or the average of
the closing sales prices for the shares if then listed on more than one national
securities exchange, or if the shares are not then listed on a national
securities exchange, the latest bid quotation for the shares if then traded
over-the-counter, on the last business day immediately preceding the day on
which notice of the Corporation's acceptance of the beneficial owner's and/or
his affiliates' offer of sale is sent, or, if no such closing sales prices or
quotations are available, then the Purchase Price shall be equal to the net
asset value of such stock (determined on the basis of the fair market value of
the assets of the Corporation) as determined in good faith by the Board of
Directors. The Purchase Price of any shares acquired by the Corporation or its
designee shall be paid, at the option of the Corporation, in cash or in the form
of an unsecured, subordinated promissory note of the Corporation or its designee
bearing interest and having a term to maturity (to be not less than five nor
more than twenty years) as shall be determined by the Board of Directors.
Payment of the Purchase Price shall be made at such time and in such manner as
may be determined by the Board of Directors and specified in the notice of
acceptance sent to the beneficial owner and/or his affiliates. From and after
the tender by the Corporation of the Purchase Price therefor
21
<PAGE> 22
on the date fixed for purchase by the Board of Directors, the holder of any
shares to be so purchased shall cease to be entitled to any rights as a holder
of such shares, excepting only the right to payment of the Purchase Price fixed
as aforesaid.
Section 7. Nothing contained in this Article VI or in any other
provision hereof shall limit the authority of the Board of Directors to take
such other action as it deems necessary or advisable to protect the Corporation
and the interests of its stockholders by preservation of the Corporation's
status as a "real estate investment trust" under the Code.
Section 8. For purposes of this Article VI only, the term "person"
shall include individuals, corporations, limited partnerships, general
partnerships, joint stock companies or associations, joint ventures,
associations, consortia, companies, trusts, banks, trust companies, land
trusts, common law trusts, business trusts, or other entities and governments
and agencies and political subdivisions thereof; provided, however, that such
term shall not include this Corporation or any of its subsidiaries.
Section 9. If any provision of this Article VI or any application of
any such provision is determined to be
22
<PAGE> 23
invalid by any federal or state court having jurisdiction over the issues, the
validity of the remaining provisions shall not be affected and other
applications of such provision shall be affected only to the extent necessary
to comply with the determination of such court.
ARTICLE VII
AMENDMENTS
The Corporation reserves the right to adopt, repeal, rescind, alter,
restate or amend in any respect any provision contained in this Certificate of
Incorporation in the manner now or hereafter prescribed by applicable law, and
all rights conferred on stockholders herein are granted subject to this
reservation. Notwithstanding the foregoing, the affirmative vote of the holders
of not less than 80% of the outstanding shares entitled to vote thereon shall
be required to repeal, rescind, alter or amend in any respect any of the
provisions contained in Section 2 of Article V, Section 4 of Article V, Section
9 of Article V, Section 10 of Article V, any provision contained in Article VI,
or any provision contained in this Article VII. Section 1 of Article V may be
repealed, rescinded, altered or amended as provided in such Section.
23
<PAGE> 24
ARTICLE VIII
INCORPORATOR
The name of the incorporator is Kathleen Heydon. The incorporator's
mailing address is 400 South Hope Street, Los Angeles, California 90071-2899.
IN WITNESS WHEREOF, the undersigned incorporator of American Health
Properties, Inc. hereby executes the foregoing Certificate of Incorporation and
acknowledges the same to be her act and further acknowledges that, to the best
of her knowledge, the matters and facts set forth therein are true in all
material respects under the penalties of perjury.
Dated this 16th day of December, 1986.
KATHLEEN HEYDON
------------------------------
Kathleen Heydon
24
<PAGE> 1
Draft of August 9, 1995
============================================================
AMERICAN HEALTH PROPERTIES, INC.
TO
______________________________
Trustee
__________
INDENTURE
Dated as of __________ __, 199_
__________
Senior Securities
============================================================
<PAGE> 2
American Health Properties, Inc.
Certain Sections of this Indenture relating to
Sections 310 through 318, inclusive, of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
<S> <C> <C>
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . 608
610
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . 613
(b) . . . . . . . . . . . . . . . . . . . . . . 613
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . 701
702
(b) . . . . . . . . . . . . . . . . . . . . . . 702
(c) . . . . . . . . . . . . . . . . . . . . . . 702
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . 703
(b) . . . . . . . . . . . . . . . . . . . . . . 703
(c) . . . . . . . . . . . . . . . . . . . . . . 703
(d) . . . . . . . . . . . . . . . . . . . . . . 703
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . 704
(a)(4) . . . . . . . . . . . . . . . . . . . . . . 101
1004
(b) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . 601
(b) . . . . . . . . . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . . . . . . . . . . . 513
Section 316(a) . . . . . . . . . . . . . . . . . . . . . . 101
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . 502
512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . . . . . . . . . . . 104
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . 107
</TABLE>
___________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
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PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
-----------
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Defeasable Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Original Issue Discount Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
</TABLE>
___________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
-i-
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Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Security Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Security Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
U.S. Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 102. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 103. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 104. Acts of Holders; Record Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 105. Notices, Etc., to Trustee and Company . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 107. Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 108. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 109. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 110. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 111. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 112. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 113. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE TWO
Security Forms
Section 201. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 202. Form of Face of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 203. Form of Reverse of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 204. Form of Legend for Global Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 205. Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
___________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
-ii-
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ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 303. Execution, Authentication, Delivery and Dating . . . . . . . . . . . . . . . . . . . . 27
Section 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 305. Registration, Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . 30
Section 306. Mutilated, Destroyed, Lost and Stolen Securities . . . . . . . . . . . . . . . . . . . 32
Section 307. Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . . . . . . . . . 33
Section 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 310. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . 35
Section 402. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE FIVE
Remedies
Section 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 502. Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . . . . 40
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . . . . . . 41
Section 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 505. Trustee May Enforce Claims Without Possession of Securities . . . . . . . . . . . . . 42
Section 506. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest . . . . . . 44
</TABLE>
___________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
-iii-
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Section 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 512. Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 514. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 515. Waiver of Usury, Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 602. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 603. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 604. Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . . . . . . . . 49
Section 605. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 606. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 607. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 608. Disqualification; Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 609. Corporate Trustee Required; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 610. Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . . . . 50
Section 611. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 612. Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . . 54
Section 613. Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . . 54
Section 614. Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and Addresses of Holders . . . . . . . . . . . . . . . . 56
Section 702. Preservation of Information; Communications to Holders . . . . . . . . . . . . . . . . . . 57
</TABLE>
___________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
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Section 703. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 704. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
Section 801. Company May Consolidate, Etc., Only on Certain Terms . . . . . . . . . . . . . . . . . . . . . 58
Section 802. Successor Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . 60
Section 902. Supplemental Indentures With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . 61
Section 903. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 904. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 906. Reference in Securities to Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 1003. Money for Securities Payments to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . 64
Section 1004. Statement by Officers as to Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 1005. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 1006. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 1007. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 1008. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 1009. Limitation on Incurrence of
</TABLE>
___________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
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<PAGE> 8
<TABLE>
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Obligations for Borrowed Money . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 1010. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 1102. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Section 1103. Selection by Trustee of Securities to Be Redeemed . . . . . . . . . . . . . . . . . . . . . . 73
Section 1104. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 1105. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 1106. Securities Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Section 1107. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
ARTICLE TWELVE
Sinking Funds
Section 1201. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 1202. Satisfaction of Sinking Fund Payments with Securities . . . . . . . . . . . . . . . . . . . . 76
Section 1203. Redemption of Securities for Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . 76
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
Section 1301. Company's Option to Effect Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . . . 77
Section 1302. Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 1303. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 1304. Conditions to Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . 78
Section 1305. Deposited Money and U.S. Government Obligations to be Held in Trust;
Other Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Section 1306. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
</TABLE>
___________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
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TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
</TABLE>
___________________
NOTE: This reconciliation and tie shall not, for any purpose, bedeemed to be
a part of the Indenture.
-vii-
<PAGE> 10
INDENTURE, dated as of __________ __, 199_, between American
Health Properties, Inc., a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company"), having its
principal office at 6400 South Fiddler's Green Circle, Suite 1800, Englewood,
Colorado 80111, and ____________________________, a corporation duly organized
and existing under the laws of __________, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture
provided.
All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
<PAGE> 11
(2) all other terms used herein which are defined in the
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted at the date of
such computation;
(4) the words "Article" and "Section" refer to an Article and
Section, respectively, of this Indenture; and
(5) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
Certain terms used principally in Articles Six, Ten and
Thirteen, are defined in those Articles.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that board.
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<PAGE> 12
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of
Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in that Place of Payment are authorized
or obligated by law or executive order to close.
"Commission" means the Securities and Exchange Commission,
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.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its President or a Vice President, and by its
Controller, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Corporate Trust Office" means the principal office of the
Trustee in __________, __________ at which at any particular time its corporate
trust business shall be administered.
"corporation" means a corporation, association, company,
joint-stock company or business trust.
"Covenant Defeasance" has the meaning specified in Section
1303.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Defeasable Series" has the meaning specified in Section 1301.
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<PAGE> 13
"Depositary" means, with respect to Securities of any series
issuable in whole or in part in the form of one or more Global Securities, a
clearing agency registered under the Exchange Act that is designated to act as
Depositary for such Securities as contemplated by Section 301.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any statute successor thereto.
"Global Security" means a Security that evidences all or part
of the Securities of any series and is authenticated and delivered to, and
registered in the name of, the Depositary for such Securities or a nominee
thereof.
"Holder" means a Person in whose name a Security is registered
in the Security Register.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument, and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities 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 instalment of interest on such
Security.
"Maturity", when used with respect to any Security, means the
date on which the principal of such Security or an instalment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind
specified in Section 501(4).
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<PAGE> 14
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice 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, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 1004 shall
be the principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company, and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.
"Outstanding", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(1) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(2) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Securities; provided that, if
such Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected
pursuant to Section 1302; and
(4) 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;
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<PAGE> 15
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, (A) the
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding shall be the amount of the principal thereof that would be due
and payable as of the date of such determination upon acceleration of the
Maturity thereof to such date pursuant to Section 502, (B) the principal amount
of a Security denominated in one or more foreign currencies or currency units
shall be the U.S. dollar equivalent, determined in the manner provided as
contemplated by Section 301 on the date of original issuance of such Security,
of the principal amount (or, in the case of an Original Issue Discount
Security, the U.S. dollar equivalent on the date of original issuance of such
Security of the amount determined as provided in Clause (A) above) of such
Security, and (C) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Securities
which the Trustee knows to be so owned shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of or any premium or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, limited liability company,
unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Securities
of any series, means the place or places where the principal of and any premium
and interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"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;
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<PAGE> 16
and, for the purposes of this definition, any Security authenticated and
delivered under Section 306 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Security shall be deemed to evidence the same debt as
the mutilated, destroyed, lost or stolen Security.
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee,
means the chairman or any vice-chairman of the board of directors, the chairman
or any vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any trust officer or assistant trust officer,
the controller or any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Securities" has the meaning stated in the first recital of
this Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or
any instalment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such instalment of principal or interest is due and payable.
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"Subsidiary" means, except as otherwise specified in Sections
1008 and 1009, a corporation 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. For the
purposes of this definition, "voting stock" means stock which ordinarily has
voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after
such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder,
and if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean each Trustee with respect to
Securities of that series.
"U.S. Government Obligations" has the meaning specified in
Section 1304.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee
to take any action under any provision of this Indenture, the Company shall
furnish to the Trustee such certificates and opinions as may be required under
the Trust Indenture Act. Each such certificate or opinion shall be given in
the form of an Officers' Certificate, if to be given by an officer of the
Company, or an Opinion of Counsel, if to be given by counsel, and shall comply
with the requirements of the Trust Indenture Act and any other requirements set
forth in this Indenture.
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<PAGE> 18
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
provided for in Section 1004) shall include
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company or any
subsidiary of the Company stating that the information with respect to such
factual matters is in the possession of the Company or any subsidiary of the
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<PAGE> 19
Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Section 104. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by 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 agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
601) conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security
Register.
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<PAGE> 20
Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
The Company may, in the circumstances permitted by the Trust
Indenture Act, set any day as the record date for the purpose of determining
the Holders of Outstanding Securities of any series entitled to give or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given or taken by Holders
of Securities of such series. With regard to any record date set pursuant to
this paragraph, the Holders of Outstanding Securities of the relevant series on
such record date (or their duly appointed agents), and only such Persons, shall
be entitled to give or take the relevant action, whether or not such Holders
remain Holders after such record date. With regard to any action that may be
given or taken hereunder only by Holders of a requisite principal amount of
Outstanding Securities of any series (or their duly appointed agents) and for
which a record date is set pursuant to this paragraph, the Company may, at its
option, set an expiration date after which no such action purported to be given
or taken by any Holder shall be effective hereunder unless given or taken on or
prior to such expiration date by Holders of the requisite principal amount of
Outstanding Securities of such series on such record date (or their duly
appointed agents). On or prior to any expiration date set pursuant to this
paragraph, the Company may, on one or more occasions at its option, extend such
date to any later date. Nothing in this paragraph shall prevent any Holder (or
any duly appointed agent thereof) from giving or taking, after any such
expiration date, any action identical to, or, at any time, contrary to or
different from, the action or purported action to which such expiration date
relates, in which event the Company may set a record date in respect thereof
pursuant to this paragraph. Nothing in this paragraph shall be construed to
render ineffective any action taken at any time by the Holders (or their duly
appointed agents) of the requisite principal amount of Outstanding Securities
of the relevant series on the date such action is so taken. Notwithstanding
the foregoing or the Trust Indenture Act, the Company shall not set a record
date for, and the provisions of this paragraph shall not apply with respect
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<PAGE> 21
to, any notice, declaration or direction referred to in the next paragraph.
Upon receipt by the Trustee from any Holder of Securities of a
particular series of (i) any notice of default or breach referred to in Section
501(4) or 501(5) with respect to Securities of such series, if such default or
breach has occurred and is continuing and the Trustee shall not have given such
notice to the Company, (ii) any declaration of acceleration referred to in
Section 502, if an Event of Default with respect to Securities of such series
has occurred and is continuing and the Trustee shall not have given such a
declaration to the Company, or (iii) any direction referred to in Section 512
with respect to Securities of such series, if the Trustee shall not have taken
the action specified in such direction, then a record date shall automatically
and without any action by the Company or the Trustee be set for determining the
Holders of Outstanding Securities of such series entitled to join in such
notice, declaration or direction, which record date shall be the close of
business on the tenth day following the day on which the Trustee receives such
notice, declaration or direction. Promptly after such receipt by the Trustee,
and in any case not later than the fifth day thereafter, the Trustee shall
notify the Company and the Holders of Outstanding Series of such series of any
such record date so fixed. The Holders of Outstanding Securities of such
series on such record date (or their duly appointed agents), and only such
Persons, shall be entitled to join in such notice, declaration or direction,
whether or not such Holders remain Holders after such record date; provided
that, unless such notice, declaration or direction shall have become effective
by virtue of Holders of the requisite principal amount of Outstanding
Securities of such series on such record date (or their duly appointed agents)
having joined therein on or prior to the 90th day after such record date, such
notice, declaration or direction shall automatically and without any action by
any Person be cancelled and of no further effect. Nothing in this paragraph
shall be construed to prevent a Holder (or a duly appointed agent thereof) from
giving, before or after the expiration of such 90-day period, a notice,
declaration or direction contrary to or different from, or, after the
expiration of such period, identical to, the notice, declaration or direction
to which such record date relates, in which event a new record date in respect
thereof shall be set pursuant to this paragraph. Nothing in this paragraph
shall be construed to render ineffective any notice, declaration or direction
of the type referred to in this paragraph given at any time to the Trustee and
the Company by Holders (or their duly appointed agents) of the requisite
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<PAGE> 22
principal amount of Outstanding Securities of the relevant series on the date
such notice, declaration or direction is so given.
Without limiting the foregoing, a Holder entitled hereunder to
give or take any action hereunder with regard to any particular Security may do
so with regard to all or any part of the principal amount of such Security or
by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any different part of such principal amount.
Section 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: .........................., or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this instrument
or at any other address previously furnished in writing to the Trustee
by the Company.
Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at his address as it appears in the
Security Register, not later than the latest date (if any), and not earlier
than the earliest date (if any), prescribed for the giving of such notice. In
any case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders.
Where this Indenture provides for notice in any manner, such notice may be
waived
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<PAGE> 23
in writing by the Person entitled to receive such notice, either before or
after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or to be excluded, as the
case may be.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
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<PAGE> 24
Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
Section 112. Governing Law.
This Indenture and the Securities shall be governed by and
construed in accordance with the law of the State of New York, but without
regard to principles of conflicts of laws.
Section 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities (other than a provision of the Securities of any series which
specifically states that such provision shall apply in lieu of this Section))
payment of interest or principal (and premium, if any) need not be made at such
Place of Payment on such date, but may be made on the next succeeding Business
Day at such Place of Payment with the same force and effect as if made on the
Interest Payment Date or Redemption Date, or at the Stated Maturity, provided
that no interest shall accrue for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.
ARTICLE TWO
Security Forms
Section 201. Forms Generally.
The Securities of each series shall be in substantially the
form set forth in this Article, or in such other form as shall be established
by or pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may,
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<PAGE> 25
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. If the form of Securities
of any series is established by action taken pursuant to a Board Resolution, a
copy of an appropriate record of such action shall be certified by the
Secretary or an Assistant Secretary of the Company and delivered to the Trustee
at or prior to the delivery of the Company Order contemplated by Section 303
for the authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Section 202. Form of Face of Security.
[Insert any legend required by the Internal Revenue Code and
the regulations thereunder.]
AMERICAN HEALTH PROPERTIES, INC.
............................................
No. ......... $ ........
American Health Properties, Inc., a corporation duly organized
and existing under the laws of Delaware (herein called the "Company", which
term includes any successor Person under the Indenture hereinafter referred
to), for value received, hereby promises to pay to
..............................................., or registered assigns, the
principal sum of .................. ................... Dollars on
............................ ........................... [if the Security is to
bear interest prior to Maturity, insert -- , and to pay interest thereon from
............. or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, semi- annually on ............ and
............ in each year, commencing ........., at the rate of ....% per
annum, until the principal hereof is paid or made available for payment [if
applicable, insert -- , and at the rate of ....% per annum on any overdue
principal and premium and on any overdue instalment of interest]. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the
close of
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<PAGE> 26
business on the Regular Record Date for such interest, which shall be the
....... or ....... (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture].
[If the Security is not to bear interest prior to Maturity,
insert -- The principal of this Security shall not bear interest except in the
case of a default in payment of principal upon acceleration, upon redemption or
at Stated Maturity and in such case the overdue principal of this Security
shall bear interest at the rate of ....% per annum which shall accrue from the
date of such default in payment to the date payment of such principal has been
made or duly provided for. Interest on any overdue principal shall be payable
on demand. Any such interest on any overdue principal that is not so paid on
demand shall bear interest at the rate of ......% per annum which shall accrue
from the date of such demand for payment to the date payment of such interest
has been made or duly provided for, and such interest shall also be payable on
demand.]
Payment of the principal of (and premium, if any) and [if
applicable, insert -- any such] interest on this Security will be made at the
office or agency of the Company maintained for that purpose in ............, in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts [if applicable, insert
-- ; provided, however, that at the option of the Company payment of interest
may be made by check mailed to the address of the Person entitled thereto as
such address shall appear in the Security Register].
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
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<PAGE> 27
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated:
AMERICAN HEALTH PROPERTIES, INC.
By..............................
Attest:
...........................
Section 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in
one or more series under an Indenture, dated as of __________ __, 199_ (herein
called the "Indenture"), between the Company and ................., as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof[if applicable, insert --, limited in aggregate
principal amount to $...........].
[If applicable, insert -- The Securities of this series are
subject to redemption upon not less than 30 days' notice by mail, [if
applicable, insert -- (1) on ........... in any year commencing with the year
...... and ending with the year ...... through operation of the sinking fund
for this series at a Redemption Price equal to 100% of the principal amount,
and (2)] at any time [if applicable, insert -- on or after .........., 19..],
as a whole or in part, at the election of the Company, at the following
Redemption Prices (expressed as percentages of the principal amount): If
redeemed [if applicable, insert -- on or before
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<PAGE> 28
..............., __%, and if redeemed] during the 12-month period beginning
............. of the years indicated,
<TABLE>
<CAPTION>
Redemption Redemption
Year Price Year Price
---- ---------- ---- ----------
<S> <C> <C> <S>
</TABLE>
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]
[If applicable, insert -- The Securities of this series are
subject to redemption upon not less than 30 days' notice by mail, (1) on
............ in any year commencing with the year .... and ending with the year
.... through operation of the sinking fund for this series at the Redemption
Prices for redemption through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below, and (2) at
any time [if applicable, insert -- on or after ............], as a whole or in
part, at the election of the Company, at the Redemption Prices for redemption
otherwise than through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below: If redeemed during the
12-month period beginning ............ of the years indicated,
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<PAGE> 29
<TABLE>
<CAPTION>
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
---- ----------------- ----------------------
<S> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert -- Notwithstanding the foregoing, the
Company may not, prior to ............., redeem any Securities of this series
as contemplated by [if applicable, insert -- Clause (2) of] the preceding
paragraph as a part of, or in anticipation of, any refunding operation by the
application, directly or indirectly, of moneys borrowed having an interest cost
to the Company (calculated in accordance with generally accepted financial
practice) of less than .....% per annum.]
[If applicable, insert -- The sinking fund for this series
provides for the redemption on ............ in each year beginning with the
year ....... and ending with the year ...... of [if applicable, insert -- not
less than $.......... ("mandatory sinking fund") and not more than] $.........
aggregate principal amount of Securities of this series. Securities of this
series acquired or redeemed by the Company otherwise than through [if
applicable, insert --mandatory] sinking fund payments may be credited against
subsequent [if applicable, insert -- mandatory] sinking fund
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<PAGE> 30
payments otherwise required to be made [if applicable, insert -- in the inverse
order in which they become due].]
[If the Security is subject to redemption of any kind, insert
-- In the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.]
[If applicable, insert -- The Indenture contains provisions
for defeasance at any time of (1) the entire indebtedness of this Security or
(2) certain restrictive covenants and Events of Default with respect to this
Security, in each case upon compliance with certain conditions set forth in the
Indenture.]
[If the Security is not an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this series
shall occur and be continuing, the principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture.]
[If the Security is an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this series
shall occur and be continuing, an amount of principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture. Such amount shall be equal to -- insert formula for
determining the amount. Upon payment (i) of the amount of principal so
declared due and payable and (ii) of interest on any overdue principal and
overdue interest all of the Company's obligations in respect of the payment of
the principal of and interest, if any, on the Securities of this series shall
terminate.]
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount
of the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
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<PAGE> 31
consent or waiver by the Holder of this Security shall be conclusive and
binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any
proceeding with respect to the Indenture or for the appointment of a receiver
or trustee or for any other remedy thereunder, unless such Holder shall have
previously given the Trustee written notice of a continuing Event of Default
with respect to the Securities of this series, the Holders of not less than 25%
in principal amount of the Securities of this series at the time Outstanding
shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the Trustee reasonable
indemnity and the Trustee shall not have received from the Holders of a
majority in principal amount of Securities of this series at the time
Outstanding a direction inconsistent with such request, and shall have failed
to institute any such proceeding, for 60 days after receipt of such notice,
request and offer of indemnity. The foregoing shall not apply to any suit
instituted by the Holder of this Security for the enforcement of any payment of
principal hereof or any premium or interest hereon on or after the respective
due dates expressed herein.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and any
premium and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registerable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the
principal of and any premium and interest on this Security are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
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<PAGE> 32
The Securities of this series are issuable only in registered
form without coupons in denominations of [$1,000] and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of like tenor of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
Section 204. Form of Legend for Global Securities.
Every Global Security authenticated and delivered hereunder
shall bear a legend in substantially the following form:
This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary
or a nominee thereof. This Security may not be transferred to, or
registered or exchanged for Securities registered in the name of, any
Person other than the Depositary or a nominee thereof and no such
transfer may be registered, except in the limited circumstances
described in the Indenture. Every Security authenticated and
delivered upon registration of transfer of, or in exchange for or in
lieu of, this Security shall be a Global Security subject to the
foregoing, except in such limited circumstances.
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<PAGE> 33
Section 205. Form of Trustee's Certificate of Authentication.
The Trustee's certificates 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.
..............................
As Trustee
By............................
Authorized Officer
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There
shall be established in or pursuant to a Board Resolution and, subject to
Section 303, set forth, or determined in the manner provided, in an Officers'
Certificate, or established in one or more indentures supplemental hereto,
prior to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other
series);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of the series pursuant to Section 304, 305,
306, 906 or 1107 and except for any Securities which, pursuant to
Section 303, are deemed never to have been authenticated and delivered
hereunder);
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<PAGE> 34
(3) the Person to whom any interest on a Security of the
series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest;
(4) the date or dates on which the principal of the
Securities of the series is payable;
(5) the rate or rates at which the Securities of the series
shall bear interest, if any, the date or dates from which such
interest shall accrue, the Interest Payment Dates on which any such
interest shall be payable and the Regular Record Date for any interest
payable on any Interest Payment Date;
(6) the place or places where the principal of and any
premium and interest on Securities of the series shall be payable;
(7) the period or periods within which, the price or prices
at which 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;
(8) the obligation, if any, of the Company to redeem or
purchase Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the
period or periods 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;
(9) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
(10) the currency, currencies or currency units in which
payment of the principal of and any premium and interest on any
Securities of the series shall be payable if other than the currency
of the United States of America and the manner of determining the
equivalent thereof in the currency of the United States of America for
purposes of the definition of "Outstanding" in Section 101;
(11) if the amount of payments of principal of or any premium
or interest on any Securities of the series may be determined with
reference to an index, the manner in which such amounts shall be
determined;
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<PAGE> 35
(12) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the
Company or a Holder thereof, in one or more currencies or currency
units other than that or those in which the Securities are stated to
be payable, the currency, currencies or currency units in which
payment of the principal of and any premium and interest on Securities
of such series as to which such election is made shall be payable, and
the periods within which and the terms and conditions upon which such
election is to be made;
(13) 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;
(14) the applicability, nonapplicability, or variation, of
Sections 1008 and 1009 with respect to the Securities of such series;
(15) if applicable, that the Securities of the series shall be
subject to either or both of Defeasance or Covenant Defeasance as
provided in Article Thirteen; provided that no series of Securities
that is convertible into Common Stock pursuant to Section 301(17) or
convertible into or exchangeable for any other securities pursuant to
Section 301(18) shall be subject to Defeasance pursuant to Section
1302;
(16) if and as applicable, that the Securities of the series
shall be issuable in whole or in part in the form of one or more
Global Securities and, in such case, the Depositary or Depositaries
for such Global Security or Global Securities and any circumstances
other than those set forth in Section 305 in which any such Global
Security may be transferred to, and registered and exchanged for
Securities registered in the name of, a Person other than the
Depositary for such Global Security or a nominee thereof and in which
any such transfer may be registered;
(17) the terms and conditions, if any, pursuant to which the
Securities are convertible into Common Stock of the Company;
(18) the terms and conditions, if any, pursuant to which the
Securities are convertible into or exchangeable for any other
securities; and
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<PAGE> 36
(19) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as
permitted by Section 901(5)).
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to the Board Resolution referred to above and (subject to Section
303) set forth, or determined in the manner provided, in the Officers'
Certificate referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
Section 302. Denominations.
The Securities of each series shall be issuable only in
registered form without coupons in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such specified denomination
with respect to the Securities of any series, the Securities of such series
shall be issuable in denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by
its Chairman of the Board, its Vice 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. The signature of any of
these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
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<PAGE> 37
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any Series
executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order shall authenticate and deliver
such Securities. If the form or terms of the Securities of the series have
been established in or pursuant to one or more Board Resolutions as permitted
by Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject to Section
601) shall be fully protected in relying upon, an Opinion of Counsel stating,
(1) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such
form has been established in conformity with the provisions of this
Indenture;
(2) if the terms of such Securities have been established by
or pursuant to Board Resolution as permitted by Section 301, that such
terms have been established in conformity with the provisions of this
Indenture; and
(3) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles.
If such form 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
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<PAGE> 38
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 authentication upon original
issuance of the first Security of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form
provided for herein executed by the Trustee by manual signature, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 309, for all purposes of this Indenture such Security shall
be deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities of any
series, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities
may determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company
will cause definitive Securities of that series to be prepared without
unreasonable delay. After the preparation of definitive Securities of such
series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary Securities
of such series at the office or agency of the Company in a Place of Payment for
that series, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities of any series the Company shall execute
and the Trustee shall authenticate and
-29-
<PAGE> 39
deliver in exchange therefor one or more definitive Securities of the same
series, of any authorized denominations and of a like aggregate principal
amount and tenor. Until so exchanged the temporary Securities of any series
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series and tenor.
Section 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and
in any other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Securities and of transfers of Securities. The
Trustee is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any 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 deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount and tenor.
At the option of the Holder, Securities of any series may be
exchanged for other Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor, upon
surrender of the Securities to be exchanged at such office or agency. Whenever
any Securities are so surrendered for exchange, the Company shall execute, and
the Trustee shall authenticate and deliver, the Securities which the Holder
making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer or
exchange.
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<PAGE> 40
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 304, 906 or 1107 not
involving any transfer.
The Company shall not be required (1) to issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of that series selected for redemption under Section
1103 and ending at the close of business on the day of such mailing, or (2) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part.
Notwithstanding any other provision in this Indenture, no
Global Security may be transferred to, or registered or exchanged for
Securities registered in the name of, any Person other than the Depositary for
such Global Security or any nominee thereof, and no such transfer may be
registered, unless (1) such Depositary (A) notifies the Company that it is
unwilling or unable to continue as Depositary for such Global Security or (B)
ceases to be a clearing agency registered under the Exchange Act, (2) the
Company executes and delivers to the Trustee a Company Order that such Global
Security shall be so transferable, registrable and exchangeable, and such
transfers shall be registrable, (3) there shall have occurred and be continuing
an Event of Default with respect to the Securities evidenced by such Global
Security or (4) there shall exist such other circumstances, if any, as have
been specified for this purpose as contemplated by Section 301.
Notwithstanding any other provision in this Indenture, a Global Security to
which the restriction set forth in the preceding sentence shall have ceased to
apply may be transferred only to, and may be registered and exchanged for
Securities registered only in the name or names of, such Person or Persons as
the Depositary for such Global Security shall have directed and
-31-
<PAGE> 41
no transfer thereof other than such a transfer may be registered.
Every Security authenticated and delivered upon registration
of transfer of, or in exchange for or in lieu of, a Global Security to which
the restriction set forth in the first sentence of the preceding paragraph
shall apply, whether pursuant to this Section, Section 304, 306, 906 or 1107 or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Security.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this
Section in exchange for any mutilated Security or in lieu of any destroyed,
lost or stolen Security shall constitute an original additional contractual
obligation of the Company, whether or not the mutilated, destroyed, lost
-32-
<PAGE> 42
or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301
with respect to any series of Securities, interest on any Security which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest.
Any interest on any Security of any series which is payable,
but is not punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company, at its election
in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security of such series and the
date of the proposed payment, and at the same time the Company shall
deposit with the Trustee 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
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Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Securities of such
series at his address as it appears in the Security Register, not less
than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record
Date therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Securities of such series (or
their respective Predecessor Securities) are registered at the close
of business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and any
premium and (subject to Section 307) any interest on such Security and for all
other purposes whatsoever, whether or not such Security be overdue, and neither
the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
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Section 309. Cancellation.
All Securities surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly cancelled by the Trustee. No
Securities shall be 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 held by the Trustee shall be disposed of
as directed by a Company Order.
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 (except as to any surviving rights of registration of transfer
or exchange of Securities herein expressly provided for), and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company
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and thereafter repaid to the Company or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to
the Trustee for cancellation, for principal and any premium and
interest to the date of such deposit (in the case of Securities which
have become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 607, the
obligations of the Trustee to any Authenticating Agent under Section 613 and,
if money shall have been deposited with the Trustee pursuant to subclause (B)
of Clause (1) of this Section, the obligations of the Trustee under Section 402
and the last paragraph of Section 1003 shall survive.
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Section 402. Application of Trust Money.
Subject to provisions of the last paragraph of Section 1003,
all money deposited with the Trustee pursuant to Section 401 shall be held in
trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium
and interest for whose payment such money has been deposited with the Trustee.
ARTICLE FIVE
Remedies
Section 501. Events of Default.
"Event of Default", wherever used herein with respect to
Securities of any series, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon any Security
of that series when it becomes due and payable, and continuance of
such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium,
if any, on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when
and as due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default the performance or breach of which is elsewhere in
this Section specifically dealt with or which has expressly been
included in this Indenture solely for the benefit of a 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
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Company and the Trustee by the Holders of at least 10% 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) a default under any bond, debenture, note or other
evidence of indebtedness for money borrowed by the Company (including
a default with respect to Securities of any series other than that
series) having an aggregate principal amount outstanding of at least
$5,000,000, or under any mortgage, indenture or instrument (including
this Indenture) under which there may be issued or by which there may
be secured or evidenced any indebtedness for money borrowed by the
Company having an aggregate principal amount outstanding of at least
$5,000,000, whether such indebtedness now exists or shall hereafter be
created, which default (A) shall constitute a failure to pay any
portion of the principal of such indebtedness when due and payable
after the expiration of any applicable grace period with respect
thereto or (B) shall have resulted in such indebtedness becoming or
being declared due and payable prior to the date on which it would
otherwise have become due and payable, without, in the case of Clause
(A), such indebtedness having been discharged or without, in the case
of Clause (B), such indebtedness having been discharged or such
acceleration having been rescinded or annulled, in each such case
within a period of 10 days after there shall have been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 10% in principal
amount of the Outstanding Securities of that series a written notice
specifying such default and requiring the Company to cause such
indebtedness to be discharged or cause such acceleration to be
rescinded or annulled, as the case may be, and stating that such
notice is a "Notice of Default" hereunder; provided, however, that,
subject to the provisions of Sections 601 and 602, the Trustee shall
not be deemed to have knowledge of such default unless either (A) a
Responsible Officer of the Trustee shall have actual knowledge of such
default or (B) the Trustee shall have received written notice thereof
from the Company, from any Holder, from the holder of any such
indebtedness or from the trustee under any such mortgage, indenture or
other instrument; or
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(6) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive
days; or
(7) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case
or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree or order for relief in respect
of the Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under
any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or other similar official of the Company or of any substantial part of
its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or the taking of corporate
action by the Company in furtherance of any such action; or
(8) any other Event of Default provided with respect to
Securities of that series.
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Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default
specified in Section 501(6) or 501(7)) 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. If an Event of
Default specified in Section 501(6) or 501(7) with respect to Securities of any
series at the time Outstanding occurs, the principal amount of all the
Securities of that series (or, if any Securities of that series are Original
Issue Discount Securities, such portion of the principal amount of such
Securities as may be specified by the terms thereof) shall automatically, and
without any declaration or other action on the part of the Trustee or any
Holder, 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 a majority in principal
amount of the Outstanding Securities of that series, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that
series,
(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than
by such declaration of acceleration and any interest thereon
at the rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel;
and
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(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of
that series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
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Section 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or
any other obligor upon the Securities), its property or its creditors, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding; provided, however, that the Trustee may, on behalf of the Holders,
vote for the election of a trustee in bankruptcy or similar official and be a
member of a creditors' or other similar committee.
Section 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
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Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
or any premium or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect
of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal and any
premium and interest, respectively.
Section 507. Limitation on Suits.
No Holder of any Security of any series shall have any right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the
Securities of that series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
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(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 to affect, disturb or prejudice the rights of any other of
such Holders, 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
and Interest.
Notwithstanding any other provision in this Indenture, the
Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and any premium and
(subject to Section 307) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, no
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right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time
to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
Section 512. Control by Holders.
The Holders of a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
Section 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of
the Outstanding Securities of any series may on behalf of the Holders of all
the Securities of such series waive any past default hereunder with respect to
such series and its consequences, except a default
(1) in the payment of the principal of or any premium or
interest on any Security of such series, or
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(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, a court may require any party litigant in
such suit to file an undertaking to pay the costs of such suit, and may assess
costs against any such party litigant, in the manner and to the extent provided
in the Trust Indenture Act; provided that neither this Section nor the Trust
Indenture Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the
Company.
Section 515. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any usury, stay or
extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
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ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing, no
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
Section 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of
any series, the Trustee shall give the Holders of Securities of such series
notice of such default as and to the extent provided by the Trust Indenture
Act; provided, however, that in the case of any default of the character
specified in Section 501(4) with respect to Securities of such series, no such
notice to Holders shall be given until at least 30 days after the occurrence
thereof. For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default with respect to Securities of such series.
Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(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 to be genuine and to have been signed
or presented by the proper party or parties;
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(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors shall 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, rely upon an Officers'
Certificate;
(4) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(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 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.
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Section 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. The
Trustee or any Authenticating Agent shall not 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, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
Section 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.
Section 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation 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
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agents and counsel), except any such expense, disbursement or advance
as may be attributable to its 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 of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
Section 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.
Section 609. Corporate Trustee Required; Eligibility.
There shall at all times be one or more Trustees hereunder
with respect to the Securities of each series, at least one of which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
Section 610. Resignation and Removal; Appointment of Successor.
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.
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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.
The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee
and to the Company.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been
a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public 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, (A) the Company by a Board Resolution may remove the
Trustee with respect to all securities, or (B) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
with respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those
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series (it being understood that any such successor Trustee may be appointed
with respect to the Securities of one or more or all of such series and that at
any time there shall be only one Trustee with respect to the Securities of any
particular series) and shall comply with the applicable requirements of Section
611. If, within one year after such resignation, removal or incapability, or
the occurrence of such vacancy, a successor Trustee with respect to the
Securities of any Series shall be appointed by Act of the Holders of a majority
in principal amount of the Outstanding Securities of such series delivered to
the Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 611, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with
respect to the Securities of any Series shall have been so appointed by the
Company or the Holders and accepted appointment in the manner required by
Section 611, any Holder who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
to all Holders of Securities of such series in the manner provided in Section
106. Each notice shall include the name of the successor Trustee with respect
to the Securities of such series and the address of its Corporate Trust Office.
Section 611. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Trustee
with respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the
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retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each successor Trustee
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities of that or those
series as to which the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) and (b) of this Section, as the case may be.
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No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
Section 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
Section 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection
of claims against the Company (or any such other obligor).
Section 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with
respect to one or more series of Securities which shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series issued upon
original issue and upon exchange, registration of transfer or partial
redemption thereof or pursuant to Section 306, and Securities so authenticated
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on
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behalf of the Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating
Agent shall cease to be eligible in accordance with the provisions of this
Section, such Authenticating Agent shall resign immediately in the manner and
with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating
Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at
any time terminate the agency of an Authenticating Agent by giving written
notice thereof to such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers
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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 Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section, and
the Trustee shall be entitled to be reimbursed for such payments, subject to
the provisions of Section 607.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
.............................
As Trustee
By...........................
As Authenticating Agent
By...........................
Authorized Officer
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the
Trustee
(1) semi-annually, not more than 15 days after each Regular
Record Date, a list for each series of Securities, in such form as the
Trustee may reasonably require, of the names and addresses
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of the Holders of Securities of such series as of the 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 preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 701 and the
names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it as
provided in Section 701 upon receipt of a new list so furnished.
The rights of the Holders to communicate with other Holders
with respect to their rights under this Indenture or under the Securities, and
the corresponding rights and privileges of the Trustee, shall be as provided by
the Trust Indenture Act.
Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to names and addresses of Holders made
pursuant to the Trust Indenture Act.
Section 703. Reports by Trustee.
The Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant
thereto.
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
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notify the Trustee when any Securities are listed on any stock exchange.
Section 704. Reports by Company.
The Company shall file with the Trustee and the Commission,
and transmit to Holders, such information, documents and other reports, and
such summaries thereof, as may be required pursuant to the Trust Indenture Act
at the times and in the manner provided pursuant to such Act; provided that any
such information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 days after the same is so required to be filed
with the Commission.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
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, 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 any premium and interest on all the Securities
and the performance or observance of every covenant of this Indenture
on the part of the Company to be performed or observed;
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(2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company
or any Subsidiary as a result of such transaction as having been
incurred by the Company or such Subsidiary at the time of such
transaction, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have
happened and be continuing;
(3) if, as a result of any such consolidation or merger or
such conveyance, transfer or lease, properties or assets of the
Company would become subject to a mortgage, pledge, lien, security
interest or other encumbrance which would not be permitted by this
Indenture, the Company or such successor Person, as the case may be,
shall take such steps as shall be necessary effectively to secure the
Securities equally and ratably with (or prior to) all indebtedness
secured thereby; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, 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.
Section 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except
in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.
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ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants
are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for
the benefit of such series) or to surrender any right or power herein
conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate
the issuance of Securities in bearer form, registrable or not
registrable as to principal, and with or without interest coupons, or
to permit or facilitate the issuance of Securities in uncertificated
form; or
(5) to add to, change or eliminate any of the provisions of
this Indenture in respect of one or more series of Securities,
provided that any such addition, change or elimination (A) shall
neither (i) apply to any Security of any series created prior to the
execution of such supplemental indenture and entitled to the benefit
of such provision nor (ii) modify the rights of the Holder of any such
Security with respect to such provision or (B) shall become effective
only when there is no such Security Outstanding; or
(6) to secure the Securities pursuant to the requirements of
Article Ten or otherwise; or
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(7) to establish the form or terms of Securities of any
series as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 611; or
(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 that such
action pursuant to this clause (9) shall not adversely affect the
interests of the Holders of Securities of any series in any material
respect.
Section 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee
may enter into an indenture or indentures supplemental hereto for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
instalment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any
premium payable upon the redemption thereof, or reduce the amount of
the principal of an Original Issue Discount Security that would be due
and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502, or change any Place of Payment where, or the
coin or currency in which, any Security or any premium or interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such
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payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513
or Section 1010, 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 1010, or the deletion of this proviso, in
accordance with the requirements of Sections 611 and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture
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which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act.
Section 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company
shall so determine, new Securities of any series so modified as to conform, in
the opinion of the Trustee and the Company, to any such supplemental indenture
may be prepared and executed by the Company and authenticated and delivered by
the Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the principal of and
any premium and interest on the Securities of that series in accordance with
the terms of the Securities and this Indenture.
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Section 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any
series of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served. The Company will give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more
other offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each Place of Payment for Securities of any
series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.
Section 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent
with respect to any series of Securities, it will, on or before each due date
of the principal of or any premium or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium and interest so
becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for
any series of Securities, it will, prior to each due date of the principal of
or any premium or interest on any Securities of that series, deposit with a
Paying Agent a
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sum sufficient to pay such amount, such sum to be held as provided by the Trust
Indenture Act, 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) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and
(2) during the continuance of any default by the Company (or any other obligor
upon the Securities of that series) in the making of any payment in respect of
the Securities of that series, and upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of or any
premium or interest on any Security of any series and remaining unclaimed for
two years after such principal, premium or interest has 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
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 a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the
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date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
Section 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard
to any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
Section 1005. 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
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the
loss thereof is not disadvantageous in any material respect to the Holders.
Section 1006. Maintenance of Properties.
The Company will cause all properties used or useful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
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Section 1007. 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 1008. Limitation on Liens.
Subject to Section 301(14), the Company will not pledge or
otherwise subject to any lien, any of its or its Subsidiaries' property or
assets unless the Securities of each series to which this covenant is made
applicable are secured by such pledge or lien equally and ratably with all
other obligations secured thereby so long as such other 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 of the Company and its consolidated
Subsidiaries 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;
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(3) 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;
(4) 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;
(5) 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;
(6) 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;
(7) 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;
(8) Liens relating to secured indebtedness of the Company
outstanding on June 30, 1995; and
(9) 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 (8) inclusive, of
this Section 1008, 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).
As used in this Section 1008:
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"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; and
"Subsidiary" means an affiliate controlled by the Company
directly, or indirectly through one or more intermediaries.
Section 1009. Limitation on Incurrence of Obligations for Borrowed Money.
Subject to Section 301(14), the Company will not create,
assume, incur or otherwise become liable in respect of, any
(1) 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 affect thereto and
to any concurrent transactions exceed the greater of (i) 150% of
Capital Base, or (ii) 225% of Tangible Net Worth; and
(2) 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 affect thereto and to any concurrent transactions, exceed 225%
of Capital Base.
For any period during which the Company shall have a
Subsidiary or Subsidiaries, the limitations contained in this subsection (b)
shall be applied to the consolidated financial statements of the Company and
its Subsidiaries.
As used in this Section 1009:
"Capital Base" means, at any date, the sum of Tangible Net
Worth and Subordinated Debt;
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"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;
"Debt" when used 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 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);
"Liabilities" means, at any date, the items shown as
liabilities on the balance sheet of the Company, except any item of deferred
income, including capital gains;
"Lien" means any interest in Property securing an obligation
owned to, or a claim by, a Person other than the owner of the Property, whether
such interest is based on 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;
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"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 therefor;
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible;
"Senior Debt" means all Debt other than Non-Recourse Debt and
Subordinated Debt;
"Subordinated Debt" means any 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 an affiliate controlled by the Company
directly, or indirectly through one or more intermediaries;
"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; and
"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.
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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 1006 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.
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article.
Securities of any series which are redeemable before their
Stated Maturity shall be redeemable in accordance with their terms and (except
as otherwise specified as contemplated by Section 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 a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities of any series, the Company shall,
at least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of
such Redemption Date, of the principal amount of Securities of such series to
be redeemed and, if applicable, of the tenor of the Securities to be redeemed.
In the case of any redemption of Securities 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.
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Section 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be
redeemed (unless all of the Securities of such series and of a specified tenor
are to be redeemed), the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions (equal to the minimum
authorized denomination for Securities of that series or any integral multiple
thereof) of the principal amount of Securities of such series of a denomination
larger than the minimum authorized denomination for Securities of that series.
If less than all of the Securities of such series and 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 and specified tenor not previously called
for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of
the Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
Section 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at his address
appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
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(3) if less than all the Outstanding Securities of any series
are to be redeemed, the identification (and, in the case of partial
redemption of any Securities, the principal amounts) of the particular
Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after
said date,
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the
case.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company and shall
be irrevocable.
Section 1105. Deposit of Redemption Price.
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, all the
Securities which are to be redeemed on that date.
Section 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender
of any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; provided, however, that, unless
otherwise specified as contemplated by Section 301, installments of interest
whose
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Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered
as such at the close of business on the relevant Record Dates according to
their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and any premium shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
Section 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver 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.
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
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any series as provided for by the terms of Securities of such series.
Section 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series
(other than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series; provided that such Securities have not been previously so credited.
Such Securities shall be received and credited for such purpose by the Trustee
at the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.
Section 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date
for any series of Securities, the Company will deliver to the Trustee an
Officers' Certificate specifying the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting
Securities of that series pursuant to Section 1202 and will also deliver to the
Trustee any Securities to be so delivered. Not less than 30 days before each
such sinking fund payment date the Trustee shall select the Securities to be
redeemed upon such sinking fund payment date in the manner specified in Section
1103 and cause notice of the redemption thereof to be given in the name of and
at the expense of the Company in the manner provided in Section 1104. Such
notice having been duly given, the redemption of such Securities shall be made
upon the terms and in the manner stated in Sections 1106 and 1107.
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ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
Section 1301. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may elect, at its option by Board Resolution at
any time, to have either Section 1302 or Section 1303 applied to the
Outstanding Securities of any series designated pursuant to Section 301 as
being defeasible pursuant to this Article Thirteen (hereinafter called a
"Defeasible Series"), upon compliance with the conditions set forth below in
this Article Thirteen provided that Section 1302 shall not apply to any series
of Securities that is convertible into Common Stock pursuant to Section 301(17)
or convertible into or exchangeable for any other securities pursuant to
Section 301(18).
Section 1302. Defeasance and Discharge.
Upon the Company's exercise of the option provided in Section
1301 to have this Section 1302 applied to the Outstanding Securities of any
Defeasible Series and subject to the proviso to Section 1301, the Company shall
be deemed to have been discharged from its obligations with respect to the
Outstanding Securities of such series as provided in this Section on and after
the date the conditions set forth in Section 1304 are satisfied (hereinafter
called "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 to have satisfied all its
other obligations under the Securities of such series and this Indenture
insofar as the Securities of such series are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), subject to the following which shall survive until otherwise terminated
or discharged hereunder: (1) the rights of Holders of Securities of such
series to receive, solely from the trust fund described in Section 1304 and as
more fully set forth in such Section, payments in respect of the principal of
and any premium and interest on such Securities of such series when payments
are due, (2) the Company's obligations with respect to the Securities of such
series under Sections 304, 305, 306, 1002 and 1003, (3) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and (4) this Article
Thirteen. Subject to compliance with this Article Thirteen, the Company may
exercise its option provided in Section 1301 to have this
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Section 1302 applied to the Outstanding Securities of any Defeasible Series
notwithstanding the prior exercise of its option provided in Section 1301 to
have Section 1303 applied to the Outstanding Securities of such series.
Section 1303. Covenant Defeasance.
Upon the Company's exercise of the option provided in Section
1301 to have this Section 1303 applied to the Outstanding Securities of any
Defeasible Series, (1) the Company shall be released from its obligations under
Sections 1006 through 1009, inclusive, and Section 801(3), and any covenants
provided pursuant to Section 301(19), 901(2) or 901(7) for the benefit of the
Holders of such Securities and (2) the occurrence of any event specified in
Sections 501(3), 501(4) (with respect to any of Sections 1006 through 1009,
inclusive, and any such covenant provided pursuant to Section 301(19), 901(2)
or 901(7) and Section 801(3), 501(5) and 501(8) shall be deemed not to be or
result in an Event of Default, in each case with respect to the Outstanding
Securities of such series as provided in this Section on and after the date the
conditions set forth in Section 1304 are satisfied (hereinafter called
"Covenant Defeasance"). For this purpose, such Covenant Defeasance means that
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 specified Section (to
the extent so specified in the case of Section 501(4)), whether directly 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 the Securities
of such series shall be unaffected thereby.
Section 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either
Section 1302 or Section 1303 to the Outstanding Securities of any Defeasible
Series:
(1) The Company shall irrevocably have deposited or caused
to be deposited with the Trustee (or another trustee that satisfies
the requirements contemplated by Section 609 and agrees 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
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Outstanding Securities of such series, (A) money in an amount, or (B)
U.S. Government Obligations that through the scheduled payment of
principal and interest in respect thereof in accordance with their
terms will provide, not later than one day before the due date of any
payment, money in an amount, or (C) a combination thereof, in each
case sufficient, 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 any such other qualifying trustee)
to pay and discharge, the principal of and any premium and interest on
the Securities of such series on the respective Stated Maturities, in
accordance with the terms of this Indenture and the Securities of such
series. As used herein, "U.S. Government Obligation" means (x) any
security that is (i) a direct obligation of the United States of
America for the payment of which full faith and credit of the United
States of America is pledged or (ii) an obligation of a Person
controlled or supervised by and acting as an agency or instrumentality
of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by
the United States of America, which, in either case (i) or (ii), is
not callable or redeemable at the option of the issuer thereof, and
(y) any depositary receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act of 1933, as amended) as custodian with
respect to any U.S. Government Obligation specified in Clause (x) and
held by such custodian for the account of the holder of such
depositary receipt, or with respect to any specific payment of
principal of or interest on any such U.S. Government Obligation,
provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder
of such depositary receipt from any amount received by the custodian
in respect of the U.S. Government Obligation or the specific payment
of principal or interest evidenced by such depositary receipt.
(2) 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 first set forth hereinabove, there has been a change in the
applicable Federal income tax law, in either case (A) or (B) to the
effect that, and based
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thereon such opinion shall confirm that, the Holders of the
Outstanding Securities of such series will not recognize gain or loss
for Federal income tax purposes as a result of the deposit, Defeasance
and discharge to be effected with respect to the Securities of such
series and will be subject to Federal income tax on the same amount,
in the same manner and at the same times as would be the case if such
deposit, Defeasance and discharge were not to occur.
(3) 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 gain or loss for Federal income tax purposes
as a result of the deposit and Covenant Defeasance to be effected with
respect to the Securities of such series and will be subject to
Federal income tax on the same amount, in the same manner and at the
same times as would be the case if such deposit and Covenant
Defeasance were not to occur.
(4) The Company shall have delivered to the Trustee an
Officer's Certificate to the effect that the Securities of such
series, if then listed on any securities exchange, will not be
delisted as a result of such deposit.
(5) No Event of Default or event that (after notice or lapse
of time or both) would become an Event of Default shall have occurred
and be continuing at the time of such deposit or, with regard to any
Event of Default or any such event specified in Sections 501(6) and
(7), at any time on or prior to the 90th day after the date of such
deposit (it being understood that this condition shall not be deemed
satisfied until after such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause
the Trustee to have a conflicting interest within the meaning of the
Trust Indenture Act (assuming all Securities are in default within the
meaning of such Act).
(7) Such Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under, any other
agreement or instrument to which the Company is a party or by which it
is bound.
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(8) The Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent with respect to such Defeasance or Covenant
Defeasance have been complied with.
(9) Such Defeasance or Covenant Defeasance shall not result
in the trust arising from such deposit constituting an investment
company within the meaning of the Investment Company Act of 1940, as
amended, unless such trust shall be qualified under such Act or exempt
from regulation thereunder.
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 (solely for
purposes of this Section and Section 1306, the Trustee and any such other
trustee are referred to collectively as the "Trustee") pursuant to Section 1304
in respect of the Securities of any Defeasible Series shall be held in trust
and applied by the Trustee, in accordance with the provisions of the Securities
of such series and this Indenture, to the payment, either directly or through
any such Paying Agent (including the Company acting as its own Paying Agent) as
the Trustee may determine, to the Holders of Securities of such series, of all
sums due and to become due thereon in respect of principal and any premium and
interest, but money so held in trust 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 U.S. Government
Obligations deposited pursuant to Section 1304 or the principal and interest
received in respect thereof other than any such tax, fee or other charge that
by law is for the account of the Holders of Outstanding Securities.
Anything in this Article Thirteen 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 with respect to Securities of any Defeasible Series
that, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written
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<PAGE> 91
certification thereof delivered to the Trustee, are in excess of the amount
thereof that would then be required to be deposited to effect an equivalent
Defeasance or Covenant Defeasance with respect to the Securities of such
series.
Section 1306. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any
money in accordance with this Article Thirteen with respect to the Securities
of any series by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application,
then the Company's obligations under this Indenture and the Securities of such
series shall be revived and reinstated as though no deposit had occurred
pursuant to this Article Thirteen with respect to Securities of such series
until such time as the Trustee or Paying Agent is permitted to apply all money
held in trust pursuant to Section 1305 with respect to Securities of such
series in accordance with this Article Thirteen; provided, however, that if the
Company makes any payment of principal of or any premium or interest on any
Security of such series following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of Securities of
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<PAGE> 92
such series to receive such payment from the money so held in trust.
__________________
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.
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.
AMERICAN HEALTH PROPERTIES, INC.
By
------------------------------
Attest:
------------------------ --------------------------------
By
------------------------------
Attest:
------------------------
-83-
<PAGE> 93
STATE OF COLORADO )
) ss.:
COUNTY OF ARAPAHOE )
On the ____ day of __________, 199_, before me personally came
___________________________, to me known, who, being by me duly sworn, did
depose and say that he is ____________________ of American Health Properties,
Inc., one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation, and that he signed his name
thereto by like authority.
------------------------
STATE OF ________ )
) ss.:
COUNTY OF ________ )
On the ____ day of __________, 199_, before me personally came
___________________________, to me known, who, being by me duly sworn, did
depose and say that he is ____________________ of
_________________________________, one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
------------------------
-84-
<PAGE> 1
Draft of August 9, 1995
============================================================
AMERICAN HEALTH PROPERTIES, INC.
TO
______________________________
Trustee
__________
INDENTURE
Dated as of __________ __, 199_
__________
Subordinated Securities
============================================================
<PAGE> 2
American Health Properties, Inc.
Certain Sections of this Indenture relating to
Sections 310 through 318, inclusive, of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
<S> <C>
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . 608
610
Section 311(a) . . . . . . . . . . . . . . . . . . . . . 613
(b) . . . . . . . . . . . . . . . . . . . . . 613
Section 312(a) . . . . . . . . . . . . . . . . . . . . . 701
702
(b) . . . . . . . . . . . . . . . . . . . . . 702
(c) . . . . . . . . . . . . . . . . . . . . . 702
Section 313(a) . . . . . . . . . . . . . . . . . . . . . 703
(b) . . . . . . . . . . . . . . . . . . . . . 703
(c) . . . . . . . . . . . . . . . . . . . . . 703
(d) . . . . . . . . . . . . . . . . . . . . . 703
Section 314(a) . . . . . . . . . . . . . . . . . . . . . 704
(a)(4) . . . . . . . . . . . . . . . . . . . . . 101
1004
(b) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . . . . . . 601
(b) . . . . . . . . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . . . . . . . . . . 513
Section 316(a) . . . . . . . . . . . . . . . . . . . . . 101
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . 502
512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . . . . . . . . . . 104
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . . . . . . . . 107
</TABLE>
___________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Defeasable Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Original Issue Discount Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
</TABLE>
___________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
-i-
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Security Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Security Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
U.S. Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 102. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 103. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 104. Acts of Holders; Record Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 105. Notices, Etc., to Trustee and Company . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 107. Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 108. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . 15
Section 109. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 110. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 111. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 112. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 113. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE TWO
Security Forms
Section 201. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 202. Form of Face of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 203. Form of Reverse of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 204. Form of Legend for Global Securities . . . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>
___________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
-ii-
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 205. Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . . . . . . . 27
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 303. Execution, Authentication, Delivery and Dating . . . . . . . . . . . . . . . . . . . . 31
Section 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 305. Registration, Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . . 34
Section 306. Mutilated, Destroyed, Lost and Stolen Securities . . . . . . . . . . . . . . . . . . . 36
Section 307. Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . . . . . . . . . 37
Section 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 310. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 402. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE FIVE
Remedies
Section 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 502. Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . . . . 44
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . . . . . . . 45
Section 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 505. Trustee May Enforce Claims Without Possession of Securities . . . . . . . . . . . . . . 46
Section 506. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
</TABLE>
___________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
-iii-
<PAGE> 6
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest and to Convert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 512. Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 514. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 515. Waiver of Usury, Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 602. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 603. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 604. Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . . . . . . 53
Section 605. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 606. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 607. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 608. Disqualification; Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 609. Corporate Trustee Required; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 610. Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . . . 54
Section 611. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 612. Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . 58
Section 613. Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . 58
Section 614. Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 58
</TABLE>
___________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
-iv-
<PAGE> 7
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and Addresses of Holders . . . . . . . . . . . . . . . 60
Section 702. Preservation of Information; Communications to Holders . . . . . . . . . . . . . . . . 61
Section 703. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 704. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
Section 801. Company May Consolidate, Etc., Only on Certain Terms . . . . . . . . . . . . . . . . . 62
Section 802. Successor Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Holders . . . . . . . . . . . . . . . . . . 64
Section 902. Supplemental Indentures with Consent of Holders . . . . . . . . . . . . . . . . . . . . 65
Section 903. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 904. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 906. Reference in Securities to Supplemental Indentures . . . . . . . . . . . . . . . . . . 67
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest . . . . . . . . . . . . . . . . . . . . . . 68
Section 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 1003. Money for Securities Payments to Be Held in Trust . . . . . . . . . . . . . . . . . . 68
</TABLE>
___________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
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<PAGE> 8
<TABLE>
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Section 1004. Statement by Officers as to Default . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 1005. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 1006. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 1007. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 1008. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 1009. Limitation on Incurrence of Obligations for Borrowed Money . . . . . . . . . . . . . . 73
Section 1010. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 1102. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 1103. Selection by Trustee of Securities to Be Redeemed . . . . . . . . . . . . . . . . . . 77
Section 1104. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 1105. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 1106. Securities Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 1107. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
ARTICLE TWELVE
Sinking Funds
Section 1201. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 1202. Satisfaction of Sinking Fund Payments with Securities . . . . . . . . . . . . . . . . 80
Section 1203. Redemption of Securities for Sinking Fund . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
Section 1301. Company's Option to Effect Defeasance or Covenant Defeasance . . . . . . . . . . . . 81
Section 1302. Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 1303. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 1304. Conditions to Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . . . . . 83
</TABLE>
___________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
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<PAGE> 9
<TABLE>
<CAPTION>
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<S> <C>
Section 1305. Deposited Money and U.S. Government Obligations to be Held in Trust;
Other Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 1306. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
ARTICLE FOURTEEN
Conversion of Securities
Section 1401. Applicability; Conversion Privilege and Conversion Price . . . . . . . . . . . . . . . 87
Section 1402. Exercise of Conversion Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 1403. Fractions of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 1404. Adjustment of Conversion Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 1405. Notice of Adjustments of Conversion Price . . . . . . . . . . . . . . . . . . . . . . 93
Section 1406. Notice of Certain Corporate Action . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Section 1407. Company to Reserve Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Section 1408. Taxes on Conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Section 1409. Covenant as to Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Section 1410. Cancellation of Converted Securities . . . . . . . . . . . . . . . . . . . . . . . . . 96
Section 1411. Provisions in Case of Consolidation, Merger or Sale of Assets . . . . . . . . . . . . 96
Section 1412. Responsibility of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
ARTICLE FIFTEEN
Subordination of Securities
Section 1501. Securities Subordinate to Senior Indebtedness . . . . . . . . . . . . . . . . . . . . 97
Section 1502. Payment Over of Proceeds Upon Dissolution, Etc. . . . . . . . . . . . . . . . . . . . 98
Section 1503. Prior Payment to Senior Indebtedness Upon Acceleration of Securities . . . . . . . . . 99
Section 1504. No Payment When Senior Indebtedness in Default . . . . . . . . . . . . . . . . . . . . 100
Section 1505. Payment Permitted If No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Section 1506. Subrogation to Rights of Holders of Senior Indebtedness . . . . . . . . . . . . . . . 101
Section 1507. Provisions Solely to Define Relative Rights . . . . . . . . . . . . . . . . . . . . . 102
Section 1508. Trustee to Effectuate Subordination . . . . . . . . . . . . . . . . . . . . . . . . . 102
</TABLE>
___________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
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<PAGE> 10
<TABLE>
<CAPTION>
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<S> <C>
Section 1509. No Waiver of Subordination Provisions . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 1510. Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Section 1511. Reliance on Judicial Order or Certificate of Liquidating Agent . . . . . . . . . . . . 104
Section 1512. Trustee Not Fiduciary for Holders of Senior Indebtedness . . . . . . . . . . . . . . . 104
Section 1513. Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustee's Rights . 105
Section 1514. Article Applicable to Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . 105
Section 1515. Certain Conversions Deemed Payment . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Section 1516. Trust Moneys Not Subordinated . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
SIGNATURES AND SEALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
</TABLE>
___________________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
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<PAGE> 11
INDENTURE, dated as of __________ __, 199_, between American
Health Properties, Inc., a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company"), having its
principal office at 6400 South Fiddler's Green Circle, Suite 1800, Englewood,
Colorado 80111, and ____________________________, a _______________ duly
organized and existing under the laws of __________, as Trustee (herein called
the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture
provided.
All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof, as
follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
<PAGE> 12
(2) all other terms used herein which are defined in the
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted at the date of
such computation;
(4) the words "Article" and "Section" refer to an Article and
Section, respectively, of this Indenture; and
(5) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
Certain terms used principally in Articles Six, Ten and
Fourteen, are defined in those Articles.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the
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<PAGE> 13
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, means each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in that Place of Payment are authorized
or obligated by law or executive order to close.
"Commission" means the Securities and Exchange Commission,
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.
"Common Stock" includes any stock of any class of the Company
which has no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding-up of
the Company and which is not subject to redemption by the Company. However,
subject to the provisions of Section 301(17) and (18) and Section 1411, shares
issuable on conversion of Securities shall include only shares of the class
designated as Common Stock of the Company at the date of this instrument or
shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Company and which are not subject to
redemption by the Company; provided that if at any time there shall be more
than one such resulting class, the shares of each such class then so issuable
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its President or a Vice President, and by its
Controller,
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<PAGE> 14
its Secretary or an Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the
Trustee in ................................. .............................. at
which at any particular time its corporate trust business shall be
administered.
"corporation" means a corporation, association, company,
joint-stock company or business trust.
"Covenant Defeasance" has the meaning specified in Section
1303.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Defeasable Series" has the meaning specified in Section 1301.
"Depositary" means, with respect to Securities of any series
issuable in whole or in part in the form of one or more Global Securities, a
clearing agency registered under the Exchange Act that is designated to act as
Depositary for such Securities as contemplated by Section 301.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any statute successor thereto.
"Global Security" means a Security that evidences all or part
of the Securities of any series and is authenticated and delivered to, and
registered in the name of, the Depositary for such Securities or a nominee
thereof.
"Holder" means a Person in whose name a Security is registered
in the Security Register.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument, and any such supplemental
indenture, the provisions of the Trust
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<PAGE> 15
Indenture Act that are deemed to be a part of and govern this instrument and
any such supplemental indenture, respectively. The term "Indenture" shall also
include the terms of particular series of Securities 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 instalment of interest on such
Security.
"Maturity", when used with respect to any Security, means the
date on which the principal of such Security or an instalment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind
specified in Section 501(4).
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice 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, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 1004 shall
be the principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company, and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.
"Outstanding", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(1) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
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<PAGE> 16
(2) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Securities; provided that,
if such Securities are to be redeemed, notice of such redemption has
been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected
pursuant to Section 1302; and
(4) 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, (A) the
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding shall be the amount of the principal thereof that would be due
and payable as of the date of such determination upon acceleration of the
Maturity thereof to such date pursuant to Section 502, (B) the principal amount
of a Security denominated in one or more foreign currencies or currency units
shall be the U.S. dollar equivalent, determined in the manner provided as
contemplated by Section 301 on the date of original issuance of such Security,
of the principal amount (or, in the case of an Original Issue Discount
Security, the U.S. dollar equivalent on the date of original issuance of such
Security of the amount determined as provided in Clause (A) above) of such
Security, and (C) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Securities
which the Trustee knows to be so owned shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to
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<PAGE> 17
the satisfaction of the Trustee the pledgee's right so to act with respect to
such Securities and that the pledgee is not the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of or any premium or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, limited liability company,
unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Securities
of any series, means the place or places where the principal of and any premium
and interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Security.
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee,
means the chairman or any vice-chairman of the board of directors, the chairman
or any vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any trust officer or assistant trust officer,
the controller or
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<PAGE> 18
any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"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 Indebtedness" means the principal of (and premium, if
any) and interest on (a) all indebtedness of the Company (including
indebtedness of others guaranteed by the Company) other than the Securities,
which is (i) for money borrowed or (ii) evidenced by a note or similar
instrument given in connection with the acquisition of any business, properties
or assets of any kind, (b) obligations of the Company as lessee under leases
required to be capitalized on the balance sheet of the lessee under generally
accepted accounting principles and (c) amendments, renewals, extensions,
modifications and refundings of any such indebtedness or obligation, in any
such case whether outstanding on the date of this Indenture or thereafter
created, incurred or assumed, unless in any case in the instrument creating or
evidencing any such indebtedness or obligation or pursuant to which the same is
outstanding it is provided that such indebtedness or obligation is not superior
in right of payment to the Securities or it is provided that such obligation is
subordinated to Senior Indebtedness to substantially the same extent as the
Securities are subordinated to Senior Indebtedness.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or
any instalment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such instalment of principal or interest is due and payable.
"Subsidiary" means, except as otherwise specified in Sections
1008 and 1009, a corporation 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 Sub-
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<PAGE> 19
sidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after
such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder,
and if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean each Trustee with respect to
Securities of that series.
"U.S. Government Obligations" has the meaning specified in
Section 1304.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee
to take any action under any provision of this Indenture, the Company shall
furnish to the Trustee such certificates and opinions as may be required under
the Trust Indenture Act. Each such certificate or opinion shall be given in
the form of an Officers' Certificate, if to be given by an officer of the
Company, or an Opinion of Counsel, if to be given by counsel, and shall comply
with the requirements of the Trust Indenture Act and any other requirements set
forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
provided for in Section 1004) shall include
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<PAGE> 20
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company or any
subsidiary of the Company stating that the information with respect to such
factual matters is in the possession of the Company or any subsidiary 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.
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<PAGE> 21
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Section 104. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by 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 agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
601) conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security
Register.
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
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<PAGE> 22
lieu thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.
The Company may, in the circumstances permitted by the Trust
Indenture Act, set any day as the record date for the purpose of determining
the Holders of Outstanding Securities of any series entitled to give or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given or taken by Holders
of Securities of such series. With regard to any record date set pursuant to
this paragraph, the Holders of Outstanding Securities of the relevant series on
such record date (or their duly appointed agents), and only such Persons, shall
be entitled to give or take the relevant action, whether or not such Holders
remain Holders after such record date. With regard to any action that may be
given or taken hereunder only by Holders of a requisite principal amount of
Outstanding Securities of any series (or their duly appointed agents) and for
which a record date is set pursuant to this paragraph, the Company may, at its
option, set an expiration date after which no such action purported to be given
or taken by any Holder shall be effective hereunder unless given or taken on or
prior to such expiration date by Holders of the requisite principal amount of
Outstanding Securities of such series on such record date (or their duly
appointed agents). On or prior to any expiration date set pursuant to this
paragraph, the Company may, on one or more occasions at its option, extend such
date to any later date. Nothing in this paragraph shall prevent any Holder (or
any duly appointed agent thereof) from giving or taking, after any such
expiration date, any action identical to, or, at any time, contrary to or
different from, the action or purported action to which such expiration date
relates, in which event the Company may set a record date in respect thereof
pursuant to this paragraph. Nothing in this paragraph shall be construed to
render ineffective any action taken at any time by the Holders (or their duly
appointed agents) of the requisite principal amount of Outstanding Securities
of the relevant series on the date such action is so taken. Notwithstanding
the foregoing or the Trust Indenture Act, the Company shall not set a record
date for, and the provisions of this paragraph shall not apply with respect to,
any notice, declaration or direction referred to in the next paragraph.
Upon receipt by the Trustee from any Holder of Securities of a
particular series of (i) any notice of default or breach referred to in Section
501(4) or 501(5)
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<PAGE> 23
with respect to Securities of such series, if such default or breach has
occurred and is continuing and the Trustee shall not have given such notice to
the Company, (ii) any declaration of acceleration referred to in Section 502,
if an Event of Default with respect to Securities of such series has occurred
and is continuing and the Trustee shall not have given such a declaration to
the Company, or (iii) any direction referred to in Section 512 with respect to
Securities of such series, if the Trustee shall not have taken the action
specified in such direction, then a record date shall automatically and without
any action by the Company or the Trustee be set for determining the Holders of
Outstanding Securities of such series entitled to join in such notice,
declaration or direction, which record date shall be the close of business on
the tenth day following the day on which the Trustee receives such notice,
declaration or direction. Promptly after such receipt by the Trustee, and in
any case not later than the fifth day thereafter, the Trustee shall notify the
Company and the Holders of Outstanding Series of such series of any such record
date so fixed. The Holders of Outstanding Securities of such series on such
record date (or their duly appointed agents), and only such Persons, shall be
entitled to join in such notice, declaration or direction, whether or not such
Holders remain Holders after such record date; provided that, unless such
notice, declaration or direction shall have become effective by virtue of
Holders of the requisite principal amount of Outstanding Securities of such
series on such record date (or their duly appointed agents) having joined
therein on or prior to the 90th day after such record date, such notice,
declaration or direction shall automatically and without any action by any
Person be cancelled and of no further effect. Nothing in this paragraph shall
be construed to prevent a Holder (or a duly appointed agent thereof) from
giving, before or after the expiration of such 90-day period, a notice,
declaration or direction contrary to or different from, or, after the
expiration of such period, identical to, the notice, declaration or direction
to which such record date relates, in which event a new record date in respect
thereof shall be set pursuant to this paragraph. Nothing in this paragraph
shall be construed to render ineffective any notice, declaration or direction
of the type referred to in this paragraph given at any time to the Trustee and
the Company by Holders (or their duly appointed agents) of the requisite
principal amount of Outstanding Securities of the relevant series on the date
such notice, declaration or direction is so given.
Without limiting the foregoing, a Holder entitled hereunder to
give or take any action hereunder with regard
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<PAGE> 24
to any particular Security may do so with regard to all or any part of the
principal amount of such Security or by one or more duly appointed agents each
of which may do so pursuant to such appointment with regard to all or any
different part of such principal amount.
Section 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: ................., or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this instrument
or at any other address previously furnished in writing to the Trustee
by the Company.
Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at his address as it appears in the
Security Register, not later than the latest date (if any), and not earlier
than the earliest date (if any), prescribed for the giving of such notice. In
any case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders.
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.
-14-
<PAGE> 25
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or to be excluded, as the
case may be.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, the holders of Senior Indebtedness and the Holders, any
benefit or any
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<PAGE> 26
legal or equitable right, remedy or claim under this Indenture.
Section 112. Governing Law.
This Indenture and the Securities shall be governed by and
construed in accordance with the law of the State of New York, but without
regard to principles of conflicts of laws.
Section 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Security or the last date on which a Holder has the
right to convert his Securities shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities (other than a provision of the Securities of any series which
specifically states that such provision shall apply in lieu of this Section))
payment of interest or principal (and premium, if any) or conversion of the
Securities need not be made at such Place of Payment on such date, but may be
made on the next succeeding Business Day at such Place of Payment with the same
force and effect as if made on the Interest Payment Date or Redemption Date, or
at the Stated Maturity, or on such last day for conversion, provided that no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.
ARTICLE TWO
Security Forms
Section 201. Forms Generally.
The Securities of each series shall be in substantially the
form set forth in this Article, or in such other form as shall be established
by or pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
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<PAGE> 27
Securities. 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.
The definitive Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Section 202. Form of Face of Security.
[Insert any legend required by the Internal Revenue Code and
the regulations thereunder.]
AMERICAN HEALTH PROPERTIES, INC.
............................................
No. ......... $ ........
American Health Properties, Inc., a corporation duly organized
and existing under the laws of Delaware (herein called the "Company", which
term includes any successor Person under the Indenture hereinafter referred
to), for value received, hereby promises to pay to ............................
..............................................., or registered assigns, the
principal sum of .................. ................... Dollars on
............................ ........................... [if the Security is to
bear interest prior to Maturity, insert -- , and to pay interest thereon from
............. or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, semi-annually on ............ and
............ in each year, commencing ........., at the rate of ....% per
annum, until the principal hereof is paid or made available for payment [if
applicable, insert -- , and at the rate of ....% per annum on any overdue
principal and premium and on any overdue instalment of interest]. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the ....... or ....... (whether or not a Business Day), as the case may be,
next preceding such Interest
-17-
<PAGE> 28
Payment Date. Any such interest not so punctually paid or duly provided for
will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture].
[If the Security is not to bear interest prior to Maturity,
insert -- The principal of this Security shall not bear interest except in the
case of a default in payment of principal upon acceleration, upon redemption or
at Stated Maturity and in such case the overdue principal of this Security
shall bear interest at the rate of ....% per annum which shall accrue from the
date of such default in payment to the date payment of such principal has been
made or duly provided for. Interest on any overdue principal shall be payable
on demand. Any such interest on any overdue principal that is not so paid on
demand shall bear interest at the rate of ......% per annum which shall accrue
from the date of such demand for payment to the date payment of such interest
has been made or duly provided for, and such interest shall also be payable on
demand.]
Payment of the principal of (and premium, if any) and [if
applicable, insert -- any such] interest on this Security will be made at the
office or agency of the Company maintained for that purpose in ............, in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts [if applicable, insert
-- ; provided, however, that at the option of the Company payment of interest
may be made by check mailed to the address of the Person entitled thereto as
such address shall appear in the Security Register].
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be
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<PAGE> 29
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated:
AMERICAN HEALTH PROPERTIES, INC.
By..............................
Attest:
...........................
Section 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under an Indenture, dated as of __________ __, 199_ (herein
called the "Indenture"), between the Company and ..................., as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Company, the
Trustee, the holders of Senior Indebtedness and the Holders of the Securities
and of the terms upon which the Securities are, and are to be, authenticated
and delivered. This Security is one of the series designated on the face
hereof [if applicable, insert --, limited in aggregate principal amount to
$...........].
[If applicable, insert -- Subject to and upon compliance with
the provisions of the Indenture, the Holder of this Security is entitled, at
his option, at any time on or before the close of business on __________, or in
case this Security or a portion hereof is called for redemption, then in
respect of this Security or such portion hereof until and including, but
(unless the Company defaults in making the payment due upon redemption) not
after, the close of business on the 10th calendar day before the Redemption
Date, to convert this Security (or any portion of the principal amount hereof
which is $1,000 or an integral multiple thereof), at the principal amount
hereof, or of such portion, into fully paid and non-assessable shares
-19-
<PAGE> 30
(calculated as to each conversion to the nearest 1/100 of a share) of Common
Stock of the Company at a conversion price per share of Common Stock equal to
$_____ per each share of Common Stock (or at the current adjusted conversion
price if an adjustment has been made as provided in the Indenture) by surrender
of this Security, duly endorsed or assigned to the Company or in blank, to the
Company at its office or agency in __________, accompanied by written notice to
the Company that the Holder hereof elects to convert this Security, or if less
than the entire principal amount hereof is to be converted, the portion hereof
to be converted, and, in case such surrender shall be made during the period
from the close of business on any Regular Record Date next preceding any
Interest Payment Date to the opening of business on such Interest Payment Date
(unless this Security or the portion thereof being converted has been called
for redemption on a Redemption Date within such period), also accompanied by
payment in __________ Clearing House or other funds acceptable to the Company
of an amount equal to the interest payable on such Interest Payment Date on the
principal amount of this Security then being converted. Subject to the
aforesaid requirement for payment and, in the case of a conversion after the
Regular Record Date next preceding any Interest Payment Date and on or before
such Interest Payment Date, to the right of the Holder of this Security (or any
Predecessor Security) of record at such Regular Record Date to receive an
instalment of interest (with certain exceptions provided in the Indenture), no
payment or adjustment is to be made on conversion for interest accrued hereon
or for dividends on the Common Stock issued on conversion. No fractions of
shares or scrip representing fractions of shares will be issued on conversion,
but instead of any fractional interest the Company shall pay a cash adjustment
as provided in the Indenture. The conversion price is subject to adjustment as
provided in the Indenture. In addition, the Indenture provides that in case of
certain consolidations or mergers to which the Company is a party or the
transfer of substantially all of the assets of the Company, the Indenture shall
be amended, without the consent of any Holders of Securities, so that this
Security, if then outstanding, will be convertible thereafter, during the
period this Security shall be convertible as specified above, only into the
kind and amount of securities, cash and other property receivable upon the
consolidation, merger or transfer by a holder of the number of shares of Common
Stock into which this Security might have been converted immediately prior to
such consolidation, merger or transfer (assuming such holder of Common Stock
failed to exercise any rights of election and received per share the kind and
amount received per share by a plurality of non-electing shares).]
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<PAGE> 31
[If applicable, insert -- The Securities of this series are
subject to redemption upon not less than 30 days' notice by mail, [if
applicable, insert -- (1) on ........... in any year commencing with the year
...... and ending with the year ...... through operation of the sinking fund
for this series at a Redemption Price equal to 100% of the principal amount,
and (2)] at any time [if applicable, insert -- on or after .........., 19..],
as a whole or in part, at the election of the Company, at the following
Redemption Prices (expressed as percentages of the principal amount): If
redeemed [if applicable, insert -- on or before ..............., __%, and if
redeemed] during the 12-month period beginning ............. of the years
indicated,
<TABLE>
<CAPTION>
Redemption Redemption
Year Price Year Price
---- ----- ---- -----
<S> <C> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]
[If applicable, insert -- The Securities of this series are
subject to redemption upon not less than 30 days' notice by mail, (1) on
............ in any year commencing with the year .... and ending with the year
.... through operation of the sinking fund for this series at the Redemption
Prices for redemption through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below, and (2) at
any time [if applicable, insert -- on or after ............], as a whole or in
part, at the election of the Company, at the
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<PAGE> 32
Redemption Prices for redemption otherwise than through operation of the
sinking fund (expressed as percentages of the principal amount) set forth in
the table below: If redeemed during the 12-month period beginning ............
of the years indicated,
<TABLE>
<CAPTION>
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
---- ----------------- ----------------------
<S> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert -- Notwithstanding the foregoing, the
Company may not, prior to ............., redeem any Securities of this series
as contemplated by [if applicable, insert -- Clause (2) of] the preceding
paragraph as a part of, or in anticipation of, any refunding operation by the
application, directly or indirectly, of moneys borrowed having an interest cost
to the Company (calculated in accordance with generally accepted financial
practice) of less than .....% per annum.]
[If applicable, insert -- The sinking fund for this series
provides for the redemption on ............ in each year beginning with the
year ....... and ending with the year ...... of [if applicable, insert -- not
less than $.......... ("mandatory sinking fund") and not more than]
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<PAGE> 33
$......... aggregate principal amount of Securities of this series. Securities
of this series acquired or redeemed by the Company otherwise than through [if
applicable, insert --mandatory] sinking fund payments [if applicable, insert --
and Securities surrendered for conversion] may be credited against subsequent
[if applicable, insert -- mandatory] sinking fund payments otherwise required
to be made [if applicable, insert -- in the inverse order in which they become
due].]
[If the Security is subject to redemption of any kind, insert
-- In the event of redemption or conversion of this Security in part only, a
new Security or Securities of this series and of like tenor for the unredeemed
or unconverted portion hereof will be issued in the name of the Holder hereof
upon the cancellation hereof.]
The indebtedness evidenced by this Security is, to the extent
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness, and this Security is issued
subject to the provisions of the Indenture with respect thereto. Each Holder
of this Security, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his behalf to take
action as may be necessary or appropriate to effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes.
[If applicable, insert -- The Indenture contains provisions
for defeasance at any time of [(1) the entire indebtedness of this Security or
(2)] certain restrictive covenants and Events of Default with respect to this
Security, in each case upon compliance with certain conditions set forth in the
Indenture.]
[If the Security is not an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this series
shall occur and be continuing, the principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture.]
[If the Security is an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this series
shall occur and be continuing, an amount of principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture. Such amount shall be equal to -- insert formula for
determining the amount. Upon payment (i) of the amount of principal so
declared due and payable
-23-
<PAGE> 34
and (ii) of interest on any overdue principal and overdue interest all of the
Company's obligations in respect of the payment of the principal of and
interest, if any, on the Securities of this series shall terminate.]
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in principal amount
of the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and
binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any
proceeding with respect to the Indenture or for the appointment of a receiver
or trustee or for any other remedy thereunder, unless such Holder shall have
previously given the Trustee written notice of a continuing Event of Default
with respect to the Securities of this series, the Holders of not less than 25%
in principal amount of the Securities of this series at the time Outstanding
shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the Trustee reasonable
indemnity and the Trustee shall not have received from the Holders of a
majority in principal amount of Securities of this series at the time
Outstanding a direction inconsistent with such request, and shall have failed
to institute any such proceeding, for 60 days after receipt of such notice,
request and offer of indemnity. The foregoing shall not apply to any suit
instituted by the Holder of this Security for the enforcement of any payment of
principal hereof or any premium or interest hereon on or after the respective
due dates expressed herein.
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<PAGE> 35
Subject to the rights of holders of Senior Indebtedness, as
set forth in the Indenture, no other reference herein to the Indenture and no
other provision of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of (and premium, if any) and interest on this Security at the times,
place and rate, and in the coin or currency, herein prescribed or to convert
this Security as provided in the Indenture.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registerable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the
principal of and any premium and interest on this Security are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of [$1,000] and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of like tenor of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
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<PAGE> 36
[If applicable, insert --
[FORM OF CONVERSION NOTICE]
To: AMERICAN HEALTH PROPERTIES, INC.
The undersigned owner of this Security hereby irrevocably exercises
the option to convert this Security, or portion hereof (which is $1,000 or an
integral multiple thereof) below designated, into shares of Common Stock of
American Health Properties, Inc. in accordance with the terms of the Indenture
referred to in this Security, and directs that the shares issuable and
deliverable upon the conversion, together with any check in payment for
fractional shares and any Securities, representing any unconverted principal
amount hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares are to be issued in the
name of a person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto. Any amount required to be paid by
the undersigned on account of interest accompanies this Security.
Dated:
<TABLE>
<S> <C>
Fill in for registration of
shares of Common Stock and
Securities if to be issued
otherwise than to the
registered holder.
Principal Amount to be converted (in an
integral multiple of $1,000,
if less than all):
-------------------------------- $
Name
--------------------------------
Address
-------------------------------- -----------------------------------------
(Please print name and Signature
address, including zip code
number)
</TABLE>
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<PAGE> 37
SOCIAL SECURITY OR OTHER
TAXPAYER IDENTIFYING
NUMBER
[SIGNATURE GUARANTEED -- required
only if Common Stock and
Securities are to be issued
and delivered to other than
registered holder]
____________________________]
Section 204. Form of Legend for Global Securities.
Every Global Security authenticated and delivered hereunder
shall bear a legend in substantially the following form:
This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary
or a nominee thereof. This Security may not be transferred to, or
registered or exchanged for Securities registered in the name of, any
Person other than the Depositary or a nominee thereof and no such
transfer may be registered, except in the limited circumstances
described in the Indenture. Every Security authenticated and
delivered upon registration of transfer of, or in exchange for or in
lieu of, this Security shall be a Global Security subject to the
foregoing, except in such limited circumstances.
Section 205. Form of Trustee's Certificate of Authentication.
The Trustee's certificates 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.
....................................,
As Trustee
By...................................
Authorized Officer
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<PAGE> 38
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. There
shall be established in or pursuant to a Board Resolution and, subject to
Section 303, set forth, or determined in the manner provided, in an Officers'
Certificate, or established in one or more indentures supplemental hereto,
prior to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other
series);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of the series pursuant to Section 304, 305,
306, 906 or 1107 and except for any Securities which, pursuant to
Section 303, are deemed never to have been authenticated and delivered
hereunder);
(3) the Person to whom any interest on a Security of the
series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest;
(4) the date or dates on which the principal of the
Securities of the series is payable;
(5) the rate or rates at which the Securities of the series
shall bear interest, if any, the date or dates from which such
interest shall accrue, the Interest Payment Dates on which any such
interest shall be payable and the Regular Record Date for any interest
payable on any Interest Payment Date;
(6) the place or places where the principal of and any
premium and interest on Securities of the series shall be payable;
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<PAGE> 39
(7) 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;
(8) the obligation, if any, of the Company to redeem or
purchase Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the
period or periods 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;
(9) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
(10) the currency, currencies or currency units in which
payment of the principal of and any premium and interest on any
Securities of the series shall be payable if other than the currency
of the United States of America and the manner of determining the
equivalent thereof in the currency of the United States of America for
purposes of the definition of "Outstanding" in Section 101;
(11) if the amount of payments of principal of or any premium
or interest on any Securities of the series may be determined with
reference to an index, the manner in which such amounts shall be
determined;
(12) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the
Company or a Holder thereof, in one or more currencies or currency
units other than that or those in which the Securities are stated to
be payable, the currency, currencies or currency units in which
payment of the principal of and any premium and interest on Securities
of such series as to which such election is made shall be payable, and
the periods within which and the terms and conditions upon which such
election is to be made;
(13) 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;
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<PAGE> 40
(14) the applicability, nonapplicability, or variation, of
Sections 1008 and 1009 with respect to the Securities of such series;
(15) if applicable, that the Securities of the series shall
be subject to either or both of Defeasance or Covenant Defeasance as
provided in Article Thirteen; provided that no series of Securities
that is convertible into Common Stock as provided in Article Fourteen
or convertible into or exchangeable for any other securities pursuant
to Section 301(18) shall be subject to Defeasance pursuant to Section
1302;
(16) if and as applicable, that the Securities of the series
shall be issuable in whole or in part in the form of one or more
Global Securities and, in such case, the Depositary or Depositaries
for such Global Security or Global Securities and any circumstances
other than those set forth in Section 305 in which any such Global
Security may be transferred to, and registered and exchanged for
Securities registered in the name of, a Person other than the
Depositary for such Global Security or a nominee thereof and in which
any such transfer may be registered;
(17) the terms and conditions, if any, pursuant to which the
Securities are convertible into Common Stock of the Company pursuant
to Article Fourteen, and any variation thereof;
(18) the terms and conditions, if any, pursuant to which the
Securities are convertible into or exchangeable for any other
securities; and
(19) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as
permitted by Section 901(5)).
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to the Board Resolution referred to above and (subject to Section
303) set forth, or determined in the manner provided, in the Officers'
Certificate referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and
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<PAGE> 41
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
The Securities shall be subordinated in right of payment to
Senior Indebtedness as provided in Article Fifteen.
Section 302. Denominations.
The Securities of each series shall be issuable only in
registered form without coupons in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such specified denomination
with respect to the Securities of any series, the Securities of such series
shall be issuable in denominations of $1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by
its Chairman of the Board, its Vice 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. The signature of any of
these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any Series
executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order shall authenticate and deliver
such Securities. If the form or terms of the Securities of the series have
been established in or pursuant to one or more Board Resolutions as permitted
by Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject to
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Section 601) shall be fully protected in relying upon, an Opinion of Counsel
stating,
(1) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 201, that such
form has been established in conformity with the provisions of this
Indenture;
(2) if the terms of such Securities have been established by
or pursuant to Board Resolution as permitted by Section 301, that such
terms have been established in conformity with the provisions of this
Indenture; and
(3) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid
and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles.
If such form 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 authentication upon original
issuance of the first Security of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form
provided for herein
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<PAGE> 43
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder. Notwithstanding
the foregoing, if any Security shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as provided in Section
309, for all purposes of this Indenture such Security shall be deemed never to
have been authenticated and delivered hereunder and shall never be entitled to
the benefits of this Indenture.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities of any
series, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities
may determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company
will cause definitive Securities of that series to be prepared without
unreasonable delay. After the preparation of definitive Securities of such
series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary Securities
of such series at the office or agency of the Company in a Place of Payment for
that series, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities of any series the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations and
of a like aggregate principal amount and tenor. Until so exchanged the
temporary Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of such series and
tenor.
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<PAGE> 44
Section 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and in
any other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Securities and of transfers of Securities. The
Trustee is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any 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 deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount and tenor.
At the option of the Holder, Securities of any series may be
exchanged for other Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor, upon
surrender of the Securities to be exchanged at such office or agency. Whenever
any Securities are so surrendered for exchange, the Company shall execute, and
the Trustee shall authenticate and deliver, the Securities which the Holder
making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer or
exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a
sum sufficient to cover any tax or
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<PAGE> 45
other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 304, 906 or 1107 not involving any transfer.
The Company shall not be required (1) to issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 14 days before the day of the mailing of a notice of
redemption of Securities of that series selected for redemption under Section
1103 and ending at the close of business on the day of such mailing, or (2) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part.
Notwithstanding any other provision in this Indenture, no
Global Security may be transferred to, or registered or exchanged for
Securities registered in the name of, any Person other than the Depositary for
such Global Security or any nominee thereof, and no such transfer may be
registered, unless (1) such Depositary (A) notifies the Company that it is
unwilling or unable to continue as Depositary for such Global Security or (B)
ceases to be a clearing agency registered under the Exchange Act, (2) the
Company executes and delivers to the Trustee a Company Order that such Global
Security shall be so transferable, registrable and exchangeable, and such
transfers shall be registrable, (3) there shall have occurred and be continuing
an Event of Default with respect to the Securities evidenced by such Global
Security or (4) there shall exist such other circumstances, if any, as have
been specified for this purpose as contemplated by Section 301.
Notwithstanding any other provision in this Indenture, a Global Security to
which the restriction set forth in the preceding sentence shall have ceased to
apply may be transferred only to, and may be registered and exchanged for
Securities registered only in the name or names of, such Person or Persons as
the Depositary for such Global Security shall have directed and no transfer
thereof other than such a transfer may be registered.
Every Security authenticated and delivered upon registration
of transfer of, or in exchange for or in lieu of, a Global Security to which
the restriction set forth in the first sentence of the preceding paragraph
shall apply, whether pursuant to this Section, Section 304, 306, 906 or 1107 or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Security.
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<PAGE> 46
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this
Section in exchange for any mutilated Security or in lieu of any destroyed,
lost or stolen Security shall constitute an original additional contractual
obligation of the Company, whether or not the mutilated, destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
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<PAGE> 47
Section 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301
with respect to any series of Securities, interest on any Security which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest.
Any interest on any Security of any series which is payable,
but is not punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable to the
Holder on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company, at its election
in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security of such series and the
date of the proposed payment, and at the same time the Company shall
deposit with the Trustee 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 14 days and not less than 10
days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Securities of such
series at his address as it appears in the Security
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<PAGE> 48
Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Securities of
such series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
Subject to the provisions of Section 1402, in the case of any
Security which is converted after any Regular Record Date and on or prior to
the next succeeding Interest Payment Date, interest whose Stated Maturity is on
such Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion, and such interest (whether or not punctually
paid or duly provided for) shall be paid to the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close of
business on such Regular Record Date. Except as otherwise expressly provided
in the immediately preceding sentence in the case of any Security which is
converted, interest whose Stated Maturity is after the date of conversion of
such Security shall not be payable.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and any
premium and (subject to Section 307) any interest on
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<PAGE> 49
such Security and for all other purposes whatsoever, whether or not such
Security be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
Section 309. Cancellation.
All Securities surrendered for payment, redemption,
registration of transfer or exchange or conversion or for credit against any
sinking fund payment shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly cancelled by it.
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and may deliver to the Trustee (or
to any other Person for delivery to the Trustee) for cancellation any
Securities previously authenticated hereunder which the Company has not issued
and sold, and all Securities so delivered shall be promptly cancelled by the
Trustee. No Securities shall be 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 held by the Trustee
shall be disposed of as directed by a Company Order.
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 (except as to any surviving rights of conversion, registration
of transfer or exchange of Securities herein expressly provided for), and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(1) either
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<PAGE> 50
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to
the Trustee for cancellation, for principal and any premium and
interest to the date of such deposit (in the case of Securities which
have become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 607, the
obligations of the Trustee to any Authenticating Agent under Section 613 and,
if money shall have been deposited with the Trustee pursuant to subclause (B)
of Clause (1) of this Section, the obligations
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of the Trustee under Section 402 and the last paragraph of Section 1003 shall
survive.
Section 402. Application of Trust Money.
Subject to provisions of the last paragraph of Section 1003,
all money deposited with the Trustee pursuant to Section 401 shall be held in
trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium
and interest for whose payment such money has been deposited with the Trustee.
All moneys deposited with the Trustee pursuant to Section 401 (and held by it
or any Paying Agent) for the payment of Securities subsequently converted shall
be returned to the Company upon Company Request.
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 occasioned by the
provisions of Article Fifteen or 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 upon any Security
of that series when it becomes due and payable, and continuance of
such default for a period of 30 days; or
(2) default in the payment of the principal of (or premium,
if any, on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when
and as due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture
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<PAGE> 52
(other than a covenant or warranty a default the performance or breach
of which is elsewhere in this Section specifically dealt with or which
has expressly been included in this Indenture solely for the benefit
of a 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 10% 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) a default under any bond, debenture, note or other
evidence of indebtedness for money borrowed by the Company (including
a default with respect to Securities of any series other than that
series) having an aggregate principal amount outstanding of at least
$5,000,000, or under any mortgage, indenture or instrument (including
this Indenture) under which there may be issued or by which there may
be secured or evidenced any indebtedness for money borrowed by the
Company having an aggregate principal amount outstanding of at least
$5,000,000, whether such indebtedness now exists or shall hereafter be
created, which default (A) shall constitute a failure to pay any
portion of the principal of such indebtedness when due and payable
after the expiration of any applicable grace period with respect
thereto or (B) shall have resulted in such indebtedness becoming or
being declared due and payable prior to the date on which it would
otherwise have become due and payable, without, in the case of Clause
(A), such indebtedness having been discharged or without, in the case
of Clause (B), such indebtedness having been discharged or such
acceleration having been rescinded or annulled, in each such case
within a period of 10 days after there shall have been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 10% in principal
amount of the Outstanding Securities of that series a written notice
specifying such default and requiring the Company to cause such
indebtedness to be discharged or cause such acceleration to be
rescinded or annulled, as the case may be, and stating that such
notice is a "Notice of Default" hereunder; provided, however, that,
subject to the provisions of Sections 601 and 602, the Trustee shall
not be deemed to have knowledge of such default unless either (A) a
Responsible Officer of the Trustee shall have actual knowledge of such
default or
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(B) the Trustee shall have received written notice thereof from the
Company, from any Holder, from the holder of any such indebtedness or
from the trustee under any such mortgage, indenture or other
instrument; or
(6) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive
days; or
(7) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case
or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree or order for relief in respect
of the Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under
any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or other similar official of the Company or of any substantial part of
its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or the taking of corporate
action by the Company in furtherance of any such action; or
(8) any other Event of Default provided with respect to
Securities of that series.
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Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default
specified in Section 501(6) or 501(7)) 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. If an Event of
Default specified in Section 501(6) or 501(7) with respect to Securities of any
series at the time Outstanding occurs, the principal amount of all the
Securities of that series (or, if any Securities of that series are Original
Issue Discount Securities, such portion of the principal amount of such
Securities as may be specified by the terms thereof) shall automatically, and
without any declaration or other action on the part of the Trustee or any
Holder, 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 a majority in principal
amount of the Outstanding Securities of that series, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that
series,
(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than
by such declaration of acceleration and any interest thereon
at the rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel;
and
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(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of
that series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
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Section 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or
any other obligor upon the Securities), its property or its creditors, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding; provided, however, that the Trustee may, on behalf of the Holders,
vote for the election of a trustee in bankruptcy or similar official and be a
member of a creditors' or other similar committee.
Section 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.
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Section 506. Application of Money Collected.
Subject to Article Sixteen, any money collected by the Trustee
pursuant to this Article shall be applied in the following order, at the date
or dates fixed by the Trustee and, in case of the distribution of such money on
account of principal or any premium or interest, upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607; and
SECOND: Subject to Article Fifteen, to the payment of the
amounts then due and unpaid for principal of and any premium and
interest on the Securities in respect of which or for the benefit of
which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities for principal and any premium and interest, respectively.
Section 507. Limitation on Suits.
No Holder of any Security of any series shall have any right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the
Securities of that series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
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(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 to affect, disturb or prejudice the rights of any other of
such Holders, 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
and Interest and to Convert.
Notwithstanding any other provision in this Indenture, but
subject to Article Fifteen, the Holder of any Security shall have the right,
which is absolute and unconditional, to receive payment of the principal of and
any premium and (subject to Section 307) interest on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to convert such Security in accordance
with Article Fourteen and to institute suit for the enforcement of any such
payment and right to convert, and such rights shall not be impaired without the
consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
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Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time
to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
Section 512. Control by Holders.
The Holders of a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
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
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series waive any past default hereunder with respect to such series and its
consequences, except a default
(1) in the payment of the principal of or any premium or
interest on any Security of such series, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, a court may require any party litigant in
such suit to file an undertaking to pay the costs of such suit, and may assess
costs against any such party litigant, in the manner and to the extent provided
in the Trust Indenture Act; provided that neither this Section nor the Trust
Indenture Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the Company
or in any suit for the enforcement of the right to convert any Security in
accordance with Article Fourteen.
Section 515. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any usury, stay or
extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
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ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing, no
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
Section 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of
any series, the Trustee shall give the Holders of Securities of such series
notice of such default as and to the extent provided by the Trust Indenture
Act; provided, however, that in the case of any default of the character
specified in Section 501(4) with respect to Securities of such series, no such
notice to Holders shall be given until at least 30 days after the occurrence
thereof. For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default with respect to Securities of such series.
Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(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 to be genuine and to have been signed
or presented by the proper party or parties;
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(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors shall 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, rely upon an Officers'
Certificate;
(4) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(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 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.
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Section 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. The
Trustee or any Authenticating Agent shall not 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, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
Section 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.
Section 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation 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
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compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence 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 of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
Section 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.
Section 609. Corporate Trustee Required; Eligibility.
There shall at all times be one or more Trustees hereunder
with respect to the Securities of each series, at least one of which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
Section 610. Resignation and Removal; Appointment of Successor.
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
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by the successor Trustee in accordance with the applicable requirements of
Section 611.
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.
The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee
and to the Company.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been
a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public 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, (A) the Company by a Board Resolution may remove the
Trustee with respect to all securities, or (B) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
with respect to the
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Securities of one or more series, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such successor Trustee
may be appointed with respect to the Securities of one or more or all of such
series and that at any time there shall be only one Trustee with respect to the
Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any Series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 611, become the
successor Trustee with respect to the Securities of such series and to that
extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities of any Series shall have been
so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
to all Holders of Securities of such series in the manner provided in Section
106. Each notice shall include the name of the successor Trustee with respect
to the Securities of such series and the address of its Corporate Trust Office.
Section 611. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Trustee
with respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges,
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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.
In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each successor Trustee
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities of that or those
series as to which the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
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
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Trustee all such rights, powers and trusts referred to in paragraph (a) and (b)
of this Section, as the case may be.
No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
Section 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
Section 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection
of claims against the Company (or any such other obligor).
Section 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with
respect to one or more series of Securities which shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series issued upon
original issue and upon exchange, registration of transfer, partial conversion
or partial redemption thereof or pursuant to Section 306, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this
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Indenture to the authentication and delivery of Securities by the Trustee or
the Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State
thereof or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or State
authority. If such Authenticating Agent publishes reports of condition at
least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating
Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at
any time terminate the agency of an Authenticating Agent by giving written
notice thereof to such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first- class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such
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Authenticating Agent will serve, as their names and addresses appear in the
Security Register. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named as
an Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section, and
the Trustee shall be entitled to be reimbursed for such payments, subject to
the provisions of Section 607.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
...........................
As Trustee
By.........................
As Authenticating Agent
By.........................
Authorized Officer
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the
Trustee
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(1) semi-annually, not more than 15 days after each Regular
Record Date, a list for each series of Securities, in such form as the
Trustee may reasonably require, of the names and addresses of the
Holders of Securities of such series as of the 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 preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 701 and the
names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it as
provided in Section 701 upon receipt of a new list so furnished.
The rights of the Holders to communicate with other Holders
with respect to their rights under this Indenture or under the Securities, and
the corresponding rights and privileges of the Trustee, shall be as provided by
the Trust Indenture Act.
Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to names and addresses of Holders made
pursuant to the Trust Indenture Act.
Section 703. Reports by Trustee.
The Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant
thereto.
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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 notify the Trustee when any Securities are listed on any stock
exchange.
Section 704. Reports by Company.
The Company shall file with the Trustee and the Commission,
and transmit to Holders, such information, documents and other reports, and
such summaries thereof, as may be required pursuant to the Trust Indenture Act
at the times and in the manner provided pursuant to such Act; provided that any
such information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 days after the same is so required to be filed
with the Commission.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
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, 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
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principal of and any premium and interest on all the Securities and
the performance or observance of every covenant of this Indenture on
the part of the Company to be performed or observed and shall have
provided for conversion rights in accordance with Section 1411;
(2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company
or any Subsidiary as a result of such transaction as having been
incurred by the Company or such Subsidiary at the time of such
transaction, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have
happened and be continuing;
(3) if, as a result of any such consolidation or merger or
such conveyance, transfer or lease, properties or assets of the
Company would become subject to a mortgage, pledge, lien, security
interest or other encumbrance which would not be permitted by this
Indenture, the Company or such successor Person, as the case may be,
shall take such steps as shall be necessary effectively to secure the
Securities equally and ratably with (or prior to) all indebtedness
secured thereby; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, 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.
Section 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except
in the case of a lease, the predecessor Person shall be relieved of all
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obligations and covenants under this Indenture and the Securities.
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of
the Holders of all or any series of Securities (and if such covenants
are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for
the benefit of such series) or to surrender any right or power herein
conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate
the issuance of Securities in bearer form, registrable or not
registrable as to principal, and with or without interest coupons, or
to permit or facilitate the issuance of Securities in uncertificated
form; or
(5) to add to, change or eliminate any of the provisions of
this Indenture in respect of one or more series of Securities,provided
that any such addition, change or elimination (A) shall neither (i)
apply to any Security of any series created prior to the execution of
such supplemental indenture and entitled to the benefit of such
provision nor (ii) modify the rights of the Holder of any such
Security with respect to such provision or (B) shall become effective
only when there is no such Security Outstanding; or
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(6) to secure the Securities pursuant to the requirements of
Article Ten or otherwise; or
(7) to establish the form or terms of Securities of any
series as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 611; or
(9) to make provision with respect to the conversion rights
of Holders pursuant to the requirements of Article Fourteen; or
(10) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture, provided that such
action pursuant to this clause (10) shall not adversely affect the
interests of the Holders of Securities of any series in any material
respect.
Section 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee
may enter into an indenture or indentures supplemental hereto for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
instalment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any
premium payable upon the redemption thereof, or reduce the amount of
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the principal of an Original Issue Discount Security that would be due
and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 502, or change any Place of Payment where, or the
coin or currency in which, any Security or any premium or interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption
Date), or adversely affect the right to convert any Security as
provided in Article Fourteen, or modify the provisions of this
Indenture with respect to the subordination of the Securities in a
manner adverse to the Holders, or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513
or Section 1010, 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 1010, or the deletion of this proviso, in
accordance with the requirements of Sections 611 and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
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Section 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act.
Section 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company
shall so determine, new Securities of any series so modified as to 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.
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ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the principal of and
any premium and interest on the Securities of that series in accordance with
the terms of the Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any
series of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange, where Securities may be
surrendered for conversion and where notices and demands to or upon the Company
in respect of the Securities of that series and this Indenture may be served.
The Company will give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more
other offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each Place of Payment for Securities of any
series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.
Section 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent
with respect to any series of Securities, it
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will, on or before each due date of the principal of or any premium or interest
on any of the Securities of that series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
and any premium and interest so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for
any series of Securities, it will, prior to each due date of the principal of
or any premium or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, 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) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and
(2) during the continuance of any default by the Company (or any other obligor
upon the Securities of that series) in the making of any payment in respect of
the Securities of that series, and upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of or any
premium or interest on any Security of any series and remaining unclaimed for
two years after such principal, premium or interest has 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
shall thereafter, as
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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 a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in the Borough of Manhattan, The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Company.
Section 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard
to any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
Section 1005. 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
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the
loss thereof is not disadvantageous in any material respect to the Holders.
Section 1006. Maintenance of Properties.
The Company will cause all properties used or useful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all
necessary equipment and will cause to be made all necessary repairs,
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renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
Section 1007. 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 1008. Limitation on Liens.
Subject to Section 301(14), the Company will not pledge or
otherwise subject to any lien, any of its or its Subsidiaries' property or
assets unless the Securities of each series to which this covenant is made
applicable are secured by such pledge or lien equally and ratably with all
other obligations secured thereby so long as such other 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 of the Company and its consolidated
Subsidiaries 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
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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 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;
(4) 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;
(5) 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;
(6) 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;
(7) 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;
(8) Liens relating to secured indebtedness of the Company
outstanding on June 30, 1995; and
(9) 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 (8) inclusive, of
this Section 1008, provided, however, that the amount of any and all
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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).
As used in this Section 1008:
"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; and
"Subsidiary" means an affiliate controlled by the Company
directly, or indirectly through one or more intermediaries.
Section 1009. Limitation on Incurrence of Obligations for Borrowed Money.
Subject to Section 301(14), the Company will not create,
assume, incur or otherwise become liable in respect of, any
(1) 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 affect
thereto and to any concurrent transactions exceed the greater of (i)
150% of Capital Base, or (ii) 225% of Tangible Net Worth; and
(2) 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 affect thereto and to any concurrent transactions, exceed
225% of Capital Base.
For any period during which the Company shall have a
Subsidiary or Subsidiaries, the limitations contained in
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this subsection (b) shall be applied to the consolidated financial statements
of the Company and its Subsidiaries.
As used in this Section 1009:
"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;
"Debt" when used 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 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);
"Liabilities" means, at any date, the items shown as
liabilities on the balance sheet of the Company, except any item of deferred
income, including capital gains;
"Lien" means any interest in Property securing an obligation
owned to, or a claim by, a Person other than the owner of the Property, whether
such interest is based on 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
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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;
"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 therefor;
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible;
"Senior Debt" means all Debt other than Non-Recourse Debt and
Subordinated Debt;
"Subordinated Debt" means any 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 an affiliate controlled by the Company
directly, or indirectly through one or more intermediaries;
"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; and
"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.
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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 1006 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.
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article.
Securities of any series which are redeemable before their
Stated Maturity shall be redeemable in accordance with their terms and (except
as otherwise specified as contemplated by Section 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 a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities of any series, the Company shall,
at least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of
such Redemption Date, of the principal amount of Securities of such series to
be redeemed and, if applicable, of the tenor of the Securities to be redeemed.
In the case of any redemption of Securities 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.
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Section 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be
redeemed (unless all of the Securities of such series and of a specified tenor
are to be redeemed), the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions (equal to the minimum
authorized denomination for Securities of that series or any integral multiple
thereof) of the principal amount of Securities of such series of a denomination
larger than the minimum authorized denomination for Securities of that series.
If less than all of the Securities of such series and 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 and specified tenor not previously called
for redemption in accordance with the preceding sentence.
If any Security selected for partial redemption is converted
in part before termination of the conversion right with respect to the portion
of the Security so selected, the converted portion of such Security shall be
deemed (so far as may be) to be the portion selected for redemption.
Securities which have been converted during a selection of Securities to be
redeemed shall be treated by the Trustee as Outstanding for the purpose of such
selection.
The Trustee shall promptly notify the Company in writing of
the Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
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Section 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at his address
appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(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 of any Securities, the principal amounts) of the particular
Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after
said date,
(5) in the case of any Securities that are convertible
pursuant to Article Fourteen, the conversion price or rate, the date
on which the right to convert the principal of the Securities to be
redeemed will terminate and the place or places where such Securities
may be surrendered for conversion,
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price, and
(7) that the redemption is for a sinking fund, if such is the
case.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company and shall
be irrevocable.
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Section 1105. Deposit of Redemption Price.
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, all the
Securities which are to be redeemed on that date other than any Securities
called for redemption on that date which have been converted prior to the date
of such deposit.
If any Security called for redemption is converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held
in trust for the redemption of such Security shall (subject to any right of the
Holder of such Security or any Predecessor Security to receive interest as
provided in the last paragraph of Section 307) be paid to the Company upon
Company Request or, if then held by the Company, shall be discharged from such
trust.
Section 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender
of any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; provided, however, that, unless
otherwise specified as contemplated by Section 301, installments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and any premium shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
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Section 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver 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.
ARTICLE TWELVE
Sinking Funds
Section 1201. Applicability of Article.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of Securities of a series except as otherwise
specified as contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by
the terms of Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum amount
provided for by the terms of Securities of any series is herein referred to as
an "optional sinking fund payment". If provided for by the terms of Securities
of any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
Section 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series
(other than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been converted pursuant to Article Fourteen
or which have been redeemed either at the election of the Company pursuant to
the terms of such Securities or through
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the application of permitted optional sinking fund payments pursuant to the
terms of such Securities, in each case in satisfaction of all or any part of
any sinking fund payment with respect to the Securities of such series required
to be made pursuant to the terms of such Securities as provided for by the
terms of such series; provided that such Securities have not been previously so
credited. Such Securities shall be received and credited for such purpose by
the Trustee at the Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.
Section 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date
for any series of Securities, the Company will deliver to the Trustee an
Officers' Certificate specifying the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting
Securities of that series pursuant to Section 1202 and will also deliver to the
Trustee any Securities to be so delivered. Not less than 30 days before each
such sinking fund payment date the Trustee shall select the Securities to be
redeemed upon such sinking fund payment date in the manner specified in Section
1103 and cause notice of the redemption thereof to be given in the name of and
at the expense of the Company in the manner provided in Section 1104. Such
notice having been duly given, the redemption of such Securities shall be made
upon the terms and in the manner stated in Sections 1106 and 1107.
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.
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
Section 1301. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may elect, at its option by Board Resolution at
any time, to have either Section 1302 or Section 1303 applied to the
Outstanding Securities of any
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series designated pursuant to Section 301 as being defeasible pursuant to this
Article Thirteen (hereinafter called a "Defeasible Series"), upon compliance
with the conditions set forth below in this Article Thirteen; provided that
Section 1302 shall not apply to any series of Securities that is convertible
into Common Stock as provided in Article Fourteen or convertible into or
exchangeable for any other securities pursuant to Section 301(18).
Section 1302. Defeasance and Discharge.
Upon the Company's exercise of the option provided in Section
1301 to have this Section 1302 applied to the Outstanding Securities of any
Defeasible Series and subject to the proviso to Section 1301, the Company shall
be deemed to have been discharged from its obligations, and the provisions of
Article Fifteen shall cease to be effective, with respect to the Outstanding
Securities of such series as provided in this Section on and after the date the
conditions set forth in Section 1304 are satisfied (hereinafter called
"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 to have satisfied all its other
obligations under the Securities of such series and this Indenture insofar as
the Securities of such series are concerned (and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging the same), subject
to the following which shall survive until otherwise terminated or discharged
hereunder: (1) the rights of Holders of Securities of such series to receive,
solely from the trust fund described in Section 1304 and as more fully set
forth in such Section, payments in respect of the principal of and any premium
and interest on such Securities of such series when payments are due, (2) the
Company's obligations with respect to the Securities of such series under
Sections 304, 305, 306, 1002 and 1003, (3) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and (4) this Article Thirteen. Subject
to compliance with this Article Thirteen, the Company may exercise its option
provided in Section 1301 to have this Section 1302 applied to the Outstanding
Securities of any Defeasible Series notwithstanding the prior exercise of its
option provided in Section 1301 to have Section 1303 applied to the Outstanding
Securities of such series.
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Section 1303. Covenant Defeasance.
Upon the Company's exercise of the option provided in Section
1301 to have this Section 1303 applied to the Outstanding Securities of any
Defeasible Series, (1) the Company shall be released from its obligations under
Sections 1006 through 1009, inclusive, and Section 801(3), and any covenants
provided pursuant to Section 301(19), 901(2) or 901(7) for the benefit of the
Holders of such Securities and (2) the occurrence of any event specified in
Sections 501(3), 501(4) (with respect to any of Sections 1006 through 1009,
inclusive, and any such covenant provided pursuant to Section 301(19), 901(2)
or 901(7) and Section 801(3)), 501(5) and 501(8) shall be deemed not to be or
result in an Event of Default and (3) the provisions of Article Fifteen shall
cause to be effective, in each case with respect to the Outstanding Securities
of such series as provided in this Section on and after the date the conditions
set forth in Section 1304 are satisfied (hereinafter called "Covenant
Defeasance"). For this purpose, such Covenant Defeasance means that 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 specified Section (to the
extent so specified in the case of Section 501(4)) or Article Fifteen, whether
directly or indirectly by reason of any reference elsewhere herein to any such
Section or Article or by reason of any reference in any such Section or Article
to any other provision herein or in any other document, but the remainder of
this Indenture and the Securities of such series shall be unaffected thereby.
Section 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either
Section 1302 or Section 1303 to the Outstanding Securities of any Defeasible
Series:
(1) The Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee that
satisfies the requirements contemplated by Section 609 and agrees 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 Outstanding Securities of such
series, (A) money in an amount, or (B) U.S. Government Obligations
that through the scheduled payment of principal and interest in
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respect thereof in accordance with their terms will provide, not later
than one day before the due date of any payment, money in an amount,
or (C) a combination thereof, in each case sufficient, 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
any such other qualifying trustee) to pay and discharge, the principal
of and any premium and interest on the Securities of such series on
the respective Stated Maturities, in accordance with the terms of this
Indenture and the Securities of such series. As used herein, "U.S.
Government Obligation" means (x) any security that is (i) a direct
obligation of the United States of America for the payment of which
full faith and credit of the United States of America is pledged or
(ii) an obligation of a Person controlled or supervised by and acting
as an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either
case (i) or (ii), is not callable or redeemable at the option of the
issuer thereof, and (y) any depositary receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act of 1933, as amended)
as custodian with respect to any U.S. Government Obligation specified
in Clause (x) and held by such custodian for the account of the holder
of such depositary receipt, or with respect to any specific payment of
principal of or interest on any such U.S. Government
Obligation,provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the
holder of such depositary receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific
payment of principal or interest evidenced by such depositary receipt.
(2) 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 first set forth hereinabove, there has been a change in the
applicable Federal income tax law, in either case (A) or (B) to the
effect that, and based thereon such opinion shall confirm that, the
Holders of the Outstanding Securities of such series will not
recognize gain or loss for Federal income tax purposes
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as a result of the deposit, Defeasance and discharge to be effected
with respect to the Securities of such series and will be subject to
Federal income tax on the same amount, in the same manner and at the
same times as would be the case if such deposit, Defeasance and
discharge were not to occur.
(3) 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 gain or loss for Federal income tax purposes
as a result of the deposit and Covenant Defeasance to be effected with
respect to the Securities of such series and will be subject to
Federal income tax on the same amount, in the same manner and at the
same times as would be the case if such deposit and Covenant
Defeasance were not to occur.
(4) The Company shall have delivered to the Trustee an
Officer's Certificate to the effect that the Securities of such
series, if then listed on any securities exchange, will not be
delisted as a result of such deposit.
(5) No Event of Default or event that (after notice or lapse
of time or both) would become an Event of Default shall have occurred
and be continuing at the time of such deposit or, with regard to any
Event of Default or any such event specified in Sections 501(6) and
(7), at any time on or prior to the 90th day after the date of such
deposit (it being understood that this condition shall not be deemed
satisfied until after such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause
the Trustee to have a conflicting interest within the meaning of the
Trust Indenture Act (assuming all Securities are in default within the
meaning of such Act).
(7) Such Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under, any other
agreement or instrument to which the Company is a party or by which it
is bound.
(8) The Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent with respect to such Defeasance or Covenant
Defeasance have been complied with.
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(9) Such Defeasance or Covenant Defeasance shall not result
in the trust arising from such deposit constituting an investment
company within the meaning of the Investment Company Act of 1940, as
amended, unless such trust shall be qualified under such Act or exempt
from regulation thereunder.
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 (solely for
purposes of this Section and Section 1306, the Trustee and any such other
trustee are referred to collectively as the "Trustee") pursuant to Section 1304
in respect of the Securities of any Defeasible Series shall be held in trust
and applied by the Trustee, in accordance with the provisions of the Securities
of such series and this Indenture, to the payment, either directly or through
any such Paying Agent (including the Company acting as its own Paying Agent) as
the Trustee may determine, to the Holders of Securities of such series, of all
sums due and to become due thereon in respect of principal and any premium and
interest, but money so held in trust need not be segregated from other funds
except to the extent required by law. Money and U.S. Government obligations so
held in trust shall not be subject to the provisions of Article Fifteen.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1304 or the principal and interest
received in respect thereof other than any such tax, fee or other charge that
by law is for the account of the Holders of Outstanding Securities.
Anything in this Article Thirteen 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 with respect to Securities of any Defeasible Series
that, 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 that would then be required to be
deposited to effect an equivalent Defeasance or Covenant Defeasance with
respect to the Securities of such series.
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Section 1306. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any
money in accordance with this Article Thirteen with respect to the Securities
of any series by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application,
then the Company's obligations under this Indenture and the Securities of such
series shall be revived and reinstated as though no deposit had occurred
pursuant to this Article Thirteen with respect to Securities of such series
until such time as the Trustee or Paying Agent is permitted to apply all money
held in trust pursuant to Section 1305 with respect to Securities of such
series in accordance with this Article Thirteen; provided, however, that if the
Company makes any payment of principal of or any premium or interest on any
Security of such series following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of Securities of such
series to receive such payment from the money so held in trust.
ARTICLE FOURTEEN
Conversion of Securities
Section 1401. Applicability; Conversion Privilege and Conversion Price.
Securities of any series which are convertible into Common
Stock of the Company shall be convertible 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.
Subject to and upon compliance with the provisions of this
Article, at the option of the Holder thereof, any Security or any portion of
the outstanding principal amount thereof which is $1,000 or an integral
multiple of $1,000 may be converted at the principal amount thereof, or of such
portion thereof, into fully paid and nonassessable shares (calculated as to
each conversion to the nearest 1/100 of a share) of Common Stock of the Company
at the conversion price, determined as hereinafter provided, in effect at the
time of conversion. Such conversion right shall expire at the close of
business on the date specified for Securities of such series. In case a
Security or portion thereof is called for redemption at the election of the
Company, such conversion right in respect of the Security or portion so called
shall expire at the close of business on the 10th
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calendar day before the Redemption Date, unless the Company defaults in making
the payment due upon redemption.
The price at which shares of Common Stock shall be delivered
upon conversion (herein called the "conversion price") shall be the price
specified in relation to Securities of such series pursuant to Section 301.
The conversion price shall be adjusted in certain instances as provided in this
Article.
Section 1402. Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of
any Security to be converted shall surrender such Security, duly endorsed or
assigned to the Company or in blank, at any office or agency of the Company
maintained for that purpose pursuant to Section 1002, accompanied by written
notice to the Company (which shall be substantially in the form set forth in
Section 203) at such office or agency that the Holder elects to convert such
Security or, if less than the entire principal amount thereof is to be
converted, the portion thereof to be converted. Securities surrendered for
conversion during the period from the close of business on any Regular Record
Date next preceding any Interest Payment Date to the opening of business on
such Interest Payment Date shall (except in the case of Securities or portions
thereof which have been called for redemption on a Redemption Date within such
period) be accompanied by payment in New York Clearing House funds or other
funds acceptable to the Company of an amount equal to the interest payable on
such Interest Payment Date on the principal amount of Securities being
surrendered for conversion. Subject to the provisions of Section 307 relating
to the payment of Defaulted Interest by the Company, the interest payment with
respect to a Security called for redemption on a Redemption Date during the
period from the close of business on any Regular Record Date next preceding any
Interest Payment Date to the opening of business on such Interest Payment Date
shall be payable on such Interest Payment Date to the Holder of such Security
at the close of business on such Regular Record Date notwithstanding the
conversion of such Security after such Regular Record Date and prior to such
Interest Payment Date, and the Holder converting such Security need not include
a payment of such interest payment amount upon surrender of such Security for
conversion. Except as provided in the preceding sentence and subject to the
final paragraph of Section 307, no payment or adjustment shall be made upon any
conversion on account of any interest accrued on the
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Securities surrendered for conversion or on account of any dividends on the
Common Stock issued upon conversion.
Securities shall be deemed to have been converted immediately
prior to the close of business on the day of surrender of such Securities for
conversion in accordance with the foregoing provisions, and at such time the
rights of the Holders of such Securities as Holders shall cease, and the Person
or Persons entitled to receive the Common Stock issuable upon conversion shall
be treated for all purposes as the record holder or holders of such Common
Stock at such time. As promptly as practicable on or after the conversion
date, the Company shall issue and shall deliver at such office or agency a
certificate or certificates for the number of full shares of Common Stock
issuable upon conversion, together with payment in lieu of any fraction of a
share, as provided in Section 1403.
In the case of any Security which is converted in part only,
upon such conversion the Company shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the Company,
a new Security or Securities of authorized denominations in aggregate principal
amount equal to the unconverted portion of the principal amount of such
Security.
Section 1403. Fractions of Shares.
No fractional shares of Common Stock shall be issued upon
conversion of Securities. If more than one Security shall be surrendered for
conversion at one time by the same Holder, the number of full shares which
shall be issuable upon conversion thereof shall be computed on the basis of the
aggregate principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall pay a cash adjustment in respect
of such fraction in an amount equal to the same fraction of the daily closing
price per share of Common Stock (consistent with Section 1404(6) below) at the
close of business on the day of conversion.
Section 1404. Adjustment of Conversion Price.
(1) In case the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company in Common Stock, the
conversion price in effect at the opening of business on the day following the
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date fixed for determination of stockholders entitled to receive such dividend
or other distribution shall be reduced by multiplying such conversion price by
a fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
and the denominator shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution, such
reduction to become effective immediately after the opening of business on the
day following the date fixed for such determination. For the purposes of this
paragraph (1), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of fractions of
shares of Common Stock. The Company will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the Company.
(2) In case the Company shall issue rights or warrants to all
holders of its Common Stock entitling them to subscribe for or purchase shares
of Common Stock at a price per share less than the current market price per
share (determined as provided in paragraph (6) of this Section) of the Common
Stock on the date fixed for the determination of stockholders entitled to
receive such rights or warrants (other than pursuant to a dividend reinvestment
plan), the conversion price in effect at the opening of business on the day
following the date fixed for such determination shall be reduced by multiplying
such conversion price by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding at the close of business on the date
fixed for such determination plus the number of shares of Common Stock which
the aggregate of the offering price of the total number of shares of Common
Stock so offered for subscription or purchase would purchase at such current
market price and the denominator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such determination
plus the number of shares of Common Stock so offered for subscription or
purchase, such reduction to become effective immediately after the opening of
business on the day following the date fixed for such determination. For the
purposes of this paragraph (2), the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the Company
but shall include shares issuable in respect of scrip certificates issued in
lieu of fractions of shares of Common Stock. The Company will not issue any
rights or warrants in respect of shares of Common Stock held in the treasury of
the Company.
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(3) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the conversion
price in effect at the opening of business on the day following the day upon
which such subdivision becomes effective shall be proportionately reduced, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the conversion price in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately increased, such
reduction or increase, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its indebtedness or
assets (including securities, but excluding any rights or warrants referred to
in paragraph (2) of this Section, any dividend or distribution paid in cash out
of the earned surplus of the Company and any dividend or distribution referred
to in paragraph (1) of this Section), the conversion price shall be adjusted so
that the same shall equal the price determined by multiplying the conversion
price in effect immediately prior to the close of business on the date fixed
for the determination of stockholders entitled to receive such distribution by
a fraction of which the numerator shall be the current market price per share
(determined as provided in paragraph (6) of this Section) of the Common Stock
on the date fixed for such determination less the then fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution filed with the Trustee) of the portion of
the assets or evidences of indebtedness so distributed applicable to one share
of Common Stock and the denominator shall all be such current market price per
share of the Common Stock, such adjustment to become effective immediately
prior to the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such distribution. If after
the Distribution Date (the "Distribution Date"), as defined in the Rights
Agreement, dated as of April 18, 1990, between the Company and Manufacturers
Hanover Trust Company of California, as in effect on the date hereof (the
"Rights Agreement"), converting Holders of the Securities are not entitled to
receive the Rights, as defined in the Rights Agreement, which would otherwise
be attributable (but for the date of conversion) to the shares of Common Stock
received upon such conversion, then adjustment of the conversion price shall be
made under the preceding sentence
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as if the Rights were then being distributed to holders of the Company's Common
Stock. If such an adjustment is made and the Rights are later redeemed,
invalidated or terminated, then a corresponding reversing adjustment shall be
made to the conversion price, on an equitable basis, to take account of such
event. However, it is hereby agreed that the Company may elect to amend the
provisions presently applicable to the Rights so that each share of Common
Stock issuable upon conversion of the Securities, whether or not issued after
the Distribution Date for such Rights, will be accompanied by the Rights which
would otherwise be attributable (but for the date of conversion) to such shares
of Common Stock, in which event the preceding two sentences will not apply.
(5) The reclassification of Common Stock into securities
other than Common Stock (other than any reclassification upon a consolidation
or merger to which Section 1411 applies) shall be deemed to involve (a) a
distribution of such securities other than Common Stock to all holders of
Common Stock (and the effective date of such reclassification shall be deemed
to be "the date fixed for the determination of stockholders entitled to receive
such distribution" and the "date fixed for such determination" within the
meaning of paragraph (4) of this Section), and (b) a subdivision or
combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of
shares of Common Stock outstanding immediately thereafter (and the effective
date of such reclassification shall be deemed to be "the day upon which such
subdivision becomes effective" or "the day upon which such combination becomes
effective", as the case may be, such "the day upon which such subdivision or
combination becomes effective" within the meaning of paragraph (3) of this
Section).
(6) For the purpose of any computation under paragraphs (2)
and (4) of this Section, the current market price per share of Common Stock on
any day shall be deemed to be the average of the daily closing prices for the
five consecutive trading days (i.e., Business Days on which the Common Stock is
traded) selected by the Board of Directors commencing not more than 20 trading
days before, and ending not later than, the earlier of the day in question and
the day before the "ex" date with respect to the issuance or distribution
requiring such computation. For this purpose, the term "'ex' date", when used
with respect to any issuance or distribution, shall mean the first date on
which the Common Stock trades regular way on the applicable exchange or in the
applicable market without the right to receive such issuance or distribution.
The closing price for each
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day shall be the reported last sale price regular way or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices regular way, in either case on the New York Stock Exchange or,
if the Common Stock is not listed or admitted to trading on such Exchange, on
the principal national securities exchange on which the Common Stock is listed
or admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the National Association of Securities Dealers
Automated Quotations National Market or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or quoted on such
National Market, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange member firm
selected from time to time by the Board of Directors for that purpose.
(7) The Company may make such reductions in the conversion
price, in addition to those required by paragraphs (1), (2), (3) and (4) of
this Section, as it considers to be advisable in order to avoid or diminish any
income tax to any holders of shares of Common Stock resulting from any dividend
or distribution of stock or issuance of rights or warrants to purchase or
subscribe for stock or from any event treated as such for income tax purposes
or for any other reasons. The Company shall have the power to resolve any
ambiguity or correct any error in this paragraph (7) and its actions in so
doing shall be final and conclusive.
(8) No adjustment in the conversion price shall be required
unless such adjustment would require an increase or decrease of at least one
percent in such conversion price; provided, however, that any adjustments which
by reason of this paragraph (8) is not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article shall be made to the nearest cent or to the nearest 1/100 of
a share, as the case may be.
Section 1405. Notice of Adjustments of Conversion Price.
Whenever the conversion price is adjusted as herein provided:
(a) the Company shall compute the adjusted conversion price
in accordance with Section 1404 and shall prepare a certificate signed
by the Treasurer of the Company setting forth the adjusted conversion
price and showing in reasonable detail the facts upon which
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such adjustment is based, and such certificate shall forthwith be
filed at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 1002; and
(b) a notice stating that the conversion price has been
adjusted and setting forth the adjusted conversion price shall
forthwith be required, and as soon as practicable after it is
required, such notice shall be mailed by the Company to all Holders at
their last addresses as they shall appear in the Security Register.
Section 1406. Notice of Certain Corporate Action.
In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable otherwise than in cash out
of its earned surplus; or
(b) the Company shall authorize the granting to the holders
of its Common Stock of rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any other rights; or
(c) of any reclassification of the Common Stock of the
Company (other than a subdivision or combination of its outstanding
shares of Common Stock), or of any consolidation, merger or share
exchange to which the Company is a party and for which approval of any
stockholders of the Company is required, or of the sale or transfer of
all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall cause to be filed at each office or agency maintained
for the purpose of conversion of Securities pursuant to Section 1002, and shall
cause to be mailed to all Holders at their last addresses as they shall appear
in the Security Register, at least 20 days (or 10 days in any case specified in
clause (a) or (b) above) prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, rights or warrants, or,
if a record is not to be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend, distribution, rights or
warrants are to be
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determined, or (y) the date on which such reclassification, consolidation,
merger, share exchange, sale, transfer, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, share exchange, sale, transfer,
dissolution, liquidation or winding up. Neither the failure to give such
notice nor any defect therein shall affect the legality or validity of the
proceedings described in clauses (a) through (d) of this Section 1406. If at
the time the Trustee shall not be the conversion agent, a copy of such notice
shall also forthwith be filed by the Company with the Trustee.
Not less than seven days prior to the Distribution Date (as
defined in Section 1404(4)), the Company shall cause to be filed at each office
or agency maintained for the purpose of conversion of Securities pursuant to
Section 1002, and shall cause to be mailed to all Holders at their last
addresses as they shall appear in the Security Register, a notice stating the
date on which the Distribution Date is to occur, and briefly describing the
import thereof. Neither the failure to give such notice nor any defect therein
shall affect the legality or validity of the proceedings described in the
Rights Agreement (as defined in Section 1404(4)). If at the time the Trustee
shall not be the conversion agent, a copy of such notice shall also forthwith
be filed by the Company with the Trustee.
Section 1407. Company to Reserve Common Stock.
The Company shall at all times reserve and keep available out
of its authorized but unissued Common Stock, for the purpose of effecting the
conversion of Securities, the full number of shares of Common Stock then
issuable upon the conversion of all Outstanding Securities.
Section 1408. Taxes on Conversions.
The Company will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Securities pursuant hereto. The Company shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue
and delivery of shares of Common Stock in a name other than that of the Holder
of the Security or Securities to be converted, and no such issue or delivery
shall be made
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unless and until the Person requesting such issue has paid to the Company the
amount of any such tax, or has established to the satisfaction of the Company
that such tax has been paid.
Section 1409. Covenant as to Common Stock.
The Company covenants that all shares of Common Stock which
may be issued upon conversion of Securities will upon issue be fully paid and
nonassessable and, except as provided in Section 1408, the Company will pay all
taxes, liens and charges with respect to the issue thereof.
Section 1410. Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered to
the Trustee to be cancelled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 309.
Section 1411. Provisions in Case of Consolidation, Merger or Sale of Assets.
In case of any consolidation of the Company with, or merger of
the Company into, any other Person, any merger of another Person into the
Company (other than a merger which does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock of
the Company) or any sale or transfer of all or substantially all of the assets
of the Company, the Person formed by such consolidation or resulting from such
merger or which acquires such assets, as the case may be, shall execute and
deliver to the Trustee a supplemental indenture providing that the Holder of
each convertible Security then outstanding shall have the right thereafter,
during the period such Security shall be convertible as specified in Section
1401, to convert such Security only into the kind and amount of securities,
cash and other property receivable upon such consolidation, merger, sale or
transfer by a holder of the number of shares of Common Stock of the Company
into which such Security might have been converted immediately prior to such
consolidation, merger, sale or transfer, assuming such holder of Common Stock
of the Company failed to exercise his rights of election, if any, as to the
kind or amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer (provided that if the kind or amount of
securities, cash and other property receivable upon such consolidation,
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merger, sale or transfer is not the same for each share of Common Stock of the
Company in respect of which such rights of election shall not have been
exercised ("non-electing share"), then for the purpose of this Section the kind
and amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer by each non-electing share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares). Such supplemental indenture shall provide for
adjustments which, for events subsequent to the effective date of such
supplemental indenture, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Article. The above provisions of this
Section shall similarly apply to successive consolidations, mergers, sales or
transfers.
Section 1412. Responsibility of Trustee.
Neither the Trustee nor any conversion agent shall at any time
be under any duty or responsibility to any Holder of Securities to determine
whether any fact exists which may require any adjustment of the conversion
price, or with respect to the nature or extent of any such adjustment when
made, or with respect to the method employed, or herein or in any supplemental
indenture provided to be employed, in making the same. Neither the Trustee nor
any conversion agent shall be accountable with respect to the registration,
validity or value (or the kind or amount) of any shares of Common Stock, or of
any securities or property, which may at any time be issued or delivered upon
the conversion of any Security; and neither the Trustee nor any conversion
agent makes any representation with respect thereto. Neither the Trustee nor
any conversion agent shall be responsible for any failure of the Company to
issue or transfer or deliver any Common Stock or stock certificates or other
securities or property or to make any cash payment upon the surrender of any
Security for the purpose of conversion or to comply with any of the covenants
of the Company contained in this Article Fourteen.
ARTICLE FIFTEEN
Subordination of Securities
Section 1501. Securities Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a
Security, by his acceptance thereof, likewise covenants
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and agrees, that, to the extent and in the manner hereinafter set forth in this
Article, the indebtedness represented by the Securities and the payment of the
principal of (and premium, if any) and interest on each and all of the
Securities are hereby expressly made subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness.
Section 1502. Payment Over of Proceeds Upon Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to the Company or to its
creditors, as such, or to its assets, or (b) any liquidation, dissolution or
other winding up of the Company, whether voluntary or involuntary and whether
or not involving insolvency or bankruptcy, or (c) any assignment for the
benefit of creditors or any other marshalling of assets and liabilities of the
Company, then and in any such event the holders of Senior Indebtedness shall be
entitled to receive payment in full of all amounts due or to become due on or
in respect of all Senior Indebtedness, or provision shall be made for such
payment in money or money's worth, before the Holders of the Securities are
entitled to receive any payment on account of principal of (or premium, if any)
or interest on the Securities, and to that end the holders of Senior
Indebtedness shall be entitled to receive, for application to the payment
thereof, any payment or distribution of any kind or character, whether in cash,
property or securities, which may be payable or deliverable in respect of the
Securities in any such case, proceeding, dissolution, liquidation or other
winding up or event.
In the event that, notwithstanding the foregoing provisions of
this Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, before all Senior Indebtedness is paid
in full or payment thereof provided for, and if such fact shall, at or prior to
the time of such payment or distribution, have been made known to the Trustee
or, as the case may be, such Holder, then and in such event such payment or
distribution shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other
Person making payment or distribution of assets of the Company for application
to the payment of all Senior Indebtedness remaining unpaid, to the extent
necessary to
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pay all Senior Indebtedness in full, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness.
For purposes of this Article only, the words "cash, property
or securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment which are
subordinated in right of payment to all Senior Indebtedness which may at the
time be outstanding to substantially the same extent as, or to a greater extent
than, the Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the
conveyance or transfer of its properties and assets substantially as an
entirety to another Person upon the terms and conditions set forth in Article
Eight shall not be deemed a dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling of
assets and liabilities of the Company for the purposes of this Section if the
Person formed by such consolidation or into which the Company is merged or
which acquires by conveyance or transfer such properties and assets
substantially as an entirety, as the case may be, shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions set
forth in Article Eight.
Section 1503. Prior Payment to Senior Indebtedness Upon Acceleration of
Securities.
In the event that any Securities are declared due and payable
before their Stated Maturity, then and in such event the holders of Senior
Indebtedness outstanding at the time such Securities so become due and payable
shall be entitled to receive payment in full of all amounts due or to become
due on or in respect of such Senior Indebtedness, or provision shall be made
for such payment in money or money's worth, before the Holders of the
Securities are entitled to receive any payment by the Company on account of the
principal of (or premium, if any) or interest on the Securities or on account
of the purchase or other acquisition of Securities; provided, however, that
nothing in this Section shall prevent the satisfaction of any sinking fund
payment in accordance with Article Twelve by delivering and crediting pursuant
to Section 1202 Securities which have been acquired (upon redemption or
otherwise)
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prior to such default or which have been converted pursuant to Article
Fourteen.
In the event that, notwithstanding the foregoing, the Company
shall make any payment to the Trustee or the Holder of any Security prohibited
by the foregoing provisions of this Section, and if such fact shall, at or
prior to the time of such payment, have been made known to the Trustee or, as
the case may be, such Holder, then and in such event such payment shall be paid
over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment
with respect to which Section 1502 would be applicable.
Section 1504. No Payment When Senior Indebtedness in Default.
(a) In the event and during the continuation of any default
in the payment of principal of (or premium, if any) or interest on any Senior
Indebtedness beyond any applicable grace period with respect thereto, or in the
event that any event of default with respect to any Senior Indebtedness shall
have occurred and be continuing and shall have resulted in such Senior
Indebtedness becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, unless and until such
event of default shall have been cured or waived or shall have ceased to exist
and such acceleration shall have been rescinded or annulled, or (b) in the
event any judicial proceeding shall be pending with respect to any such default
in payment or event of default, then no payment shall be made by the Company on
account of principal of (or premium, if any) or interest on the Securities or
on account of the purchase or other acquisition of Securities; provided,
however, that nothing in this Section shall prevent the satisfaction of any
sinking fund payment in accordance with Article Twelve by delivering and
crediting pursuant to Section 1202 Securities which have been acquired (upon
redemption or otherwise) prior to such default or which have been converted
pursuant to Article Fourteen.
In the event that, notwithstanding the foregoing, the Company
shall make any payment to the Trustee or the Holder of any Security prohibited
by the foregoing provisions of this Section, and if such fact shall, at or
prior to the time of such payment, have been made known to the Trustee or, as
the case may be, such Holder, then and in
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such event such payment shall be paid over and delivered forthwith to the
Company.
The provisions of this Section shall not apply to any payment
with respect to which Section 1502 would be applicable.
Section 1505. Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in this
Indenture or in any of the Securities shall prevent the Company, at any time
except during the pendency of any case, proceeding, dissolution, liquidation or
other winding up, assignment for the benefit of creditors or other marshalling
of assets and liabilities of the Company referred to in Section 1502 or under
the conditions described in Section 1503 or 1504, from making payments at any
time of principal of (and premium, if any) or interest on the Securities.
Section 1506. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the
Holders of the Securities shall be subrogated (equally and ratably with the
holders of all indebtedness of the Company which by its express terms is
subordinated to indebtedness of the Company to substantially the same extent as
the Securities are subordinated and is entitled to like rights of subrogation)
to the rights of the holders of such Senior Indebtedness to receive payments
and distributions of cash, property and securities applicable to the Senior
Indebtedness until the principal of (and premium, if any) and interest on the
Securities shall be paid in full. For purposes of such subrogation, no
payments or distributions to the holders of the Senior Indebtedness of any
cash, property or securities to which the Holders of the Securities or the
Trustee would be entitled except for the provisions of this Article, and no
payments over pursuant to the provisions of this Article to the holders of
Senior Indebtedness by Holders of the Securities or the Trustee, shall, as
among the Company, its creditors other than holders of Senior Indebtedness and
the Holders of the Securities, be deemed to be a payment or distribution by the
Company to or on account of the Senior Indebtedness.
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Section 1507. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for
the purpose of defining the relative rights of the Holders of the Securities on
the one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities
is intended to or shall (a) impair, as among the Company, its creditors other
than holders of Senior Indebtedness and the Holders of the Securities, the
obligation of the Company, which is absolute and unconditional (and which,
subject to the rights under this Article of the holders of Senior Indebtedness,
is intended to rank equally with all other general obligations of the Company),
to pay to the Holders of the Securities the principal of (and premium, if any)
and interest on the Securities as and when the same shall become due and
payable in accordance with their terms; or (b) affect the relative rights
against the Company of the Holders of the Securities and creditors of the
Company other than the holders of Senior Indebtedness; or (c) prevent the
Trustee or the Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article of the holders of Senior Indebtedness to
receive cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder.
Section 1508. Trustee to Effectuate Subordination.
Each holder of a Security by his acceptance thereof authorizes
and directs the Trustee on his behalf to take such action as may be necessary
or appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes.
Section 1509. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any non-compliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof any such
holder may have or be otherwise charged with.
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Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
or the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Indebtedness, or otherwise amend or supplement in any manner
Senior Indebtedness or any instrument evidencing the same or any agreement
under which Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of Senior Indebtedness; and (iv) exercise or refrain from exercising
any rights against the Company and any other Person.
Section 1510. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of
any fact known to the Company which would prohibit the making of any payment to
or by the Trustee in respect of the Securities. Notwithstanding the provisions
of this Article or any other provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts which would prohibit
the making of any payment to or by the Trustee in respect of the Securities,
unless and until the Trustee shall have received written notice thereof from
the Company or a holder of Senior Indebtedness or from any trustee therefor;
and, prior to the receipt of any such written notice, the Trustee, subject to
the provisions of Section 601, shall be entitled in all respects to assume that
no such facts exist; provided, however, that if the Trustee shall not have
received the notice provided for in this Section at least three Business Days
prior to the date upon which by the terms hereof any money may become payable
for any purpose (including, without limitation, the payment of the principal of
(and premium, if any) or interest on any Security), then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power
and authority to receive such money and to apply the same to the purpose for
which such money was received and shall not be affected by any notice to the
contrary which may be received by it within three Business Days prior to such
date.
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<PAGE> 114
Subject to the provisions of Section 601, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee therefor). In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of
any Person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if such evidence
is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.
Section 1511. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee, subject to the provisions of Section
601, and the Holders of the Securities shall be entitled to rely upon any order
or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution,
winding up or similar case or proceeding is pending, or a certificate of the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for
the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of Securities, for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this
Article.
Section 1512. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness and shall not be liable to any such holders
if it shall in good faith mistakenly pay over or distribute to Holders of
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<PAGE> 115
Securities or to the Company or to any other Person cash, property or
securities to which any holders of Senior Indebtedness shall be entitled by
virtue of this Article or otherwise.
Section 1513. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article with respect to any Senior
Indebtedness which may at any time be held by it, to the same extent as any
other holder of Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 607.
Section 1514. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying
Agent within its meaning as fully for all intents and purposes as if such
Paying Agent were named in this Article in addition to or in place of the
Trustee; provided, however, that Section 1513 shall not apply to the Company or
any Affiliate of the Company if it or such Affiliate acts as Paying Agent.
Section 1515. Certain Conversions Deemed Payment.
For the purposes of this Article only, (1) the issuance and
delivery of junior securities upon conversion of Securities in accordance with
Article Fourteen shall not be deemed to constitute a payment or distribution on
account of the principal of or premium or interest on Securities or on account
of the purchase or other acquisition of Securities, and (2) the payment,
issuance or delivery of cash, property or securities (other than junior
securities) upon conversion of a Security shall be deemed to constitute payment
on account of the principal of such Security. For the purposes of this
Section, the term "junior securities" means (a) shares of any stock of any
class of the Company and (b) securities of the Company which are subordinated
in
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<PAGE> 116
right of payment to all Senior Indebtedness which may be outstanding at the
time of issuance or delivery of such securities to substantially the same
extent as, or to a greater extent than, the Securities are so subordinated as
provided in this Article. Nothing contained in this Article or elsewhere in
this Indenture or in the Securities is intended to or shall impair, as among
the Company, its creditors other than holders of Senior Indebtedness and the
Holders of the Securities, the right, which is absolute and unconditional, of
the Holder of any Security to convert such Security in accordance with Article
Fourteen.
Section 1516. Trust Moneys Not Subordinated.
Notwithstanding anything contained herein to the contrary,
payments from moneys or the proceeds of U.S. Government Obligations held in
trust under Article Thirteen by the Trustee for the payment of principal of,
premium, if any, and interest on the Securities from the date of deposit (if
made in compliance with this Indenture) shall not be subordinated to the prior
payment of any Senior Indebtedness or subject to the restraints set forth in
this Article, and none of the Securityholders shall be obligated to pay over
any such amount to the Company or any holder of Senior Indebtedness of the
Company or any other creditor of the Company.
__________________
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.
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<PAGE> 117
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.
AMERICAN HEALTH PROPERTIES, INC.
By
------------------------------
Attest:
------------------------
------------------------------
By
------------------------------
Attest:
------------------------
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<PAGE> 118
STATE OF COLORADO )
) ss.:
COUNTY OF ARAPAHOE )
On the ____ day of __________, 199_, before me personally came
___________________________, to me known, who, being by me duly sworn, did
depose and say that he is ____________________ of American Health Properties,
Inc., one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation, and that he signed his name
thereto by like authority.
------------------------
STATE OF __________)
) ss.:
COUNTY OF _________)
On the ____ day of __________, 199_, before me personally came
___________________________, to me known, who, being by me duly sworn, did
depose and say that he is ____________________ of
_________________________________, one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
------------------------
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<PAGE> 1
Draft of July 11, 1995
CERTIFICATE OF DESIGNATIONS
OF THE
_____% PREFERRED STOCK, SERIES __
(Par Value $1.00 Per Share)
OF
AMERICAN HEALTH PROPERTIES, INC.
----------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
----------
The undersigned duly authorized officer of American Health
Properties, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Company"), in accordance with
the provisions of Section 103 thereof, and pursuant to Section 151 thereof,
DOES HEREBY CERTIFY:
That the Certificate of Incorporation of the Company provides
that the Company is authorized to issue 1,000,000 shares of Preferred Stock,
par value $0.01 per share, issuable in series by the Board. As of June 30,
1995, the Company had [210,000] shares of Psychiatric Group Stock, which
constitute a separate series of Preferred Stock, issued and outstanding. In
addition, the Company has authorized and reserved for issuance approximately
232,000 Series A Preferred Shares. Such shares are the only shares of
Psychiatric Group Stock authorized by the Board to be issued, except shares of
Psychiatric Group Stock issuable upon exercise of options granted in connection
with the initial issuance of shares of Psychiatric Group Stock. Such shares
are the only shares of Psychiatric Group Stock authorized by the Board to be
issued, except shares of Psychiatric Group Stock issuable upon exercise of
options granted in connection with the initial issuance of shares of
Psychiatric Group Stock; and
That pursuant to the authority conferred upon the Board of
Directors (the "Board") by the Certificate of Incorporation of the Company, the
Board on __________ __, 199_, approved the creation, issuance and the voting
powers of shares of Preferred Stock to be issued in one or more series as
determined by a duly authorized committee of the Board, and, on
____________________, 199_ such duly
<PAGE> 2
authorized committee of the Board adopted the following resolution creating a
series of ____________________ shares of Preferred Stock designated as set
forth below:
RESOLVED, that pursuant to the authority expressly granted to
and vested in the Board by provisions of the Certificate of Incorporation of
the Company, as amended (the "Certificate of Incorporation"), and the General
Corporation Law of the State of Delaware, the issuance of a series of Preferred
Stock, which shall consist of ____________________ shares of the 790,000 shares
of Preferred Stock which the Company now has authority to issue, be, and the
same hereby is, authorized, and this committee of the Board hereby fixes the
powers, designations, preferences and relative, participating, optional or
other special rights, and the qualifications, limitations or restrictions
thereof, of the shares of such series (in addition to the powers, designations,
preferences and relative, participating, optional or other special rights, and
the qualifications, limitations or restrictions thereof, set forth in the
Certificate of Incorporation which may be applicable to the Preferred Stock)
authorized by this resolution as follows:
1. Designation and Rank. The designation of such series
of Preferred Stock authorized by this resolution shall be _____% Preferred
Stock, Series __ (the "Series __ Preferred Stock"). The maximum number of
shares of Series __ Preferred Stock shall be ____________________. Shares of
the Series __ Preferred Stock shall have a liquidation preference of [$50.00]
per share. The Series __ Preferred Stock shall rank prior to the Company's
Common Stock and to all other classes and series of equity securities of the
Company now or hereafter authorized, issued or outstanding (the Common Stock
and such other classes and series of equity securities collectively may be
referred to herein as the "Junior Stock"), other than any classes or series of
equity securities of the Company ranking on a parity with (the "Parity Stock")
or senior to (the "Senior Stock") the Series __ Preferred Stock as to dividend
rights and rights upon liquidation, winding up or dissolution of the Company.
The Series __ Preferred Stock shall be junior to all outstanding debt of the
Company. The Series __ Preferred Stock shall be senior to the Series A
Preferred Stock as to both payments of dividends and distribution of assets
upon liquidation, dissolution and winding up of the Company. The Series __
Preferred Stock shall be subject to creation of Senior Stock, Parity Stock and
Junior Stock to the extent not expressly prohibited by the Company's
Certificate of Incorporation.
2. Cumulative Dividends; Priority.
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<PAGE> 3
(a) Payment of Dividends. The holders of record of
shares of Series __ Preferred Stock shall be entitled to receive, when, as, and
if declared by the Board, out of funds legally available therefor, cumulative
cash dividends at the rate of _____% per annum per share, which shall accrue
from the original issue date and be payable quarterly in arrears on the first
day of [March, June, September and December] in each year, commencing on
____________________, 19__, or, if such day is a non-business day, on the next
business day (each of such dates, a "Dividend Payment Date"). Each declared
dividend shall be payable to holders of record as they appear on the stock
books of the Company at the close of business on such record dates, not more
than 60 calendar days preceding the payment dates therefor, as are determined
by the Board or a duly authorized committee thereof (each of such dates, a
"Record Date"). Quarterly dividend periods (each a "Dividend Period") shall
commence on and include the first day of [March, June, September and December]
of each year and shall end on and include the date next preceding the next
following Dividend Payment Date.
The amount of dividends payable per share for each
full Dividend Period shall be computed by dividing by four the amount
determined by applying the _____% annual dividend rate to the [$50.00]
liquidation preference of such share. Dividends on the Series __ Preferred
Stock shall accrue day by day. Dividends shall be cumulative. The initial
quarterly dividend payable on ____________________, 19__ and the amount of any
dividend payable for any other period shorter than a full Dividend Period shall
be computed on the basis of a 360-day year composed of twelve 30-day months and
the actual number of days elapsed in such period.
(b) Priority as to Dividends. No full dividends
shall be declared or paid or set apart for payment on Preferred Stock of any
series ranking, as to dividends, on a parity with or junior to the Series __
Preferred Stock for any period unless full dividends for the immediately
preceding Dividend Period on the Series __ Preferred Stock (including any
accumulation in respect of unpaid dividends from prior Dividend Periods) have
been or contemporaneously are declared and paid (or declared and a sum
sufficient for the payment thereof set apart for such payment). When dividends
are not paid in full (or declared and a sum sufficient for such full payment is
not so set apart) upon the Series __ Preferred Stock and any other Preferred
Stock ranking on a parity as to dividends with the Series __ Preferred Stock,
dividends declared upon shares of Series __ Preferred Stock and such other
Preferred Stock ranking on a parity as to dividends shall be declared pro rata,
so that
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<PAGE> 4
the amount of dividends declared per share on the Series __ Preferred Stock and
such other Preferred Stock shall bear in all cases to each other the same ratio
that accrued dividends for the then-current Dividend Period per share on the
shares of Series __ Preferred Stock (including any accumulation in respect of
unpaid dividends for prior Dividend Periods) and accrued dividends, including
required or permitted accumulations, if any, of such other Preferred Stock,
bear to each other.
Unless full dividends on the Series __ Preferred
Stock have been declared and paid or set apart for payment for the immediately
preceding Dividend Period (including any accumulation in respect of unpaid
dividends for prior Dividend Periods) (i) no cash dividend or other
distribution (other than in shares of Junior Stock) shall be declared or paid
or set aside for payment on the Junior Stock, (ii) the Company may not,
directly or indirectly, repurchase, redeem or otherwise acquire any shares of
its Junior Stock (or any moneys paid to or made available for a sinking fund
for the redemption of any shares except by conversion into or exchange for
Junior Stock) and (iii) the Company may not, directly or indirectly,
repurchase, redeem or otherwise acquire any shares of Series __ Preferred Stock
or Parity Stock (or any moneys paid to or made available for a sinking fund for
the redemption of any shares of any such stock) otherwise than pursuant to a
pro rata offer to purchase or a concurrent redemption of all, or a pro rata
portion, of the outstanding shares of Series __ Preferred Stock and Parity
Stock (except by conversion into or exchange for Junior Stock).
The Company shall not permit any subsidiary of the
Company to purchase or otherwise acquire for consideration any shares of stock
of the Company if, under the preceding paragraph, the Company would be
prohibited from purchasing or otherwise acquiring such shares at such time and
in such manner.
3. Redemption.
[(a) General. The shares of the Series __ Preferred
Stock will not be redeemable prior to ____________________, 19__. At any time
on or after ____________________, 19__, subject to the applicable restrictions
set forth in this Section 3 and applicable law, the shares of Series __
Preferred Stock may be redeemed, in whole or in part, at the election of the
Company, upon notice as provided in Section 3(b) hereof, by resolution of its
Board of Directors, at any time or from time to time, at the redemption price
of [$50.00] per share, plus, in each
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<PAGE> 5
case, an amount equal to all accrued and unpaid dividends to the date fixed for
redemption.]
If less than all the outstanding shares of Series __
Preferred Stock are to be redeemed, the Company will select those to be
redeemed pro rata, by lot or by a substantially equivalent method. On and
after the redemption date, dividends shall cease to accrue on the shares of
Series __ Preferred Stock called for redemption, and they shall be deemed to
cease to be outstanding, provided that the redemption price (including any
accrued and unpaid dividends to the date fixed for redemption) has been duly
paid or provided for.
(b) Notice of Redemption. Notice of any
redemption, setting forth (i) the date and place fixed for said redemption,
(ii) the redemption price and (iii) a statement that dividends on the shares of
Series __ Preferred Stock to be redeemed will cease to accrue on such
redemption date shall be mailed, postage prepaid, at least 30 days but not more
than 60 days prior to said redemption date to each holder of record of the
Series __ Preferred Stock to be redeemed at his address as the same shall
appear on the books of the Company. If less than all the shares of the Series
__ Preferred Stock owned by such holder are then to be redeemed, the notice
shall specify the number of shares thereof which are to be redeemed and the
numbers of the certificates representing such shares.
If such notice of redemption shall have been so
mailed, and if on or before the redemption date specified in such notice all
funds necessary for such redemption shall have been set aside by the Company
separate and apart from its other funds in trust for the account of the holders
of the shares of the Series __ Preferred Stock so to be redeemed (so as to be
and continue to be available therefor), then, on and after said redemption
date, notwithstanding that any certificate for shares of the Series __
Preferred Stock so called for redemption shall not have been surrendered for
cancellation, the shares of the Series __ Preferred Stock so called for
redemption shall be deemed to be no longer outstanding, the dividends thereon
shall cease to accrue, and all rights with respect to such shares of the Series
__ Preferred Stock so called for redemption shall forthwith cease and
terminate, except only the right of the holders thereof to receive out of the
funds so set aside in trust the amount payable on redemption thereof, but
without interest, upon surrender (and endorsement or assignment for transfer,
if required by the Company) of their certificates.
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<PAGE> 6
However, if such notice of redemption shall have been
so mailed, and if prior to the date of redemption specified in such notice all
said funds necessary for such redemption shall have been irrevocably deposited
in trust for the account of the holders of the shares of the Series __
Preferred Stock to be redeemed (so as to be and continue to be available
therefor) with a bank or trust company named in such notice doing business in
the City of New York or the State of Colorado and having capital surplus and
undivided profits of at least $50,000,000, thereupon and without awaiting the
redemption date, all shares of the Series __ Preferred Stock with respect to
which such notice shall have been so mailed and such deposit shall have been so
made shall be deemed to be no longer outstanding, and all rights with respect
to such shares of the Series __ Preferred Stock shall forthwith upon such
deposit in trust cease and terminate, except only the right of the holders
thereof on or after the redemption date to receive from such deposit the amount
payable upon the redemption, but without interest, upon surrender (and
endorsement or assignment to transfer, if required by the Company) of their
certificates.
In case the holders of shares of the Series __
Preferred Stock which shall have been redeemed shall not within two years (or
any longer period if required by law) after the redemption date claim any
amount so deposited in trust for the redemption of such shares, such bank or
trust company shall, upon demand and if permitted by applicable law, pay over
to the Company any such unclaimed amount so deposited with it, and shall
thereupon be relieved of all responsibility in respect thereof, and thereafter
the holders of such shares shall, subject to applicable escheat laws, look only
to the Company for payment of the redemption price thereof, but without
interest from the date of redemption.
(c) Status of Shares Redeemed. Shares of Series
__ Preferred Stock redeemed, purchased or otherwise acquired for value by the
Company, shall, after such acquisition, have the status of authorized and
unissued shares of Preferred Stock and may be reissued by the Company at any
time as shares of any series of Preferred Stock other than as shares of Series
__ Preferred Stock.
4. Voting Rights.
The voting rights of the Series __ Preferred Stock shall be
those voting rights established by resolution of the Board adopted __________
__, 199_, which established such rights as follows:
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<PAGE> 7
"(a) General Voting Rights. Except as expressly
provided hereinafter in this Section, or as otherwise from time to time
required by applicable law, this Series of Preferred Stock shall have no voting
rights.
(b) Voting Rights Upon Dividend Arrears.
(i) Right to Elect Directors. In the event
that an amount equal to six quarterly dividend payments on this Series
of Preferred Stock shall have accrued and be unpaid, the holders of
this Series of Preferred Stock shall have the right, voting separately
as a class together with holders of shares of any Parity Stock upon
which like voting rights have been conferred and are exercisable
("Voting Parity Stock"), to elect two members of the Board of
Directors, each member to be in addition to the then authorized number
of directors, at the next annual meeting of stockholders and
thereafter until dividends on this Series of Preferred Stock have been
paid in full for four consecutive Dividend Periods, including the last
preceding Dividend Period.
(ii) Term of Office of Directors. Any
director who shall have been elected by holders of this Series of
Preferred Stock and Voting Parity Stock entitled to vote in accordance
with this subparagraph (b) shall hold office for a term expiring
(subject to the earlier payment, or declaration and setting aside for
payment, of dividends on this Series of Preferred Stock for four
consecutive Dividend Periods as described below) at the next annual
meeting of stockholders and during such term may be removed at any
time, either for or without cause, by, and only by, the affirmative
vote of the holders of record of a majority of the shares of this
Series of Preferred Stock and Voting Parity Stock present and voting,
in person or by proxy, at a special meeting of such stockholders
called for such purpose, and any vacancy created by such removal may
also be filled at such meeting. A meeting for the removal of a
director elected by the holders of this Series of Preferred Stock and
Voting Parity Stock and the filling of the vacancy created thereby
shall be called by the Secretary of the Company as promptly as
possible and in any event within 10 days after receipt of a request
therefor signed by the holders of not less than 25% of the outstanding
shares of this Series of Preferred Stock, subject to any applicable
notice requirements imposed by law or regulation. Such meeting shall
be held at the earliest practicable date thereafter, provided that no
such meeting shall be
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<PAGE> 8
required to be held during the 90-day period preceding the date fixed
for the annual meeting of stockholders.
Upon payment, or declaration and setting
aside for payment, of dividends on this Series of Preferred Stock for
four consecutive Dividend Periods the terms of office of all directors
elected by the holders of the shares of this Series of Preferred Stock
and the Voting Parity Stock pursuant thereto then in office shall,
without further action, thereupon terminate unless otherwise required
by law. Upon such termination the number of directors constituting
the Board of Directors of the Company shall, without further action,
be reduced by two, subject always to the increase of the number of
directors pursuant to the foregoing provisions in the case of the
future right of holders of the shares of this Series of Preferred
Stock and Voting Parity Stock to elect directors as provided above.
(iii) Vacancies. Any vacancy caused by the
death or resignation of a director who shall have been elected in
accordance with this subparagraph (b) may be filled by the remaining
director so elected or, if not so filled, by a vote of holders of a
plurality of the shares of this Series of Preferred Stock and Voting
Parity Stock present and voting, in person or by proxy, at a meeting
called for such purpose. Unless such vacancy shall have been filled
by the remaining director as aforesaid, such meeting shall be called
by the Secretary of the Company at the earliest practicable date after
such death or resignation, and in any event within 10 days after
receipt of a written request signed by the holders of record of at
least 25% of the outstanding shares of this Series of Preferred Stock,
subject to any applicable notice requirements imposed by law or
regulation. Notwithstanding the provisions of this paragraph, no such
special meeting shall be required to be held during the 90-day period
preceding the date fixed for the annual meeting of stockholders.
(iv) Stockholders' Right to Call Meeting.
If any meeting of the holders of this Series of Preferred Stock and
Voting Parity Stock required by this subparagraph (b) to be called
shall not have been called within 30 days after personal service of a
written request therefor upon the Secretary of the Company or within
30 days after mailing the same within the United States of America by
registered mail addressed to the Secretary of the
-8-
<PAGE> 9
Company at its principal executive offices, subject to any applicable
notice requirements imposed by law or regulation, then the holders of
record of at least 25% of the outstanding shares of this Series of
Preferred Stock may designate in writing one of their number to call
such meeting at the expense of the Company, and such meeting may be
called by such person so designated upon the notice required for
annual meetings of stockholders or such shorter notice (but in no
event shorter than permitted by law or regulation) as may be
acceptable to the holders of a majority of the total number of shares
of this Series of Preferred Stock. Any holder of this Series of
Preferred Stock so designated shall have access to the Preferred Stock
books of the Company for this Series of Preferred Stock for the
purpose of causing such meeting to be called pursuant to these
provisions.
(v) Quorum. At any meeting of the holders
of this Series of Preferred Stock called in accordance with the
provisions of this subparagraph (b) for the election or removal of
directors, the presence in person or by proxy of the holders of a
majority of the total number of shares of this Series of Preferred
Stock and Voting Parity Stock shall be required to constitute a
quorum; in the absence of a quorum, a majority of the holders present
in person or by proxy shall have power to adjourn the meeting from
time to time without notice other than an announcement at the meeting,
until a quorum shall be present.
(c) Voting Rights on Extraordinary Matters. So
long as any shares of this Series of Preferred Stock shall be outstanding and
unless the consent or approval of a greater number of shares shall then be
required by law, without first obtaining the approval of the holders of at
least two-thirds of the number of shares of this Series of Preferred Stock at
the time outstanding (voting separately as a class together with the holders of
shares (on a one vote per share basis) of Voting Parity Stock) given in person
or by proxy at a meeting at which the holders of such shares shall be entitled
to vote separately as a class, the Company shall not either directly or
indirectly or through merger or consolidation with any other company, (i)
authorize, create or issue, or increase the authorized or issued amount, of any
class or series of stock ranking prior to the shares of this Series of
Preferred Stock in rights and preferences or (ii) approve any amendment to (or
otherwise alter or repeal) its Certificate of Incorporation (or this
resolution) which would materially and adversely change the specific terms of
this Series of Preferred Stock.
-9-
<PAGE> 10
An amendment which increases the number of authorized shares of any class or
series of Preferred Stock or authorizes the creation or issuance of other
classes or series of Preferred Stock, in each case ranking junior to or on a
parity with this Series of Preferred Stock with respect to the payment of
dividends and distribution of assets upon liquidation, dissolution or winding
up, or substitutes the surviving entity in a merger or consolidation,
reorganization or other business combination for the Company, shall not be
considered to be such an adverse change.
(d) One Vote Per Share. In connection with any
matter on which holders of this Series of Preferred Stock are entitled to vote
as provided in paragraphs (b) and (c) of this Section, or any matter on which
the holders of this Series of Preferred Stock are entitled to vote as one class
or otherwise pursuant to law or the provisions of the Certificate of
Incorporation, each holder of this Series of Preferred Stock shall be entitled
to one vote for each share of this Series of Preferred Stock held by such
holder."
5. No Sinking Fund. No sinking fund will be established
for the retirement or redemption of shares of Series __ Preferred Stock.
6. Liquidation Rights; Priority.
(a) In the event of any liquidation, dissolution or
winding up of the affairs of the Company, whether voluntary or involuntary,
after payment or provision for payment of the debts and other liabilities of
the Company, the holders of shares of the Series __ Preferred Stock shall be
entitled to receive, out of the assets of the Company, whether such assets are
capital or surplus and whether or not any dividends as such are declared,
[$50.00] per share plus an amount equal to all accrued and unpaid dividend for
prior Dividend Periods, and no more, before any distribution shall be made to
the holders of the Common Stock or any other class of stock or series thereof
ranking junior to the Series __ Preferred Stock with respect to the
distribution of assets. After payment of the full amount of the liquidation
preference, the holders of shares of the Series __ Preferred Stock shall not be
entitled to any further participation.
(b) Nothing contained in this Section 6 shall be
deemed to prevent redemption of shares of the Series __ Preferred Stock by the
Company in the manner provided in Section 3. Neither the merger nor
consolidation of the Company into or with any other company, nor the merger or
consolidation of any other company into or with
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<PAGE> 11
the Company, nor a sale, transfer or lease of all or any part of the assets of
the Company, shall be deemed to be a liquidation, dissolution or winding up of
the Company within the meaning of this Section 6.
(c) Written notice of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company, stating a
payment date and the place where the distributable amounts shall be payable,
shall be given by mail, postage prepaid, no less than 30 days prior to the
payment date stated therein, to the holders of record of the Series __
Preferred Stock at their respective addresses as the same shall appear on the
books of the Company.
(d) If the amounts available for distribution with
respect to the Series __ Preferred Stock and all other outstanding stock of the
Company ranking on a parity with the Series __ Preferred Stock upon liquidation
are not sufficient to satisfy the full liquidation rights of all the
outstanding Series __ Preferred Stock and stock ranking on a parity therewith,
then the holders of each series of such stock will share ratably in any such
distribution of assets in proportion to the full respective preferential amount
(which in the case of Preferred Stock may include accumulated dividends) to
which they are entitled.
IN WITNESS WHEREOF, American Health Properties, Inc. has
caused this Certificate to be signed by ____________________, its [President],
and attested by ____________________, its [Secretary], this _____ day of
____________________, 199_.
AMERICAN HEALTH PROPERTIES, INC.
By: _________________________
[Name and Title]
Attest:
_________________________
[Name and Title]
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<PAGE> 1
Draft of July 11, 1995
DEPOSIT AGREEMENT
DATED AS OF ____________________, 19__
AMONG
AMERICAN HEALTH PROPERTIES, INC.
A DELAWARE CORPORATION,
____________________, A [NATIONAL BANKING ASSOCIATION],
AND THE HOLDERS
FROM TIME TO TIME OF THE DEPOSITARY SHARES
DESCRIBED HEREIN.
WHEREAS it is desired to provide, as hereinafter set forth in this
Deposit Agreement, for the deposit of shares of _____% Preferred Stock, Series
__, $1.00 par value, of AMERICAN HEALTH PROPERTIES, INC. with the Depositary
(as hereinafter defined) for the purposes set forth in this Deposit Agreement
and for the issuance hereunder of Receipts (as hereinafter defined) evidencing
Depositary Shares (as hereinafter defined) in respect of the Stock (as
hereinafter defined) so deposited;
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
The following definitions shall for all purposes, unless otherwise
indicated, apply to the respective terms used in this Deposit Agreement and the
Receipts:
"Certificate" shall mean the certificate of designations filed with the
Secretary of State of Delaware establishing the Stock as a series of preferred
stock of the Company.
"Company" shall mean American Health Properties, Inc., a Delaware
corporation, and its successors.
"Deposit Agreement" shall mean this Deposit Agreement, as amended or
supplemented from time to time.
"Depositary" shall mean ____________________, a [national banking
association], and any successor as Depositary hereunder.
<PAGE> 2
"Depositary Shares" shall mean Depositary Shares, each representing a
[one-half] interest in a share of the Stock and evidenced by a Receipt.
"Depositary's Agent" shall mean an agent appointed by the Depositary
pursuant to Section 7.05.
"Depositary's Office" shall mean the office of the Depositary at
____________________, ____________________, ____________________, at which at
any particular time its depositary receipt business shall be administered.
"Receipt" shall mean one of the depositary receipts issued hereunder,
whether in definitive or temporary form.
"Record Holder" as applied with respect to a Depositary Share shall
mean the person in whose name a Receipt evidencing such Depositary Share is
registered on the books of the Depositary maintained for such purpose.
"Registrar" shall mean any bank or trust company which shall be
appointed to register ownership and transfers of Receipts as herein provided.
"Stock" shall mean shares of the Company's _____% Preferred Stock,
Series __, $1.00 par value.
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF STOCK, EXECUTION AND DELIVERY,
TRANSFER, SURRENDER AND REDEMPTION OF RECEIPTS
SECTION 2.01. Form and Transfer of Receipts. Definitive Receipts shall
be engraved or printed or lithographed and shall be substantially in the form
set forth in Exhibit A annexed to this Deposit Agreement, with appropriate
insertions, modifications and omissions, as hereinafter provided. Pending the
preparation of definitive Receipts, the Depositary, upon the written order of
the Company delivered in compliance with Section 2.02, shall execute and
deliver temporary Receipts which are printed, lithographed, typewritten,
mimeographed or otherwise substantially of the tenor of the definitive Receipts
in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the persons executing such
Receipts may determine, as evidenced by their execution of such Receipts. If
temporary Receipts are issued, the Company and the Depositary will cause
definitive Receipts to be prepared without unreasonable delay. After the
preparation of definitive
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<PAGE> 3
Receipts, the temporary Receipts shall be exchangeable for definitive Receipts
upon surrender of the temporary Receipts at an office described in the third
paragraph of Section 2.02, without charge to the holder. Upon surrender for
cancellation of any one or more temporary Receipts, the Depositary shall
execute and deliver in exchange therefor definitive Receipts representing the
same number of Depositary Shares as represented by the surrendered temporary
Receipt or Receipts. Such exchange shall be made at the Company's expense and
without any charge therefor. Until so exchanged, the temporary Receipts shall
in all respects be entitled to the same benefits under this Deposit Agreement,
and with respect to the Stock, as definitive Receipts.
Receipts shall be executed by the Depositary by the manual signature of
a duly authorized officer of the Depositary; provided, that such signature may
be a facsimile if a Registrar for the Receipts (other than the Depositary)
shall have been appointed and such Receipts are counter-signed by manual
signature of a duly authorized officer of the Registrar. No Receipt shall be
entitled to any benefits under this Deposit Agreement or be valid or obligatory
for any purpose unless it shall have been executed manually by a duly
authorized officer of the Depositary or, if a Registrar for the Receipts (other
than the Depositary) shall have been appointed, by facsimile signature of a
duly authorized officer of the Depositary and countersigned manually by a duly
authorized officer of such Registrar. The Depositary shall record on its books
each Receipt so signed and delivered as hereinafter provided.
Receipts may be endorsed with or have incorporated in the text thereof
such legends or recitals or changes not inconsistent with the provisions of
this Deposit Agreement as may be required by the Company or the Depositary or
required to comply with any applicable law or any regulation thereunder or with
the rules and regulations of any securities exchange upon which the Stock, the
Depositary Shares or the Receipts may be listed or to conform with any usage
with respect thereto, or to indicate any special limitations or restrictions to
which any particular Receipts are subject.
Title to Depositary Shares evidenced by a Receipt which is properly
endorsed, or accompanied by a properly executed instrument of transfer, shall
be transferable by delivery with the same effect as in the case of a negotiable
instrument; provided, however, that until transfer of a Depositary Share shall
be registered on the books of the Depositary as provided in Section 2.04, the
Depositary may, notwithstanding any notice to the contrary, treat the Record
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<PAGE> 4
Holder thereof at such time as the absolute owner thereof for the purpose of
determining the person entitled to distributions of dividends or other
distributions or to any notice provided for in this Deposit Agreement and for
all other purposes.
SECTION 2.02. Deposit of Stock; Execution and Delivery of Receipts in
Respect Thereof. Subject to the terms and conditions of this Deposit
Agreement, the Company may from time to time deposit shares of Stock under this
Deposit Agreement by delivery to the Depositary of a certificate or
certificates for the Stock to be deposited, properly endorsed or accompanied,
if required by the Depositary, by a duly executed instrument of transfer or
endorsement, in form satisfactory to the Depositary, together with all such
certifications as may be required by the Depositary in accordance with the
provisions of this Deposit Agreement, and together with a written order of the
Company directing the Depositary to execute and deliver to, or upon the written
order of, the person or persons stated in such order a Receipt or Receipts for
the number of Depositary Shares relating to such deposited Stock.
Deposited Stock shall be held by the Depositary at the Depositary's
Office or at such other place or places as the Depositary shall determine.
Upon receipt by the Depositary of a certificate or certificates for
Stock deposited in accordance with the provisions of this Section, together
with the other documents required as above specified, and upon recordation of
the Stock so deposited on the books of the Company in the name of the
Depositary or its nominee, the Depositary, subject to the terms and conditions
of this Deposit Agreement, shall execute and deliver, to or upon the order of
the person or persons named in the written order delivered to the Depositary
referred to in the first paragraph of this Section, a Receipt or Receipts for
the number of Depositary Shares relating to the Stock so deposited and
registered in such name or names as may be requested by such person or persons.
The Depositary shall execute and deliver such Receipt or Receipts at the
Depositary's Office or such other offices, if any, as the Depositary may
designate. Delivery at other offices shall be at the risk and expense of the
person requesting such delivery.
Other than in the case of splits, combinations or other
reclassifications affecting the Stock, or in the case of dividends or other
distributions of Stock, if any, there shall be deposited hereunder not more
than ____________________ shares of Stock.
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<PAGE> 5
SECTION 2.03. Redemption of Stock. Whenever the Company shall elect
to redeem shares of Stock in accordance with the provisions of the Certificate,
it shall (unless otherwise agreed in writing with the Depositary) mail notice
to the Depositary of such proposed redemption, by first class mail, postage
prepaid not less than 40 or more than 70 days prior to the date fixed for
redemption of Stock in accordance with Section [3(b)] of the Certificate. On
the date of such redemption, provided that the Company shall then have paid in
full to the Depositary the redemption price of the Stock to be redeemed, plus
any accrued and unpaid dividends thereon, the Depositary shall redeem the
Depositary Shares relating to such Stock. The Depositary shall mail notice of
such redemption and the proposed simultaneous redemption of the number of
Depositary Shares relating to the Stock to be redeemed, by first-class mail,
postage prepaid, not less than 30 and not more than 60 days prior to the date
fixed for redemption of such Stock and Depositary Shares (the "Redemption
Date"), to the Record Holders of the Depositary Shares to be so redeemed, at
the addresses of such holders as they appear on the records of the Depositary;
but neither failure to mail any such notice to one or more such holders nor any
defect in any notice to one or more such holders shall affect the sufficiency
of the proceedings for redemption as to other holders. Each such notice shall
state: (i) the Redemption Date; (ii) the number of Depositary Shares to be
redeemed and, if less than all the Depositary Shares held by any such holder
are to be redeemed, the number of such Depositary Shares held by such holder to
be so redeemed; (iii) the redemption price; (iv) the place or places where
Receipts evidencing Depositary Shares are to be surrendered for payment of the
redemption price; and (v) that dividends in respect of the Stock underlying the
Depositary Shares to be redeemed will cease to accrue and accumulate at the
close of business on such Redemption Date. In case less than all the
outstanding Depositary Shares are to be redeemed, the Depositary Shares to be
so redeemed shall be selected by lot, pro rata or such other method as may be
determined by the Depositary to be equitable.
Notice having been mailed by the Depositary as aforesaid, from and
after the Redemption Date (unless the Company shall have failed to redeem the
shares of Stock to be redeemed by it as set forth in the Company's notice
provided for in the preceding paragraph) all dividends in respect of the
Depositary Shares so called for redemption shall cease to accrue and
accumulate, the Depositary Shares being redeemed from such proceeds shall be
deemed no longer to be outstanding, all rights of the holders of Receipts
evidencing such Depositary Shares (except the right to receive the redemption
price) shall, to the extent of such
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<PAGE> 6
Depositary Shares, cease and terminate and, upon surrender in accordance with
such notice of the Receipts evidencing any such Depositary Shares (properly
endorsed or assigned for transfer, if the Depositary shall so require), such
Depositary Shares shall be redeemed by the Depositary at a redemption price per
Depositary Share equal to the proportionate part of the redemption price per
share paid in respect of the shares of Stock plus all money and other property,
if any, paid with respect to such Depositary Shares, including all amounts paid
by the Company in respect of dividends which on the Redemption Date have
accumulated on the shares of Stock to be so redeemed and have not theretofore
been paid.
If less than all the Depositary Shares evidenced by a Receipt are
called for redemption, the Depositary will deliver to the holder of such
Receipt upon its surrender to the Depositary, together with the redemption
payment, a new Receipt evidencing the Depositary Shares evidenced by such prior
Receipt and not called for redemption.
SECTION 2.04. Registration of Transfer of Receipts. Subject to the
terms and conditions of this Deposit Agreement, the Depositary shall register
on its books from time to time transfers of Depositary Shares upon any
surrender of the Receipt or Receipts evidencing such Depositary Shares by the
holder in person or by duly authorized attorney, properly endorsed or
accompanied by a properly executed instrument of transfer. Thereupon the
Depositary shall execute a new Receipt or Receipts evidencing the same
aggregate number of Depositary Shares as those evidenced by the Receipt or
Receipts surrendered and deliver such new Receipt or Receipts to or upon the
order of the person entitled thereto.
SECTION 2.05. Split-ups and Combinations of Receipts; Surrender of
Depositary Shares and Withdrawal of Stock. Upon surrender of a Receipt or
Receipts at the Depositary's Office or at such other offices as it may
designate for the purpose of effecting a split-up or combination of such
Receipt or Receipts, and subject to the terms and conditions of this Deposit
Agreement, the Depositary shall execute and deliver a new Receipt or Receipts
in the denominations requested, evidencing the aggregate number of Depositary
Shares evidenced by the Receipt or Receipts surrendered.
Any holder of Depositary Shares may withdraw the number of whole shares
of Stock underlying such Depositary Shares and all money and other property, if
any, underlying such Depositary Shares by surrendering Receipts evidencing such
Depositary Shares at the Depositary's Office or at such
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<PAGE> 7
other offices as the Depositary may designate for such withdrawals.
Thereafter, without unreasonable delay, the Depositary shall deliver to such
holder, or to the person or persons designated by such holder as hereinafter
provided, the number of whole shares of Stock and all money and other property,
if any, underlying the Depositary Shares so surrendered for withdrawal, but
holders of such whole shares of Stock will not thereafter be entitled to
deposit such Stock hereunder or to receive Receipts evidencing Depositary
Shares therefor. If a Receipt delivered by a holder to the Depositary in
connection with such withdrawal shall evidence a number of Depositary Shares
relating to other than a number of whole shares of Stock, the Depositary shall
at the same time, in addition to such number of whole shares of Stock and such
money and other property, if any, to be so withdrawn, deliver to such holder,
or (subject to Section 3.02) upon his order, a new Receipt evidencing such
excess number of Depositary Shares. Delivery of the Stock and money and other
property being withdrawn may be made by delivery of such certificates,
documents of title and other instruments as the Depositary may deem
appropriate.
If the Stock and the money and other property being withdrawn are to be
delivered to a person or persons other than the Record Holder of the Depositary
Shares evidenced by the Receipts being surrendered for withdrawal of Stock,
such holder shall execute and deliver to the Depositary a written order so
directing the Depositary, and the Depositary may require that the Receipt or
Receipts surrendered by such holder for withdrawal of such shares of Stock be
properly endorsed in blank or accompanied by a properly executed instrument of
transfer.
Delivery of the Stock and money and other property, if any, underlying
the Depositary Shares surrendered for withdrawal shall be made by the
Depositary at the Depositary's Office, except that, at the request, risk and
expense of the holder surrendering such Depositary Shares and for the account
of such holder, such delivery may be made at such other place as may be
designated by such holder.
SECTION 2.06. Limitations on Execution and Delivery, Transfer,
Surrender and Exchange of Receipts. As a condition precedent to the execution
and delivery, registration of transfer, split-up, combination, surrender or
exchange of any Receipt, the Depositary, any of the Depositary's Agents or the
Company may require payment to it of a sum sufficient for the payment (or, in
the event that the Depositary or the Company shall have made such payment, the
reimbursement to it) of any charges or expenses payable by the holder of a
Receipt pursuant to Section 5.07, may
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<PAGE> 8
require the production of evidence satisfactory to it as to the identity and
genuineness of any signature and may also require compliance with such
regulations, if any, as the Depositary or the Company may establish consistent
with the provisions of this Deposit Agreement.
The delivery of Receipts against Stock may be suspended, the
registration of transfer of Depositary Shares may be refused and the
registration of transfer, surrender or exchange of outstanding Depositary
Shares may be suspended (i) during any period when the register of stockholders
of the Company is closed or (ii) if any such action is deemed necessary or
advisable by the Depositary, any of the Depositary's Agents or the Company at
any time or from time to time because of any requirement of law or of any
government or governmental body or commission or under any provision of this
Deposit Agreement.
SECTION 2.07. Lost Receipts, etc. In case any Receipt shall be
mutilated, destroyed, lost or stolen, the Depositary in its discretion may
execute and deliver a Receipt of like form and tenor in exchange and
substitution for such mutilated Receipt, or in lieu of and in substitution for
such destroyed, lost or stolen Receipt, upon (i) the filing by the holder
thereof with the Depositary of evidence satisfactory to the Depositary of such
destruction or loss or theft of such Receipt, or the authenticity thereof and
of his or her ownership thereof and (ii) the furnishing of the Depositary with
reasonable indemnification satisfactory to it.
SECTION 2.08. Cancellation and Destruction of Surrendered Receipts.
All Receipts surrendered to the Depositary or any Depositary's Agent shall be
canceled by the Depositary. Except as prohibited by applicable law or
regulation, the Depositary is authorized to destroy all Receipts so canceled.
ARTICLE III
CERTAIN OBLIGATIONS OF THE HOLDERS
OF RECEIPTS AND THE COMPANY
SECTION 3.01. Filing Proofs, Certificates and Other Information. Any
holder of a Depositary Share may be required from time to time to file such
proof of residence, or other matters or other information, to execute such
certificates and to make such representations and warranties as the Depositary
or the Company may reasonably deem necessary or proper. The Depositary or the
Company may withhold the delivery, or delay the registration of
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<PAGE> 9
transfer, redemption or exchange, of any Depositary Share or the withdrawal of
any Stock underlying Depositary Shares or the distribution of any dividend or
other distribution or the sale of any rights or of the proceeds thereof until
such proof or other information is filed or such certificates are executed or
such representations and warranties are made.
SECTION 3.02. Payment of Taxes or Other Governmental Charges. Holders
of Depositary Shares shall be obligated to make payments to the Depositary of
certain charges and expenses, as provided in Section 5.07. Registration of
transfer of any Depositary Share or any withdrawal of Stock and delivery of all
money or other property, if any, underlying such Depositary Share may be
refused until any such payment due is made, and any dividends or other
distributions may be withheld or all or any part of the Stock or other property
relating to such Depositary Shares and not theretofore sold may be sold for the
account of the holder thereof (after attempting by reasonable means to notify
such holder prior to such sale), and such dividends or other distributions or
the proceeds of any such sale may be applied to any payment of such charges or
expenses, the holder of such Depositary Share remaining liable for any
deficiency.
SECTION 3.03. Warranty as to Stock. The Company hereby represents and
warrants that the Stock, when issued, will be validly issued, fully paid and
nonassessable. Such representation and warranty shall survive the deposit of
the Stock and the issuance of the Receipts.
ARTICLE IV
THE DEPOSITED SECURITIES; NOTICES
SECTION 4.01. Cash Distributions. Whenever the Depositary shall
receive any cash dividend or other cash distribution on the Stock, the
Depositary shall, subject to Sections 3.01 and 3.02, distribute to the Record
Holders of Depositary Shares on the record date fixed pursuant to Section 4.04
such amounts of such dividend or distribution as are, as nearly as practicable,
in proportion to the respective numbers of Depositary Shares held by such
holders; provided, however, that in case the Company or the Depositary shall be
required to withhold and shall withhold from any cash dividend or other cash
distribution in respect of the Stock an amount on account of taxes, the amount
made available for distribution or distributed in respect of Depositary Shares
shall be reduced accordingly. Fractions will be rounded down to the nearest
whole cent.
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SECTION 4.02. Distributions Other than Cash. Whenever the Depositary
shall receive any distribution other than cash on the Stock, the Depositary
shall, subject to Sections 3.01 and 3.02, distribute to the Record Holders of
Depositary Shares on the record date fixed pursuant to Section 4.04 such
amounts of the securities or property received by it as are, as nearly as
practicable, in proportion to the respective numbers of Depositary Shares held
by such holders, in any manner that the Depositary may deem equitable and
practicable for accomplishing such distribution. If in the opinion of the
Depositary such distribution cannot be made proportionately among such Record
Holders, or if for any other reason (including any requirement that the Company
or the Depositary withhold an amount on account of taxes or governmental
charges) the Depositary deems, after consultation with the Company, such
distribution not to be feasible, the Depositary may, with the approval of the
Company, adopt such method as it deems equitable and practicable for the
purpose of effecting such distribution, including the sale (at public or
private sale) of the securities or property thus received, or any part thereof,
at such place or places and upon such terms as it may deem proper. The net
proceeds of any such sale shall, subject to Sections 3.01 and 3.02, be
distributed or made available for distribution, as the case may be, by the
Depositary to the Record Holders of Depositary Shares entitled thereto as
provided by Section 4.01 in the case of a distribution received in cash. The
Company shall not make any distribution of such securities unless the Company
shall have provided an opinion of counsel to the effect that such securities
have been registered under the Securities Act of 1933 or do not need to be
registered.
SECTION 4.03. Subscription Rights, Preferences or Privileges. If the
Company shall at any time offer or cause to be offered to the persons in whose
names Stock is recorded on the books of the Company any rights, preferences or
privileges to subscribe for or to purchase any securities or any rights,
preferences or privileges of any other nature, such rights, preferences or
privileges shall in each such instance be made available by the Depositary to
the Record Holders of Depositary Shares in such manner as the Depositary may
determine, either by the issue to such Record Holders of warrants representing
such rights, preferences or privileges or by such other method as may be
approved by the Depositary in its discretion with the approval of the Company;
provided, however, that (i) if at the time of issue or offer of any such
rights, preferences or privileges the Depositary determines that it is not
lawful or (after consultation with the Company) not feasible to make such
rights, preferences or privileges available to holders of Depositary Shares by
the issue of warrants or otherwise, or
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(ii) if and to the extent so instructed by holders of Depositary Shares who do
not desire to exercise such rights, preferences or privileges, then the
Depositary, in its discretion (with the approval of the Company, in any case
where the Depositary has determined that it is not feasible to make such
rights, preferences or privileges available), may, if applicable laws or the
terms of such rights, preferences or privileges permit such transfer, sell such
rights, preferences or privileges at public or private sale, at such place or
places and upon such terms as it may deem proper. The net proceeds of any such
sale shall, subject to Sections 3.01 and 3.02, be distributed by the Depositary
to the Record Holders of Depositary Shares entitled thereto as provided by
Section 4.01 in the case of a distribution received in cash. The Company shall
not make any distribution of such rights, preferences or privileges unless the
Company shall have provided an opinion of counsel to the effect that such
rights, preferences or privileges have been registered under the
Securities Act of 1933 or do not need to be registered.
If registration under the Securities Act of 1933 of the securities to
which any rights, preferences or privileges relate is required in order for
holders of Depositary Shares to be offered or sold the securities to which such
rights, preferences or privileges relate, the Company agrees with the
Depositary that it will file promptly a registration statement pursuant to such
Act with respect to such rights, preferences or privileges and securities and
use its best efforts and take all steps available to it to cause such
registration statement to become effective sufficiently in advance of the
expiration of such rights, preferences or privileges to enable such holders to
exercise such rights, preferences or privileges. In no event shall the
Depositary make available to the holders of Depositary Shares any right,
preference or privilege to subscribe for or to purchase any securities unless
and until such a registration statement shall have become effective, or unless
the offering and sale of such securities to such holders are exempt from
registration under the provision of such Act.
If any other action under the laws of any jurisdiction or any
governmental or administrative authorization, consent or permit is required in
order for such rights, preferences or privileges to be made available to the
holders of Depositary Shares, the Company agrees with the Depositary that the
Company will use its best efforts to take such action or obtain such
authorization, consent or permit sufficiently in advance of the expiration of
such rights, preferences or privileges to enable such holders to exercise such
rights, preferences or privileges.
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<PAGE> 12
SECTION 4.04. Notice of Dividends, etc.; Fixing of Record Date for
Holders of Depositary Shares. Whenever any cash dividend or other cash
distribution shall become payable or any distribution other than cash shall be
made, or if rights, preferences or privileges shall at any time be offered,
with respect to the Stock, or whenever the Depositary shall receive notice of
any meeting at which holders of Stock are entitled to vote, or of which holders
of Stock are entitled to notice, the Depositary shall in each such instance fix
a record date (which shall be the same date as the record date fixed by the
Company with respect to the Stock) for the determination of the holders of
Depositary Shares who shall be entitled to receive a distribution in respect of
such dividend, distribution, rights, preferences or privileges or the net
proceeds of the sale thereof, or to give instructions for the exercise of
voting rights at any such meeting, or who shall be entitled to receive notice
of such meeting.
SECTION 4.05. Voting Rights. Upon receipt of notice of any meeting at
which the holders of the Stock are entitled to vote, the Depositary shall, as
soon as practicable thereafter, mail to the Record Holders of Depositary Shares
a notice which shall contain (i) such information as is contained in such
notice of meeting and (ii) a statement informing holders of Depositary Shares
that they may instruct the Depositary as to the exercise of the voting rights
pertaining to the amount of Stock underlying their respective Depositary Shares
and a brief statement as to the manner in which such instructions may be given.
Upon the written request of the holders of Depositary Shares on the record date
established in accordance with Section 4.04, the Depositary shall endeavor
insofar as practicable to vote or cause to be voted, in accordance with the
instructions set forth in such requests, the maximum number of whole shares of
Stock underlying the Depositary Shares as to which any particular voting or
consent instructions are received. The Company hereby agrees to take all
action which may be deemed necessary by the Depositary in order to enable the
Depositary to vote such Stock or cause such Stock to be voted. In the absence
of specific instructions from the holder of a Depositary Share, the Depositary
will refrain from voting (but, at its discretion, not from appearing at any
meeting with respect to such Stock unless directed to the contrary by the
holders of all the Depositary Shares) to the extent of the Stock underlying the
Depositary Shares.
SECTION 4.06. Changes Affecting Deposited Securities and
Reclassifications, Recapitalizations, etc. Upon any change in par or
liquidation value, split-up, combination or any other reclassification of the
Stock, or upon any recapitalization, reorganization, merger,
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amalgamation or consolidation affecting the Company or to which it is a party,
the Depositary may in its discretion, with the approval of, and shall upon the
instructions of, the Company, and (in either case) in such manner as the
Depositary may deem equitable, (i) make such adjustments in (a) the fraction of
an interest in one share of Stock underlying one Depositary Share and (b) the
ratio of the redemption price per Depositary Share to the redemption price of a
share of the Stock, in each case as may be necessary fully to reflect the
effects of such change in par or liquidation value, split-up, combination or
other reclassification of the Stock, or of such recapitalization,
reorganization, merger, amalgamation or consolidation and (ii) treat any
securities which shall be received by the Depositary in exchange for or upon
conversion of or in respect of the Stock as new deposited securities so
received in exchange for or upon conversion of or in respect of such Stock. In
any such case the Depositary may in its discretion, with the approval of the
Company, execute and deliver additional Receipts, or may call for the surrender
of all outstanding Receipts to be exchanged for new Receipts specifically
describing such new deposited securities.
SECTION 4.07. Delivery of Reports. The Depositary will forward to
Record Holders of Receipts, at their respective addresses appearing in the
Depositary's books, all notices, reports and communications received from the
Company which are delivered to the Depositary and which the Company is required
to furnish to the holders of Stock or Receipts.
SECTION 4.08. List of Holders. Promptly upon request from time to
time by the Company, the Depositary shall furnish to it a list, as of a recent
date, of the names, addresses and holdings of Depositary Shares of all persons
in whose names Depositary Shares are registered on the books of the Depositary
or Registrar, as the case may be.
ARTICLE V
THE DEPOSITARY, THE DEPOSITARY'S AGENTS,
THE REGISTRAR AND THE COMPANY
SECTION 5.01. Maintenance of Offices, Agencies and Transfer Books by
the Depositary; Registrar. Upon execution of this Deposit Agreement, the
Depositary shall maintain at the Depositary's Offices, or at any Registrar's
Office, at which the Depositary shall have complete access to all books and
records maintained on the Company's behalf, facilities for the execution and
delivery, surrender and
-13-
<PAGE> 14
exchange of Receipts and the registration and registration of transfer of
Depositary Shares, and at the offices of the Depositary's Agents, if any,
facilities for the delivery, surrender and exchange of Receipts and the
registration of transfer of Depositary Shares, all in accordance with the
provisions of this Deposit Agreement.
The Depositary shall keep books at the Depositary's Office for the
registration and registration of transfer of Depositary Shares, which books at
all reasonable times shall be open for inspection by the Record Holders of
Depositary Shares; provided, that any such holder requesting to exercise such
right shall certify to the Depositary that such inspection shall be for a
proper purpose reasonably related to such person's interest as an owner of
Depositary Shares.
The Depositary may close such books, at any time or from time to time,
when deemed expedient by it in connection with the performance of its duties
hereunder.
If the Receipts or the Depositary Shares evidenced thereby or the Stock
underlying such Depositary Shares shall be listed on the New York Stock
Exchange, the Depositary may, with the approval of the Company, appoint a
Registrar for registration of such Receipts or Depositary Shares in accordance
with any requirements of such Exchange. Such Registrar (which may be the
Depositary if so permitted by the requirements of such Exchange) may be removed
and a substitute registrar appointed by the Depositary upon the request or with
the approval of the Company. If the Receipts, such Depositary Shares or such
Stock are listed on one or more other stock exchanges, the Depositary will, at
the request of the Company, arrange such facilities for the delivery,
registration, registration of transfer, surrender and exchange of such
Receipts, such Depositary Shares or such Stock as may be required by law or
applicable stock exchange regulation.
SECTION 5.02. Prevention of or Delay in Performance by the Depositary,
the Depositary's Agents, any Registrar or the Company. Neither the Depositary
nor any Depositary's Agent nor any Registrar nor the Company shall incur any
liability to any holder or any Depositary Share if by reason of any provision
of any present or future law, or regulation thereunder, of the United States of
America or of any other governmental authority or, in the case of the
Depositary, any Depositary's Agent or any Registrar, by reason of any
provision, present or future, of the Company's Certificate of Incorporation
(including the Certificate) or by reason of any act of God or war or other
circumstance beyond the control of the relevant party, the Depositary,
-14-
<PAGE> 15
any Depositary's Agent, any Registrar or the Company shall be prevented or
forbidden from doing or performing any act or thing which the terms of this
Deposit Agreement provide shall be done or performed; nor shall the Depositary,
any Depositary's Agent, any Registrar or the Company incur any liability to any
holder of a Depositary Share (i) by reason of any nonperformance or delay,
caused as aforesaid, in the performance of any act or thing which the terms of
this Deposit Agreement provide shall or may be done or performed, or (ii) by
reason of any exercise of, or failure to exercise, any discretion provided for
in this Deposit Agreement except, in case of any such exercise or failure to
exercise discretion not caused as aforesaid, if caused by the gross negligence
or willful misconduct of the party charged with such exercise or failure to
exercise.
SECTION 5.03. Obligations of the Depositary, the Depositary's Agents,
any Registrar and the Company. Neither the Depositary nor any Depositary's
Agent nor any Registrar nor the Company assumes any obligation or shall be
subject to any liability under this Deposit Agreement to holders of Depositary
Shares other than for its negligence or willful misconduct.
Neither the Depositary nor any Depositary's Agent nor any Registrar nor
the Company shall be under any obligation to appear in, prosecute or defend any
action, suit or other proceeding in respect of the Stock, the Depositary Shares
or the Receipts which in its opinion may involve it in expense or liability
unless indemnity satisfactory to it against all expense and liability be
furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent nor any Registrar nor
the Company shall be liable for any action or any failure to act by it in
reliance upon the written advice of legal counsel or accountants, or
information from any person presenting Stock for deposit, any holder of a
Depositary Share or any other person believed by it in good faith to be
competent to give such information. The Depositary, any Depositary's Agent,
any Registrar and the Company may each rely and shall each be protected in
acting upon any written notice, request, direction or other document believed
by it to be genuine and to have been signed or presented by the proper party or
parties.
The Depositary shall not be responsible for any failure to carry out
any instruction to vote any of the shares of Stock or for the manner or effect
of any such vote, as long as any such action or non-action is in good faith.
The Depositary undertakes, and any Registrar shall
-15-
<PAGE> 16
be required to undertake, to perform such duties and only such duties as are
specifically set forth in this Deposit Agreement, and no implied covenants or
obligations shall be read into this Deposit Agreement against the Depositary or
any Registrar. The Depositary will indemnify the Company against any liability
which may arise out of acts performed or omitted by the Depositary or its
agents due to its or their negligence or bad faith. The Depositary, the
Depositary's Agents, any Registrar and the Company may own and deal in any
class of securities of the Company and its affiliates and in Depositary Shares.
The Depositary may also act as transfer agent or registrar of any of the
securities of the Company and its affiliates.
SECTION 5.04. Resignation and Removal of the Depositary; Appointment
of Successor Depositary. The Depositary may at any time resign as Depositary
hereunder by notice of its election so to do delivered to the Company, such
resignation to take effect upon the appointment of a successor Depositary and
its acceptance of such appointment as hereinafter provided.
The Depositary may at any time be removed by the Company by notice of
such removal delivered to the Depositary, such removal to take effect upon the
appointment of a successor Depositary and its acceptance of such appointment as
hereinafter provided.
In case the Depositary acting hereunder shall at any time resign or be
removed, the Company shall, within 60 days after the delivery of the notice of
resignation or removal, as the case may be, appoint a successor Depositary,
which shall be a bank or trust company having its principal office in the
United States of America and having a combined capital and surplus of at least
$50,000,000. If no successor Depositary shall have been so appointed within 60
days after delivery of such notice, the resigning or removed Depositary may
petition any court of competent jurisdiction for the appointment of a successor
Depositary. Every successor Depositary shall execute and deliver to its
predecessor and to the Company an instrument in writing accepting its
appointment hereunder, and thereupon such successor Depositary, without any
further act or deed, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor and for all purposes shall be the
Depositary under this Deposit Agreement, and such predecessor, upon payment of
all sums due it and on the written request of the Company, shall execute and
deliver an instrument transferring to such successor all rights and powers of
such predecessor hereunder, shall duly assign, transfer and deliver all right,
title and interest in the Stock and any moneys or property held hereunder to
such
-16-
<PAGE> 17
successor and shall deliver to such successor a list of the Record Holders of
all outstanding Depositary Shares. Any successor Depositary shall promptly
mail notice of its appointment to the Record Holders of Depositary Shares.
Any corporation into or with which the Depositary may be merged,
consolidated or converted shall be the successor of such Depositary without the
execution or filing of any document or any further act. Such successor
Depositary may authenticate the Receipts in the name of the predecessor
Depositary or in the name of the successor Depositary.
SECTION 5.05. Corporate Notices and Reports. The Company agrees that
it will transmit to the Depositary all notices, reports and communications
(including without limitation financial statements) required by law, the rules
of any national securities exchange upon which the Stock, the Depositary Shares
or the Receipts are listed or by the Company's Certificate of Incorporation
(including the Certificate) to be furnished by the Company to holders of the
Stock.
SECTION 5.06. Indemnification by the Company. The Company shall
indemnify the Depositary, any Depositary's Agent and any Registrar against, and
hold each of them harmless from, any loss, liability or expense (including the
costs and expenses of defending itself) which may arise out of (i) acts
performed or omitted in connection with this Deposit Agreement and the
Depositary Shares (a) by the Depositary, any Registrar or any of their
respective agents (including any Depositary's Agent), except for any liability
arising out of negligence, willful misconduct or bad faith on the respective
parts of any such person or persons, or (b) by the Company or any of its
agents, or (ii) the offer, sale or registration of the Depositary Shares or the
Stock pursuant to the provisions hereof. The obligations of the Company set
forth in this Section 5.06 shall survive any succession of any Depositary,
Registrar or Depositary's Agent.
SECTION 5.07. Charges and Expenses. The Company shall pay all
transfer and other taxes and governmental charges arising solely from the
existence of the depositary arrangements. The Company shall pay all charges of
the Depositary in connection with the initial deposit of the Stock and the
initial issuance of the Receipts, any redemption of the Stock at the option of
the Company and any withdrawals of Stock by holders of Depositary Shares. All
other transfer and other taxes and governmental charges shall be at the expense
of holders of Depositary Shares. If, at the request of a holder of a Depositary
Share, the
-17-
<PAGE> 18
Depositary incurs charges or expenses for which it is not otherwise liable
hereunder, such holder will be liable for such charges and expenses. All other
charges and expenses of the Depositary, any Depositary's Agent hereunder and
any Registrar (including, in each case, fees and expenses of counsel) incident
to the performance of their respective obligations hereunder will be paid upon
consultation and agreement between the Depositary and the Company as to the
amount and nature of such charges and expenses. The Depositary shall present
its statement for charges and expenses to the Company once every three months
or at such other intervals as the Company and the Depositary may agree.
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.01. Amendment. The form of the Receipts and any provisions
of this Deposit Agreement may at any time and from time to time be amended by
agreement between the Company and the Depositary in any respect which they may
deem necessary or desirable; provided, however, that no such amendment which
shall materially and adversely alter the rights of the existing holders of
Depositary Shares shall be effective unless such amendment shall have been
approved by the holders of at least a majority of the Depositary Shares then
outstanding. Every holder of an outstanding Depositary Share at the time any
such amendment becomes effective shall be deemed, by continuing to hold such
Depositary Share, to consent and agree to such amendment and to be bound by
this Deposit Agreement as amended thereby.
SECTION 6.02. Termination. This Deposit Agreement may be terminated
by the Company or the Depositary only after (i) all outstanding Depositary
Shares shall have been redeemed and any accumulated and unpaid dividends on the
Stock represented by the Depositary Shares, together with all other moneys and
property, if any, to which holders of the related Receipts are entitled under
the terms of such Receipts or this Deposit Agreement, have been paid or
distributed as provided in this Deposit Agreement or provision therefor has
been duly made pursuant to Section 2.03 or (ii) there shall have been made a
final distribution in respect of the Stock in connection with any liquidation,
dissolution or winding up of the Company and such distribution shall have been
distributed to the holders of Receipts pursuant to Section 4.01 or 4.02, as
applicable.
Upon the termination of this Deposit Agreement, the Company shall be
discharged from all obligations under
-18-
<PAGE> 19
this Deposit Agreement except for its obligations to the Depositary, any
Depositary's Agents and any Registrar under Sections 5.06 and 5.07.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Counterparts. This Deposit Agreement may be executed in
any number of counterparts, and by each of the parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed an original, but all such counterparts taken together shall
constitute one and the same instrument.
SECTION 7.02. Exclusive Benefit of Parties. This Deposit Agreement is
for the exclusive benefit of the parties hereto, and their respective
successors hereunder, and shall not be deemed to give any legal or equitable
right, remedy or claim to any other person whatsoever.
SECTION 7.03. Invalidity of Provisions. In case any one or more of
the provisions contained in this Deposit Agreement or in the Receipts should be
or become invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein or
therein shall in no way be affected, prejudiced or disturbed thereby.
SECTION 7.04. Notices. Any and all notices to be given to the Company
hereunder or under the Receipts shall be in writing and shall be deemed to have
been duly given if personally delivered or sent by mail or telegram or telex
confirmed by letter, addressed to the Company at ____________________,
____________________, ____________________, to the attention of the General
Counsel, or at any other address of which the Company shall have notified the
Depositary in writing.
Any and all notices to be given to the Depositary hereunder or under
the Receipts shall be in writing and shall be deemed to have been duly
-19-
<PAGE> 20
given if personally delivered or sent by mail or by telegram or telex confirmed
by letter, addressed to such Record Holder at the address of such Record
Holder as it appears on the books of the Depositary, or if such holder shall
have filed with the Depositary a written request that notices intended for
such holder be mailed to some other address, at the address designated in such
request.
Delivery of a notice sent by mail or by telegram or telex shall be
deemed to be effected at the time when a duly addressed letter containing the
same (or a confirmation thereof in the case of a telegram or telex message) is
deposited, postage prepaid, in a post office letter box. The Depositary or the
Company may, however, act upon any telegram or telex message received by it
from the other or from any holder of a Depositary Share, notwithstanding that
such telegram or telex message shall not subsequently be confirmed by letter or
as aforesaid.
SECTION 7.05. Depositary's Agents. The Depositary may from time to
time, with the prior approval of the Company, appoint Depositary's Agents to
act in any respect for the Depositary for the purposes of this Deposit
Agreement and may at any time appoint additional Depositary's Agents and vary
or terminate the appointment of such Depositary's Agents. The Depositary will
notify the Company of any such action.
SECTION 7.06. Holders of Receipts Are Parties. The holders of
Depositary Shares from time to time shall be parties to this Deposit Agreement
and shall be bound by all of the terms and conditions hereof and of the
Receipts evidencing such Depositary Shares by acceptance of delivery thereof.
SECTION 7.07. Governing Law. THIS DEPOSIT AGREEMENT AND THE RECEIPTS
AND ALL RIGHTS HEREUNDER AND THEREUNDER AND PROVISIONS HEREOF AND THEREOF SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF [NEW
YORK].
SECTION 7.08. Inspection of Deposit Agreement. Copies of this Deposit
Agreement shall be filed with the Depositary and the Depositary's Agents and
shall be open to inspection during business hours at the Depositary's Office
and the respective offices of the Depositary's Agents, if any, by any holder of
a Depository Share.
SECTION 7.09. Headings. The headings of articles and sections in this
Deposit Agreement and in the form of Receipt set forth in Exhibit A hereto have
been inserted for
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<PAGE> 21
convenience only and are not to be regarded as part of this Deposit Agreement
or the Receipts or to have any bearing upon the meaning or interpretation of
any provision contained herein or in the Receipts.
IN WITNESS WHEREOF, the Company and the Depositary have duly executed
this Deposit Agreement as of the day and year first above set forth, and all
holders of Depositary Shares shall become parties hereto by and upon acceptance
by them of delivery of Receipts evidencing such Depositary Shares and issued in
accordance with the terms hereof.
AMERICAN HEALTH PROPERTIES, INC.
By______________________________
[Name and Title]
[_______________________________]
By______________________________
Authorized Officer
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<PAGE> 22
EXHIBIT A
FORM OF DEPOSITARY RECEIPT
FOR DEPOSITARY SHARES
[GENERAL FORM OF FACE OF RECEIPT]
NUMBER DEPOSITARY SHARES
DEPOSITARY RECEIPT FOR DEPOSITARY SHARES,
REPRESENTING ____________________ PREFERRED STOCK
AMERICAN HEALTH PROPERTIES, INC.
Incorporated under the laws of the State of Delaware
This Depositary Receipt is transferable
in the City of ____________________
______________________________, as Depositary, (the "Depositary"),
hereby certifies that ______________________________ is the registered owner of
____________________ Depositary Shares ("Depositary Shares"), each Depositary
Share representing ____________________) of one share of ____________________
Preferred Stock, Series __, par value $1.00 per share (the "Stock"), of
American Health Properties, Inc., a Delaware corporation (the "Company"), on
deposit with the Depositary, subject to the terms and entitled to the benefits
of the Deposit Agreement dated as of ____________________, 199_ (the "Deposit
Agreement", between the Company, the Depositary and all holders from time to
time of Depositary Receipts. By accepting this Depositary Receipt the holder
hereof becomes a party to and agrees to be bound by all the terms and
conditions of the Deposit Agreement. This Depositary Receipt shall not be
valid or obligatory for any purpose or entitled to any benefits under the
Deposit Agreement unless it shall have been executed by the Depositary by the
manual signature of a duly authorized officer or, if executed in facsimile by
the Depositary,
A-1
<PAGE> 23
countersigned by a Registrar in respect of the Depositary Receipts by the
manual signature of a duly authorize officer thereof.
Dated: Depositary
By: __________________________
Authorized Officer
Registrar
By: __________________________
Authorized Officer
A-2
<PAGE> 24
[GENERAL FORM OF REVERSE OF RECEIPT]
AMERICAN HEALTH PROPERTIES, INC.
American Health Properties, Inc. will furnish without charge to each
receiptholder who so requests a copy of the Deposit Agreement and a statement
or summary of the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock or
series thereof which American Health Properties, Inc. is authorized to issue
and the qualifications, limitations or restrictions of such preferences and/or
rights. Any such request is to be addressed to the Secretary of American
Health Properties, Inc.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as tenants in
common
UNIF GIFT MIN ACT - _____________ Custodian ____________
(Cust) (Minor)
under the Uniform Gifts to Minors Act _______
(State)
Additional abbreviations may also be used though not in the above list.
For value received, ____________________ hereby sell(s), assign(s) and
transfer(s) unto ______________________________
(Please insert social security
or other identifying number of
Assignee)
_______________________________________________________________________________
Please print or typewrite Name and address including postal Zip Code of
Assignee
____________________ Depositary Shares represented by the within receipt
and all rights thereunder, and do hereby
A-3
<PAGE> 25
irrevocably constitute and appoint ____________________ Attorney to transfer
said Depositary Shares on the books of the within-named Depositary with full
power of substitution in the premises.
Dated: ____________________
___________________________________
NOTICE. The signature to this
assignment must correspond with the
name as written upon the face of
this instrument in every
particular, without alteration or
enlargement or any change whatever.
A-4
<PAGE> 1
TEMPORARY CERTIFICATE -- EXCHANGEABLE FOR DEFINITIVE
ENGRAVED CERTIFICATE WHEN READY FOR DELIVERY.
<TABLE>
<S> <C> <C>
NUMBER AMERICAN HEALTH PROPERTIES, INC. SHARES
_____ % PREFERRED STOCK SERIES ____, INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE CUSIP ________
PAR VALUE $1.00 THIS CERTIFICATE IS TRANSFERABLE IN [NEW YORK, NY] SEE REVERSE SIDE FOR
CERTAIN DEFINITIONS
THIS CERTIFIES that
S P E C I M E N
is the owner of
FULLY-PAID AND NON-ASSESSABLE SHARES OF THE ____% PREFERRED STOCK, SERIES __ ($1.00 PAR VALUE) OF AMERICAN HEALTH PROPERTIES,
INC., transferable on the books of the Company in person or by duly authorized attorney upon surrender of this certificate
properly endorsed. This certificate is not valid unless countersigned by the Transfer Agent and registered by the Registrar.
WITNESS the corporate seal of the said Company and the signatures of its duly authorized officers.
Dated
</TABLE>
<TABLE>
<S> <C> <C>
[SEAL]
General Counsel and Secretary President and Chief Executive Officer
Countersigned and Registered:
_________________________
_________________________,
BY TRANSFER AGENT
AND REGISTRAR
AUTHORIZED SIGNATURE
</TABLE>
<PAGE> 2
AMERICAN HEALTH PROPERTIES, INC.
The Company will furnish without charge to any shareholder who so
requests, a statement of the powers, designations, preferences, and relative
participating, optional, or other special rights of each class of stock or
series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights. Such request should be made to the Company.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - __________ Custodian __________
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of Under Uniform Gifts to Minors Act
survivorship and not as tenants _________________________________
in common (State)
</TABLE>
Additional abbreviations may also be used through not in the above list.
For value received, ____________________________________________________
hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
____________________________________________________________________________
____________________________________________________________________________
(Please print or typewrite name and address including
postal zip code of assignee)
______________________________________________________________________ Shares
____________________________________________________________________________
represented by the within Certificate, and do hereby irrevocably constitute
and appoint
_______________________________________________________________________ Attorney
_______________________________________________________________________________
to transfer the said shares on the books of the within-named Company with full
power of substitution in the premises.
Dated: __________________ _________________________________
________________________________
NOTICE: The signature(s) to this
assignment must correspond with
the name(s) as written upon the
face of the Certificate in every
particular, without alteration or
enlargement, or any change
whatever. The signature(s) should
be guaranteed by a commercial bank
or trust company or by a New York,
Midwest or Pacific Stock Exchange
member or firm, whose signature is
known to the transfer office.
[CONVERSION NOTICE]
To convert this Security into Common Stock of the Company, check the
box. [ ]
To convert only part of this Security, state the amount: $__________
If you want the stock certificate made out in another person's name,
fill in the form below:
PLEASE INSERT OTHER PERSON'S
SOCIAL SECURITY OR TAX I.D. NO.
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type other person's name and address including postal zip code)
_______________________________________________________________________________
_______________________________________________________________________________
Dated: ___________________ _________________________________
_________________________________
NOTICE: The signature(s) to this
conversion notice must correspond
with the name(s) as written upon
the face of the Certificate in
every particular, without
alteration or enlargement, or any
change whatever. The signature(s)
should be guaranteed by a
commercial bank or trust company,
or by a New York, Midwest or
Pacific Stock Exchange member or
firm, whose signature is known to
the transfer office.
<PAGE> 1
<TABLE>
<S> <C>
COMMON STOCK COMMON STOCK
INCORPORATED UNDER THE LAWS PAR VALUE $0.01
OF THE STATE OF DELAWARE
NUMBER SHARES
LS
THIS CERTIFICATE IS TRANSFERABLE SEE REVERSE FOR PROVISIONS REGARDING
IN THE CITY OF SAN FRANCISCO RESTRICTIONS ON TRANSFER OF SHARES NOTICE FOR
OR IN LOS ANGELES CERTAIN ACQUISITIONS OF SHARES. ACQUISITION
OR IN NEW YORK RESTRICTIONS AND MANDATORY OFFER BY CERTAIN
STOCKHOLDERS TO WHICH THE SHARES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT.
CUSIP 026494 10 4
</TABLE>
AMERICAN HEALTH PROPERTIES, INC.
This Certifies that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF
American Health Properties, Inc. transferable only on the books of the
Corporation, in person or by Attorney duly authorized in writing upon surrender
of this Certificate properly endorsed. This Certificate and the shares
represented hereby are issued and shall be held subject to all provisions of the
Corporation's Certificate of Incorporation and any amendments thereof, to all
the provisions of which the holder hereof assents by acceptance of this
Certificate. Reference is hereby made to Article VI of the Certificate of
Incorporation printed in full on the back of this Certificate.
This Certificate is issued by the Board of Directors of American Health
Properties, Inc. acting not individually but as such Board of Directors and
is not valid until countersigned and registered by the transfer agent and
registrar.
Witness, the seal and the signatures of the duly authorized officers of
the Corporation in facsimile.
Dated:
<TABLE>
<S> <C> <C>
Countersigned and Registered: AMERICAN HEALTH PROPERTIES, INC. /S/ SIGNATURE
CHEMICAL TRUST COMPANY OF CALIFORNIA CORPORATE SEAL President and Chief Executive Officer
Transfer Agent and Registrar, 1986
DELAWARE
By /S/ SIGNATURE
Secretary
Authorized Signature [SEAL]
</TABLE>
<PAGE> 2
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN
RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT BETWEEN AMERICAN HEALTH PROPERTIES,
INC. AND MANUFACTURERS HANOVER TRUST COMPANY OF CALIFORNIA, DATED AS OF
APRIL 10, 1990 (THE "RIGHTS AGREEMENT"), THE TERMS OF WHICH ARE HEREBY
INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL EXECUTIVE OFFICES OF AMERICAN HEALTH PROPERTIES, INC. UNDER CERTAIN
CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS MAY BE
REDEEMED, MAY EXPIRE, MAY BE AMENDED OR MAY BE EVIDENCED BY SEPARATE
CERTIFICATES AND NO LONGER BE EVIDENCED BY THIS CERTIFICATE. AMERICAN HEALTH
PROPERTIES, INC. WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE
RIGHTS AGREEMENT WITHOUT CHARGE PROMPTLY AFTER RECEIPT OF A WRITTEN REQUEST
THEREFOR. UNDER CERTAIN CIRCUMSTANCES AS SET FORTH IN THE RIGHTS AGREEMENT,
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE
OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
MAY BECOME NULL AND VOID.
ARTICLE VI
RESTRICTION ON TRANSFER OF SHARES, ACQUISITION
RESTRICTION AND OFFER BY CERTAIN STOCKHOLDERS
SECTION 1. Whenever it is deemed by the Board of Directors to be
prudent in protecting the status of the Corporation as a "real estate
investment trust" under the Internal Revenue Code of 1986, as amended (the
"Code"), the Board of Directors may require to be filed with the Corporation as
a condition to permitting any proposed transfer, and/or the registration of any
transfer, of shares of capital stock of the Corporation, a statement or
affidavit from any proposed transferee setting forth the number of shares
already owned after application of the attribution rules (the "Attribution
Rules") of Section 544 of the Code by the transferee and any related person(s)
specified in the form prescribed by the Board of Directors for that purpose.
All contracts for the sale or other transfer of shares of the Corporation shall
be subject to this provision.
SECTION 2. As a condition to the transfer and/or registration of
transfer of any shares of capital stock of the Corporation which would result
in any stockholder owning, directly or indirectly, shares in excess of 9% of
the outstanding shares of capital stock of the Corporation, the proposed
transferee shall file with the Corporation an affidavit setting forth the
number of shares of capital stock of the Corporation owned directly and
indirectly (for purposes of this Section 2, shares of capital stock not owned
directly shall be deemed to be owned indirectly by a person if that person or a
group of which he is a member would be the beneficial owner of such shares for
purposes of Rule 13d-3, or any successor rule thereto, promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934
(the "Exchange Act"), and/or would be considered to own such shares by reason
of the Attribution Rules), by the person filing the affidavit. The affidavit to
be filed with the Corporation shall set forth all information required to be
reported in returns filed by stockholders under Regulation 1.857-9 issued by
the Internal Revenue Service, or similar provisions of any successor
regulation, and in reports to be filed under Section 13(d) of the Exchange Act.
The affidavit, or an amendment thereto, must be filed with the Corporation
within 10 days after demand therefor and in any event at least 15 days prior to
any transfer, registration of transfer or transaction which, if consummated,
would cause the filing person to hold shares in excess of 9% of the outstanding
shares of capital stock of the Corporation. No transfer nor any registration of
any purported transfer in violation of the notice provisions of this Section 2
of Article VI shall be valid or be given effect. Notwithstanding the foregoing,
compliance with the requirements of this Section 2 shall not validate any
purported transfers which would result in any stockholder owning, directly or
indirectly, shares in excess of the "Limit" as defined in Section 4 of this
Article VI.
<PAGE> 3
SECTION 3. Any acquisition of shares of capital stock of the
Corporation that would result in any stockholder owning, directly or
indirectly, shares in excess of the "Limit" as defined in Section 4 of this
Article VI shall be void ab initio to the fullest extent permitted under
applicable law and the intended transferee of such "Excess Shares," as defined
in Section 4 of this Article VI, shall be deemed never to have had an interest
therein. If the foregoing provision is determined to be void, voidable or
invalid by virtue of any legal decision, statute, rule or regulation, then the
transferee of such shares shall be deemed to have acted as agent on behalf of
the Corporation in acquiring such shares and to hold such shares on behalf of
the Corporation.
SECTION 4. Notwithstanding any other provision hereof to the contrary,
and subject to the provisions of Section 5 of this Article VI, no person, or
persons acting as a group, shall at any time directly or indirectly acquire
ownership in the aggregate of more than 9.8% of the outstanding shares of
capital stock of the Corporation (the "Limit"). Shares which would, but for
this Section 4, be owned by a person or a group of persons in excess of the
Limit at any time shall be deemed "Excess Shares." For the purposes of
determining and dealing with Excess Shares, the term "ownership" shall be
defined to include shares of capital stock constructively owned by a person
under the Attribution Rules and shall also include shares beneficially owned by
a person for purposes of Rule 13d-3, or any successor rule thereto,
promulgated by the Securities and Exchange Commission under the Exchange Act
and the term "group" shall have the same meaning as that term has for purposes
of Section 13(d)(3) of such Exchange Act. All shares of the Corporation which
any person has the right to acquire upon exercise of outstanding rights,
options and warrants, and upon conversion of any securities convertible into
shares, if any, shall be considered outstanding for purposes of the Limit if
such inclusion will cause such person to own more than the Limit. Unless
otherwise required by applicable law, the Corporation shall not register the
transfer of shares to the extent that, as a result of the transfer, any person
would hold Excess Shares.
SECTION 5. The Limit set forth in Sections 3 and 4 of this Article VI
and the filing requirements of Section 2 of this Article VI shall not apply to
the acquisition of shares of the Corporation by the Corporation, by an
underwriter in connection with a public offering of shares of the Corporation,
or in any transaction involving the issuance of shares by the Corporation, in
which the Board of Directors determines that the underwriter or other person or
party initially acquiring such shares will timely distribute such shares to or
among others such that, following such distribution, none of such shares will
be Excess Shares. The Board of Directors in its discretion may exempt from the
Limit under Sections 3 and 4 of this Article VI and from the filing
requirements of Section 2 of this Article VI ownership or transfers of certain
designated shares while owned by or transferred to any subsidiary of this
Corporation or to any other person in connection with a reorganization,
recapitalization, merger, liquidation or similar transaction approved by the
Board of Directors, provided that such person has given the Board of Directors
evidence and assurances acceptable to the Board of Directors that the
qualification of the Corporation as a "real estate investment trust" under the
Code would not be jeopardized thereby.
<PAGE> 4
SECTION 6. Notwithstanding Sections 3 and 4 of this Article VI, if at
any time more than 9.8% of the shares of capital stock of the Corporation has
become concentrated in the hands of a "beneficial owner" (as such term is
defined in Rule 13d-3, or any successor rule thereto, under the Exchange Act),
(i) such beneficial owner and each of his "affiliates" (as such term is defined
on December 1, 1986 in Rule 12b-2 under the Exchange Act) owning any shares of
capital stock of the Corporation shall be deemed to have offered to sell to the
Corporation or its designee on a date fixed by the Corporation as specified in
the Corporation's notice of its or its designee's acceptance of such offer to
sell, such a number of shares of capital stock sufficient, in the opinion of
the Board of Directors, to maintain or bring the direct or indirect ownership
of shares of capital stock of the Corporation of such beneficial owner to no
more than the Limit. The price at which the Corporation or its designee may
purchase the outstanding shares of capital stock of the Corporation pursuant
to the preceding sentence of this paragraph (the "Purchase Price") shall be
equal to the closing sales price for the shares, if then listed on a national
securities exchange, or the average of the closing sales prices for the
shares if then listed on more than one national securities exchange, or if
the shares are not then listed on a national securities exchange, the latest
bid quotation for the shares if then traded over-the-counter, on the last
business day immediately preceding the day on which notice of the Corporation's
acceptance of the beneficial owner's and/or his affiliates' offer of sale is
sent, or, if no such closing sales prices or quotations are available, then
the Purchase Price shall be equal to the net asset value of such stock
(determined on the basis of the fair market value of the assets of the
Corporation) as determined in good faith by the Board of Directors. The
Purchase Price of any shares acquired by the Corporation or its designee shall
be paid, at the option of the Corporation, in cash or in the form of an
unsecured, subordinated promissory note of the Corporation or its designee
bearing interest and having a term to maturity (to be not less than five nor
more than twenty years) as shall be determined by the Board of Directors.
Payment of the Purchase Price shall be made at such time and in such manner
as may be determined by the Board of Directors and specified in the notice of
acceptance sent to the beneficial owner and/or his affiliates. From and
after the tender by the Corporation of the Purchase Price therefor on the
date fixed for purchase by the Board of Directors, the holder of any shares
to be so purchased shall cease to be entitled to any rights as a holder of
such shares, excepting only the right to payment of the Purchase Price
fixed as aforesaid.
SECTION 7. Nothing contained in this Article VI or in any other
provision hereof shall limit the authority of the Board of Directors to take
such other action as it deems necessary or advisable to protect the Corporation
and the interests of its stockholders by preservation of the Corporation's
status as a "real estate investment trust" under the Code.
SECTION 8. For purposes of this Article VI only, the term "person"
shall include individuals, corporations, limited partnerships, general
partnerships, joint stock companies or associations, joint ventures,
associations, consortia, companies, trusts, banks, trust companies, land
trusts, common law trusts, business trusts, or other entities and governments
and agencies and political subdivisions thereof; provided, however, that such
term shall not include this Corporation or any of its subsidiaries.
SECTION 9. If any provision of this Article VI or any application of
any such provision is determined to be invalid by any federal or state court
having jurisdiction over the issues, the validity of the remaining provisions
shall not be affected and other applications of such provision shall be
affected only to the extent necessary to comply with the determination of
such court.
<PAGE> 5
---------------
The following abbreviations, when used in the inscription on the face
of this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM -- as tenants in common UNIF GIFT MIN ACT-- Custodian
TEN ENT -- as tenants by the entireties ---------------------------- -------------------
JT TEN -- as joint tenants with right (Cust) (Minor)
of survivorship and not as under Uniform Gifts to Minors
tenants in common
Act
-------------------
(State)
Additional abbreviations may also be used though not in the above list.
For value received, hereby sell, assign and transfer unto
--------------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
-------------------------------------------
/ /
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE)
------------------------------------------------------------------------------------------------------------------------------------
Shares
-----------------------------------------------------------------------------------------------------------------------------
of Common Stock represented by the within Certificate, and do hereby irrevocably constitute and appoint
Attorney
---------------------------------------------------------------------------------------------------------------------------
to transfer the said Shares on the books of the within-named Corporation with full power of substitution in the premises.
Dated:
-----------------------------------------------------
(Sign here)
--------------------------------------------------------------
NOTICE: The signature to this assignment must correspond with the name
as written upon the face of the Certificate in every particular, without
alteration or enlargement or any change whatever.
</TABLE>
<PAGE> 1
AMERICAN HEALTH PROPERTIES, INC.
PREFERRED STOCK WARRANT AGREEMENT
THIS WARRANT AGREEMENT, dated as of _____________, is between
American Health Properties, Inc., a Delaware corporation (hereinafter called
the "Company"), and __________________, as Warrant Agent (herein called the
"Warrant Agent").
WHEREAS, the Company proposes to sell [if Warrants are sold
with other securities -- [title of such other securities being offered] (the
"Offered Securities") with] warrant certificates evidencing one or more
warrants (the "Warrants" or individually a "Warrant") representing the right to
purchase [title of Preferred Stock or Depositary Shares purchasable through
exercise of Warrants] (the "Warrant Securities"), such warrant certificates and
other warrant certificates issued pursuant to this Agreement being herein
called the "Warrant Certificates"; and
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company in connection with the issuance, exchange, exercise and
replacement of the Warrant Certificates, and in this Agreement wishes to set
forth, among other things, the form and provisions of the Warrant Certificates
and the terms and conditions on which they may be issued, exchanged, exercised
and replaced;
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, the parties hereto agree as follows:
----------
* Complete or modify the provisions of this Warrant Agreement as appropriate to
reflect the terms of the Warrants, Warrant Securities and Offered Securities.
<PAGE> 2
ARTICLE I
ISSUANCE OF WARRANTS AND EXECUTION AND
DELIVERY OF WARRANT CERTIFICATES
SECTION 1.01. Issuance of Warrants. [If Warrants alone --
Upon issuance, each Warrant Certificate shall evidence one or more Warrants.]
[If Offered Securities and Warrants -- Warrants shall be [initially] issued in
connection with the issuance of the Offered Securities [but shall be separately
transferable on and after ____________ (the "Detachable Date")] [and shall not
be separately transferable], and each Warrant Certificate shall evidence one or
more Warrants.] Each Warrant evidenced thereby shall represent the right,
subject to the provisions contained herein and therein, to purchase one Warrant
Security. [If Offered Securities and Warrants -- Warrant Certificates shall be
initially issued in units with the Offered Securities, and each Warrant
Certificate included in such a unit shall evidence ______ Warrants for each
[$__________ in principal amount] [_______ shares] of Offered Securities
included in such unit.]
SECTION 1.02. Execution and Delivery of Warrant Certificates.
Each Warrant Certificate, whenever issued, shall be in registered form
substantially in the form set forth in Exhibit A hereto, shall be dated
_______________ and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the officers of the Company executing the
same may approve (execution thereof to be conclusive evidence of such approval)
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Warrants may be listed, or to conform to usage. The Warrant Certificates shall
be signed on behalf of the Company by its Chairman of the Board, its Vice
Chairman of the Board, the Chief Executive officer, its President or one of its
Vice Presidents and by its Secretary or one of its Assistant Secretaries under
its corporate seal reproduced thereon. Such signatures may be manual or
facsimile signatures of such authorized officers and may be imprinted or
otherwise reproduced on the Warrant Certificates. The seal of the Company may
be in the form of a facsimile thereof and may be impressed, affixed, imprinted
or otherwise reproduced on the Warrant Certificates.
No Warrant Certificate shall be valid for any purpose, and no
Warrant evidenced thereby shall be
2
<PAGE> 3
exercisable, until such Warrant Certificate has been countersigned by the
manual signature of the Warrant Agent. Such signature by the Warrant Agent
upon any Warrant Certificate executed by the Company shall be conclusive
evidence that the Warrant Certificate so countersigned has been duly issued
hereunder.
In case any officer of the Company who shall have signed any
of the Warrant Certificates either manually or by facsimile signature shall
cease to be such officer before the Warrant Certificates so signed shall have
been countersigned and delivered by the Warrant Agent, such Warrant
Certificates may be countersigned and delivered notwithstanding that the person
who signed such Warrant Certificates ceased to be such officer of the Company,
and any Warrant Certificate may be signed on behalf of the Company by such
persons as, at the actual date of the execution of such Warrant Certificate,
shall be the proper officers of the Company, although at the date of the
execution of this Agreement any such person was not such officer.
The term "holder" or "holder of a Warrant Certificate" as used
herein shall mean any person in whose name at the time any Warrant Certificate
shall be registered upon the books to be maintained by the Warrant Agent for
that purpose [If Offered Securities and Warrants are not immediately detachable
-- or upon the register of the Offered Securities prior to the Detachable Date.
Prior to the Detachable Date, the Company will, or will cause the registrar of
the Offered Securities to, make available at all times to the Warrant Agent
such information as to holders of the offered Securities with Warrants as may
be necessary to keep the Warrant Agent's records up to date].
SECTION 1.03. Issuance of Warrant Certificates. Warrant
Certificates evidencing the right to purchase an aggregate not exceeding
_________ Warrant Securities (except as provided in Sections 2.03(c), 3.02 and
4.01) may be executed by the Company and delivered to the Warrant Agent upon
the execution of this Warrant Agreement or from time to time thereafter. The
Warrant Agent shall, upon receipt of Warrant Certificates duly executed on
behalf of the Company, countersign Warrant Certificates evidencing Warrants
representing the right to purchase up to _________ Warrant Securities and shall
deliver such Warrant Certificates to or upon the order of the Company.
Subsequent to such original issuance of the Warrant Certificates, the Warrant
Agent shall countersign a Warrant Certificate only if the Warrant Certificate
is issued in exchange or substitution for one or
3
<PAGE> 4
more previously countersigned Warrant Certificates or in connection with their
transfer, as hereinafter provided.
Section 1.04. Temporary Warrant Certificates. Pending the
preparation of definitive Warrant Certificates, the Company may execute, and
upon the order of the Company, the Warrant Agent shall authenticate and
deliver, temporary Warrant Certificates which are printed, lithographed,
typewritten, mimeographed, or otherwise produced substantially of the tenor of
the definitive Warrant Certificate in lieu of which they are issued and with
such insertions, omissions, substitutions and other variations as the officers
executing such Warrant Certificate may determine as appropriate, as evidenced
by their execution of such Warrant Certificates.
If temporary Warrant Certificates are issued, the Company will
cause definitive Warrant Certificates to be prepared without unreasonable
delay. After the preparation of definitive Warrant Certificates, the temporary
Warrant Certificates shall be exchangeable for definitive Warrant Certificates
upon surrender of the temporary Warrant Certificates at the corporate trust
office of the Warrant Agent [or ________________], without charge to the
holder. Upon surrender for cancellation of any one or more temporary Warrant
Certificates the Company shall execute and the Warrant Agent shall authenticate
and deliver in exchange therefor definitive Warrant Certificates representing
the same aggregate number of Warrants. Until so exchanged, the temporary
Warrant Certificates shall in all respects be entitled to the same benefits
under this Agreement as definitive Warrant Certificates.
ARTICLE II
WARRANT PRICE, DURATION AND
EXERCISE OF WARRANTS
SECTION 2.01. Warrant Price. During the period from
_____________, through and including _______________, the exercise price of
each Warrant will be _____________. Such purchase price of Warrant Securities
is referred to in this Agreement as the "Warrant Price." No adjustment shall
be made for any dividends on any Warrant securities issuable upon exercise of
any Warrant.
SECTION 2.02. Duration of Warrants. Each Warrant may be
exercised in whole at any time, as specified herein, on or after [the date
thereof] [______________] and at or before 5 P.M., [New York City] [Los
Angeles] time, on
4
<PAGE> 5
____________ or such later date as the Company may designate, by notice to the
Warrant Agent and the holders of Warrant Certificates mailed to their addresses
as set forth in the record books of the Warrant Agent (the "Expiration Date").
Each Warrant not exercised at or before 5 P.M., [New York City] [Los Angeles]
time, on the Expiration Date shall become void, and all rights of the holder of
the Warrant Certificate evidencing such Warrant under this Agreement shall
cease.
SECTION 2.03. Exercise of Warrants.
(a) During the period specified in Section 2.02, any whole
number of Warrants may be exercised by providing certain information as set
forth on the reverse side of the Warrant Certificate and by paying in full, in
[lawful money of the United States of America] [in cash or by certified check
or official bank check or by bank wire transfer, in each case,] [by bank wire
transfer] in [immediately available] [next-day] funds the Warrant Price for
each Warrant exercised, to the Warrant Agent at its corporate trust office [or
at ___________], provided that such exercise is subject to receipt within five
(5) business days of such [payment] [wire transfer] by the Warrant Agent of the
Warrant Certificate with the form of election to purchase Warrant Securities
set forth on the reverse side of the Warrant Certificate properly completed and
duly executed. The date on which payment in full of the Warrant Price is
received by the Warrant Agent shall, subject to receipt of the Warrant
Certificate as aforesaid, be deemed to be the date on which the Warrant is
exercised. The Warrant Agent shall deposit all funds received by it in payment
of the Warrant Price in an account of the Company maintained with it and shall
advise the Company by telephone at the end of each day on which a [payment]
[wire transfer] for the exercise of Warrants is received of the amount so
deposited to its account. The Warrant Agent shall promptly confirm such
telephone advice to the Company in writing.
(b) The Warrant Agent shall, from time to time, as promptly
as reasonably practicable, advise the Company of (i) the number of Warrants
exercised, (ii) the instructions of each holder of the Warrant Certificates
evidencing such Warrants with respect to delivery of the Warrant Securities to
which such holder is entitled upon such exercise, (iii) delivery of Warrant
Certificates evidencing the balance, if any, of the Warrants remaining after
such exercise, and (iv) such other information as the Company shall reasonably
require.
5
<PAGE> 6
(c) As soon as reasonably practicable after the exercise of
any Warrant, the Company shall issue to or upon the order of the holder of the
Warrant Certificate evidencing such Warrant, the Warrant Securities to which
such holder is entitled, in fully registered form, registered in such name or
names as may be directed by such holder. If fewer than all of the Warrants
evidenced by such Warrant Certificate are exercised, the Company shall execute,
and an authorized officer of the Warrant Agent shall manually countersign and
deliver a new Warrant Certificate evidencing the number of such Warrants
remaining unexercised.
(d) The Company shall not be required to pay any stamp or
other tax or other governmental charge required to be paid in connection with
any transfer involved in the issue of the Warrant Securities, and in the event
that any such transfer is involved, the Company shall not be required to issue
or deliver any Warrant Security until such tax or other charge shall have been
paid or it has been established to the Company's satisfaction that no such tax
or other charge is due.
(e) Prior to the issuance of any Warrants there shall have
been reserved, and the Company shall at all times keep reserved, out of its
authorized but unissued Warrant Securities, a number of shares sufficient to
provide for the exercise of the Warrant Certificates.
ARTICLE III
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
SECTION 3.01. No Rights as Warrant Securityholder conferred
by Warrants or Warrant Certificates. No Warrant Certificates or Warrant
evidenced thereby shall entitle the holder thereof to any of the rights of a
holder of Warrant Securities, including, without limitation, the right to
receive the payment of dividends or distributions, if any, on the Warrant
Securities or to exercise any voting rights.
SECTION 3.02. Lost, Stolen, Mutilated or Destroyed Warrant
Certificates. Upon receipt by the Warrant Agent of evidence reasonably
satisfactory to it and the Company of the ownership of and the loss, theft,
destruction or mutilation of any Warrant Certificate and of indemnity
reasonably satisfactory to the Warrant Agent and the Company and, in the case
of mutilation, upon surrender thereof to the Warrant Agent for cancellation,
then, in the absence of
6
<PAGE> 7
notice to the Company or the Warrant Agent that such Warrant Certificate has
been acquired by a bona fide purchaser, the Company shall execute, and an
authorized officer of the Warrant Agent shall manually countersign and deliver,
in exchange for or in lieu of the lost, stolen, destroyed or mutilated Warrant
Certificate, a new Warrant Certificate of the same tenor and evidencing a like
number of Warrants. Upon the issuance of any new Warrant Certificate 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 Warrant Agent)
in connection therewith. Every substitute Warrant Certificate executed and
delivered pursuant to this Section in lieu of any lost, stolen or destroyed
Warrant Certificate shall be at any time enforceable by anyone, and shall be
entitled to the benefits of this Agreement equally and proportionately with any
and all other Warrant Certificates duly executed and delivered 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 of
mutilated, lost, stolen or destroyed Warrant Certificates.
SECTION 3.03. Holder of Warrant Certificate May Enforce
Rights. Notwithstanding any of the provisions of this Agreement, any holder of
a Warrant Certificate, without the consent of the Warrant Agent, the holder of
any Warrant Securities or the holder of any other Warrant Certificate, may, in
such holder's own behalf and for such holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, such holder's right to
exercise the Warrants evidenced by such holder's Warrant Certificate in the
manner provided in such holder's Warrant Certificate and in this Agreement.
SECTION 3.04. Reclassification, Consolidation, Merger, Sale,
Conveyance or Lease. In case any of the following shall occur while any
Warrants are outstanding: (a) any reclassification or change of the outstanding
shares of Warrant Securities, or (b) any consolidation or merger to which the
Company is party (other than a consolidation or a merger in which the Company
is the continuing corporation and which does not result in any reclassification
of, or change in, the outstanding shares of Warrant Securities issuable upon
exercise of the Warrants), or (c) any sale, conveyance or lease to another
corporation of the property of the Company as an entirety or substantially as
an entirety, the Company, or such successor or purchasing corporation, as the
case may be, shall make appropriate
7
<PAGE> 8
provision by amendment of this Agreement or otherwise so that the holders of
the Warrants then outstanding shall have the right at any time thereafter, upon
exercise of such Warrants, to purchase the kind and amount of shares of stock
and other securities and property receivable upon such a reclassification,
change, consolidation, merger, sale, conveyance or lease as would be received
by a holder of the number of shares of Warrant Securities issuable upon
exercise of such Warrant immediately prior to such reclassification, change,
consolidation, merger, sale, conveyance or lease, and, in the case of a
consolidation, merger, sale, conveyance or lease the Company shall thereupon be
relieved of any further obligation hereunder or under the Warrants, and the
Company as the predecessor corporation may thereupon or any time thereafter be
dissolved, wound up or liquidated. Such successor or assuming corporation
thereupon may cause to be signed, and may issue either in its own name or in
the name of the Company, any or all of the Warrants issuable hereunder that
theretofore shall not have been signed by the Company, and may execute and
deliver Warrant Securities in its own name, in fulfillment of its obligations
to deliver Warrant Securities upon exercise of the Warrants. All the Warrants
so issued shall in all respects have the same legal rank and benefit under this
Agreement as the Warrants theretofore or thereafter issued in accordance with
the terms of this Agreement as though all of such Warrants had been issued at
the date of the execution hereof. In any case of any such reclassification,
change, consolidation, merger, conveyance, transfer or lease, such changes in
phraseology and form (but not in substance) may be made in the Warrants
thereafter to be issued as may be appropriate.
The Warrant Agent may receive a written opinion of legal
counsel as conclusive evidence that any such reclassification, change,
consolidation, merger, conveyance, transfer or lease complies with the
provisions of this Section 3.04.
ARTICLE IV
EXCHANGE AND TRANSFERS
OF WARRANT CERTIFICATES
SECTION 4.01. Exchange and Transfer of Warrant Certificates.
[If Offered Securities with Warrants that are immediately detachable -- Upon]
[If Offered Securities with Warrants that are not immediately detachable --
Prior to the Detachable Date a Warrant Certificate may be exchanged or
transferred only together with the Offered Security to which
8
<PAGE> 9
the Warrant Certificate was initially attached, and only for the purpose of
effecting or in conjunction with an exchange or transfer of such Offered
Security. Prior to any Detachable Date, each transfer of the Offered Security
[on the register of the Offered Securities] shall operate also to transfer the
related Warrant Certificates. After the Detachable Date upon] surrender at the
corporate trust office of the Warrant Agent [or __________], Warrant
Certificates evidencing Warrants may be exchanged for Warrant Certificates in
other denominations evidencing such Warrants or the transfer thereof may be
registered in whole or in part; provided that such other Warrant Certificates
evidence the same aggregate number of Warrants as the Warrant Certificates so
surrendered. The Warrant Agent shall keep, at its corporate trust office [and
at ________], books in which, subject to such reasonable regulations as it may
prescribe, it shall register Warrant Certificates and exchanges and transfers
of outstanding Warrant Certificates, upon surrender of the Warrant Certificates
to the Warrant Agent at its corporate trust office [or ________] for exchange
or registration of transfer, properly endorsed or accompanied by appropriate
instruments of registration of transfer and written instructions for transfer,
all in form satisfactory to the Company and the Warrant Agent. No service
charge shall be made for any exchange or registration of transfer of Warrant
Certificates, but the Company may require payment of a sum sufficient to cover
any stamp or other tax or other governmental charge that may be imposed in
connection with any such exchange or registration of transfer. Whenever any
Warrant Certificates are so surrendered for exchange or registration of
transfer, an authorized officer of the Warrant Agent shall manually countersign
and deliver to the person or persons entitled thereto a Warrant Certificate or
Warrant Certificates duly authorized and executed by the Company, as so
requested. The Warrant Agent shall not be required to effect any exchange or
registration or transfer that will result in the issuance of a Warrant
Certificate evidencing a fraction of a Warrant or a number of full Warrants and
a fraction of a Warrant. All Warrant Certificates issued upon any exchange or
registration of transfer of Warrant Certificates shall be the valid obligation
of the Company, evidencing the same obligations, and entitled to the same
benefits under this Agreement, as the Warrant Certificate surrendered for such
exchange or registration of transfer.
SECTION 4.02. Treatment of Holders of Warrant Certificates.
[If Offered Securities and Warrants are not immediately detachable -- Prior to
the Detachable Date, the Company, the Warrant Agent and all other persons may
treat the owner of the Offered Security as the owner of the
9
<PAGE> 10
Warrant Certificates initially attached thereto for any purpose and as the
person entitled to exercise the rights represented by the Warrants evidenced by
such Warrant Certificates, any notice to the contrary notwithstanding. After
the Detachable Date and prior to due presentment of a Warrant Certificate for
registration of transfer,] [t][T]he Company and the Warrant Agent may treat the
registered holder of a Warrant Certificate as the absolute owner thereof for
any purpose and as the person entitled to exercise the rights represented by
the Warrants evidenced thereby, any notice to the contrary notwithstanding.
SECTION 4.03. Cancellation of Warrant Certificates. Any
Warrant Certificate surrendered for exchange, registration of transfer or
exercise of the Warrants evidenced thereby shall, if surrendered to the
Company, be delivered to the Warrant Agent and all Warrant Certificates
surrendered or so delivered to the Warrant Agent shall be promptly cancelled by
the Warrant Agent and shall not be reissued and, except as expressly permitted
by this Agreement, no Warrant Certificate shall be issued hereunder in exchange
or in lieu thereof. The Warrant Agent shall deliver to the Company from time
to time or otherwise dispose of cancelled Warrant Certificates in a manner
satisfactory to the Company.
ARTICLE V
CONCERNING THE WARRANT AGENT
SECTION 5.01. Warrant Agent. The Company hereby appoints
__________________ as the Warrant Agent of the Company in respect of the
Warrants and the Warrant Certificates upon the terms and subject to the
conditions herein set forth, and ____________________ hereby accepts such
appointment. The Warrant Agent shall have the powers and authority granted to
and conferred upon it in the Warrant Certificates and hereby and such further
powers and authority to act on behalf of the Company as the Company may
hereafter grant to or confer upon it. All of the terms and provisions with
respect to such powers and authority contained in the Warrant Certificates are
subject to and governed by the terms and provisions hereof.
SECTION 5.02. Conditions of Warrant Agent's Obligations. The
Warrant Agent accepts its obligations herein set forth upon the terms and
conditions hereof, including the following to all of which the Company agrees
and to all of which the rights hereunder of the holders from time to time of
the Warrant Certificates shall be subject:
10
<PAGE> 11
(a) Compensation and Indemnification. The Company agrees
promptly to pay the Warrant Agent the compensation agreed upon with the Company
for all services rendered by the Warrant Agent and to reimburse the Warrant
Agent for reasonable out-of-pocket expenses (including counsel fees) reasonably
incurred without negligence or bad faith by the Warrant Agent in connection
with the services rendered hereunder by the Warrant Agent. The Company also
agrees to indemnify the Warrant Agent for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on the part
of the Warrant Agent, arising our of or in connection with its acting as
Warrant Agent hereunder, as well as the costs and expenses of defending against
any claim of such liability.
(b) Agent for the Company. In acting under this Warrant
Agreement and in connection with the Warrant Certificates, the Warrant Agent is
acting solely as agent of the Company and does not assume any obligations or
relationship of agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.
(c) Counsel. The Warrant Agent may consult with nationally
recognized counsel satisfactory to it, and the written advice of such counsel
shall be full and complete authorization and protection in respect of any
action reasonably taken, suffered or omitted by it hereunder in good faith and
in accordance with the advice of such counsel.
(d) Documents. The Warrant Agent shall be protected and
shall incur no liability for or in respect of any action taken or thing
suffered by it in reliance upon any Warrant Certificate, notice, direction,
consent, certificate, affidavit, statement or other paper or document
reasonably believed by it to be genuine and to have been presented or signed by
the,proper parties.
(e) Certain Transactions. The Warrant Agent, and its
officers, directors and employees, may become the owner of, or acquire any
interest in, Warrants, with the same rights that it or they would have if it
were not the Warrant Agent hereunder, and, to the extent permitted by
applicable law, it or they may engage or be interested in any financial or
other transaction with the Company and may act on, or as depositary, trustee or
agent for, any committee or body of holders of Warrant Securities or other
obligations of the Company as freely as if it were not the Warrant Agent
hereunder. Nothing in this Warrant Agreement shall be
11
<PAGE> 12
deemed to prevent the Warrant Agent from acting as Trustee under any of the
Indentures.
(f) No Liability for Interest. Unless otherwise agreed with
the Company, the Warrant Agent shall have no liability for interest on any
monies at any time received by it pursuant to any of the provisions of this
Agreement or of the Warrant Certificates.
(g) No Liability for Invalidity. The Warrant Agent shall
have no liability with respect to any invalidity of this Agreement or any of
the Warrant Certificates (except as to the Warrant Agent's countersignature
thereon).
(h) No Responsibility for Representations. The Warrant Agent
shall not be responsible for any of the recitals or representations herein or
in the Warrant Certificates (except as to the Warrant Agent's countersignature
thereon), all of which are made solely by the Company.
(i) No Implied Obligations. The Warrant Agent shall be
obligated to perform only such duties as are herein and in the Warrant
Certificates specifically set forth and no implied duties or obligations shall
be read into this Agreement or the Warrant Certificates against the Warrant
Agent. The Warrant Agent shall not be accountable or under any duty or
responsibility for the use by the Company of any of the Warrant Certificates
authenticated by the Warrant Agent and delivered by it to the Company pursuant
to this Agreement or for the application by the Company of the proceeds of the
Warrant Certificates. The Warrant Agent shall have no duty or responsibility
in case of any default by the Company in the performance of its covenants or
agreements contained herein or in the Warrant Certificates or in the case of a
receipt of any written demand from a holder of a Warrant Certificate with
respect to such default, including, without limiting the generality of the
foregoing, any duty or responsibility to initiate or attempt to initiate any
proceedings at law or otherwise or, except as provided in Section 6.02 hereof,
to make any demand upon the Company.
SECTION 5.03. Resignation and Appointment of Successor. (a)
The Company agrees, for the benefit of the holders from time to time of the
Warrant Certificates, that there shall at all times be a Warrant Agent
hereunder until all the Warrants have been exercised or are no longer
exercisable.
12
<PAGE> 13
(b) The Warrant Agent may at any time resign as such agent by
giving written notice to the Company of such intention on its part, specifying
the date on which its desired resignation shall become effective; provided that
such date shall be not less than three (3) months after the date on which such
notice is given unless the Company otherwise agrees. The Warrant Agent
hereunder may be removed at any time by the filing with it of an instrument in
writing signed by or on behalf of the Company and specifying such removal and
the intended date when it shall become effective. Such resignation or removal
shall take effect upon the appointment by the Company, as hereinafter provided,
of a successor Warrant Agent (which shall be a bank or trust company authorized
under the laws of the jurisdiction of its organization to exercise corporate
trust powers) and the acceptance of such appointment by such successor Warrant
Agent. The obligation of the Company under Section 5.02(a) shall continue to
the extent set forth therein, notwithstanding the resignation or removal of the
Warrant Agent.
(c) In case at any time the Warrant Agent shall resign, or
shall be removed, or shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or shall commence a voluntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or under any other applicable
Federal or state bankruptcy, insolvency or similar law or shall consent to the
appointment of or taking possession by a receiver, custodian, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Warrant
Agent or its property or affairs, or shall make an assignment for the benefit
of creditors, or shall admit in writing its inability to pay its debts
generally as they become due, or shall take corporate action in furtherance of
any such action, or a decree or order for relief by a court having jurisdiction
in the premises shall have been entered in respect of the Warrant Agent in an
involuntary case under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or state bankruptcy, insolvency or
similar law; or a decree or order by a court having jurisdiction in the
premises shall have been entered for the appointment of a receiver, custodian,
liquidator, assignee, trustee, sequestrator (or similar official) of the
Warrant Agent or of its property or affairs, or any public officer shall take
charge or control of the Warrant Agent or of its property or affairs for the
purpose of rehabilitation, conservation, winding up or liquidation, a successor
Warrant Agent, qualified as aforesaid, shall be appointed by the Company by an
instrument in writing, filed with the successor Warrant Agent. Upon the
appointment as aforesaid of a successor
13
<PAGE> 14
Warrant Agent and acceptance by the successor Warrant Agent of such
appointment, the Warrant Agent shall cease to be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder, and thereupon such successor
Warrant Agent, without any further act, deed or conveyance, shall become vested
with all the authority, rights, powers, trusts, duties and obligations of such
predecessor with like effect as if originally named as Warrant Agent hereunder,
and such predecessor, upon payment of its charges and disbursements then
unpaid, shall thereupon become obligated to transfer, deliver and pay over, and
such successor Warrant Agent shall be entitled to receive, all monies,
securities and other property on deposit with or held by such predecessor, as
Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder
may be merged or converted or any corporation with which the Warrant Agent may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation
to which the Warrant Agent shall sell or otherwise transfer all or
substantially all the assets and business of the Warrant Agent, provided that
it shall be qualified as aforesaid, shall be the successor Warrant Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Amendment. This Agreement may be amended by
the parties hereto, without the consent of the holder of any Warrant
Certificate, for the purpose of curing any ambiguity, or of curing, correcting
or supplementing any defective provision contained herein, or making any other
provisions with respect to matters or questions arising under this Agreement as
the Company and the Warrant Agent may deem necessary or desirable; provided;
however, that such action shall not affect adversely the interests of the
holders of the Warrant Certificates.
SECTION 6.02. Notices and Demands to the Company and Warrant
Agent. If the Warrant Agent shall receive any notice or demand addressed to
the Company by the holder of a
14
<PAGE> 15
Warrant Certificate pursuant to the provisions of the Warrant Certificates, the
Warrant Agent shall promptly forward such notice or demand to the Company.
SECTION 6.03. Addresses. Any communication from the Company
to the Warrant Agent with respect to this Agreement shall be addressed to
_____________________, Attention: ____________________ and any communication
from the Warrant Agent to the Company with respect to this Agreement shall be
addressed to American Health Properties, Inc., 6400 S. Fiddler's Green Circle,
Suite 1800, Englewood, Colorado 80111, Attention: Executive Vice President and
Chief Financial officer (or such other address as shall be specified in writing
by the Warrant Agent or by the Company).
SECTION 6.04. Applicable Law. The validity, interpretation
and performance of this Agreement and each Warrant Certificate issued hereunder
and of the respective terms and provisions thereof shall be governed by, and
construed in accordance with, the laws of the State of [California] [New York].
SECTION 6.05. Delivery of Prospectus. The Company will
furnish to the Warrant Agent sufficient copies of a prospectus relating to the
Warrant Securities deliverable upon exercise of the Warrants (the
"Prospectus"), and the Warrant Agent agrees that upon the exercise of any
Warrant, the Warrant Agent will deliver a Prospectus to the holder of the
Warrant Certificate evidencing such Warrant prior or concurrently with the
delivery of the Warrant Securities issued upon such exercise. The Warrant
Agent shall not, by reason of any such delivery, assume any responsibility for
the accuracy or adequacy of such Prospectus.
SECTION 6.06. Obtaining of Governmental Approvals. The
Company will from time to time take all action which may be necessary to obtain
and keep effective any and all permits, consents and approvals of governmental
agencies and authorities and securities acts filings under Federal and state
laws (including without limitation a registration statement in respect of the
Warrants and Warrant Securities under the Securities Act of 1933, as amended),
which may be or become requisite in connection with the issuance, sale,
transfer, and delivery of the Warrant Securities issued upon exercise of the
Warrant Certificates, the exercise of the Warrants, the issuance, sale,
transfer and delivery of the Warrants or upon the expiration of the period
during which the Warrants are exercisable.
15
<PAGE> 16
SECTION 6.07. Persons Having Rights under Warrant Agreement.
Nothing in this Agreement shall give to any person other than the Company, the
Warrant Agent and the holders of the Warrant Certificates any right, remedy or
claim under or by reason of this Agreement.
SECTION 6.08. Headings. The descriptive headings of the
several Articles and Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 6.09. Counterparts. This Agreement may be executed
in any number of counterparts, each of which as so executed shall be deemed to
be an original, but such counterparts shall together constitute but one and the
same instrument.
SECTION 6.10. Inspection of Agreement. A copy of this
Agreement shall be available at all reasonable times at the principal corporate
trust office of the Warrant Agent for inspection by the holder of any Warrant
Certificate. The Warrant Agent may require such holder to submit his Warrant
Certificate for inspection by it.
IN WITNESS WHEREOF American Health Properties, Inc. and
___________________ have caused this Agreement to be signed by their respective
duly authorized officers, and their respective corporate seals to be affixed
hereunto, and the same to be attested by their respective Secretaries or one of
their respective Assistant Secretaries, all as of the day and year first above
written.
AMERICAN HEALTH PROPERTIES, INC.
By: ____________________________
Title:
16
<PAGE> 17
Attest:
_________________________
Title:
[Warrant Agent]
By: ____________________________
Title:
Attest:
_________________________
Title:
17
<PAGE> 18
Exhibit A
FORM OF WARRANT CERTIFICATE
[FACE OF WARRANT CERTIFICATE]
<TABLE>
<S> <C>
[Form of Legend if Offered Securities with Prior to ___________ this Warrant Certificate
Warrants that are not immediately detachable. cannot be transferred or exchanged unless
attached to a [Title of Offered Securities].]
[Form of Legend if Warrants are not immediately Prior to ___________, Warrants evidenced by this
exercisable. Warrant Certificate cannot be exercised.]
</TABLE>
EXERCISABLE ONLY IF COUNTERSIGNED BY THE
WARRANT AGENT AS PROVIDED HEREIN
AMERICAN HEALTH PROPERTIES, INC.
WARRANTS TO PURCHASE
[Title of Warrant Securities]
VOID AFTER 5 P.M. [NEW YORK CITY TIME] [LOS ANGELES TIME], ON
_____________.
No. __________ __________ Warrants
This certifies that _________________ or registered assigns is
the registered owner of the above indicated number of Warrants, each Warrant
entitling such owner [If Offered Securities with Warrants that are not
immediately detachable --, subject to the registered owner qualifying as a
"holder" of this Warrant Certificate, as hereinafter defined] to purchase, at
any time [after 5 P.M., [New York City] [Los Angeles] time, on _________,
________ shares of [Title of Warrant Securities] (the "Warrant Securities"),
American Health Properties, Inc. (the "Company") on the following basis:
[during the period from _____________, through and including ___________, the
exercise price of each Warrant will be ________; during the period from
____________, through and including ____________,] the exercise price of each
Warrant will be _____________ (the "Warrant Price"). No adjustment shall be
made for any dividends on any Warrant Securities issuable upon exercise of any
Warrant. The holder may exercise the Warrants evidenced hereby by providing
certain information set forth on the back hereof and by paying in full [in
A-1
<PAGE> 19
lawful money of the United States of America] [in cash or by certified check or
official bank check or by bank wire transfer, in each case,] [by bank wire
transfer] in [immediately available] [next-day] funds, the Warrant Price for
each Warrant exercised to the Warrant Agent (as hereinafter defined) and by
surrendering this Warrant Certificate, with the purchase form on the back
hereof duly executed, at the corporate trust office of [name of Warrant Agent],
[or ________], which is, on the date hereof, at the address specified on the
reverse hereof, and upon compliance with and subject to the conditions set
forth herein and in the Warrant Agreement (as hereinafter defined).
The term "holder" as used herein shall mean [if Offered
Securities with Warrants that are not immediately detachable --, prior to
___________ (the "Detachable Date"), the registered owner of the Company's
[title of Offered Securities] to which this Warrant Certificate is initially
attached, and after such Detachable Date,] the person in whose name at the time
of this Warrant Certificate shall be registered upon the books to be maintained
by the Warrant Agent for that purpose pursuant to Section 4.01 of the Warrant
Agreement.
Any whole number of Warrants evidenced by this Warrant
Certificate may be exercised to purchase Warrant Securities in registered form.
Upon any exercise of fewer than all of the Warrants evidenced by this Warrant
Certificate, there shall be issued to the holder hereof a new Warrant
Certificate evidencing the number of Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance
with the Warrant Agreement dated as of __________ (the "Warrant Agreement") by
and between the Company and the Warrant Agent and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which terms and
provisions the holder of this Warrant Certificate consents by acceptance
hereof. Copies of the Warrant Agreement are on file at the above-mentioned
office of the Warrant Agent [and at ____________].
[If Offered Securities with registered Warrants that are not
immediately detachable -- Prior to ___________, this Warrant Certificate may be
exchanged or transferred only together with the [Title of Offered Securities]
(the "Offered Securities") to which this Warrant Certificate was initially
attached, and only for the purpose of effecting, or in conjunction with, an
exchange or transfer of such Offered Security. After such date, this] [if
Offered Securities with registered Warrants that are immediately
A-2
<PAGE> 20
detachable -- Transfer of this] Warrant Certificate may be registered when this
Warrant Certificate is surrendered at the corporate trust office of the Warrant
Agent [or ___________] by the registered owner or such owner's assigns, in
person or by an attorney duly authorized in writing, in the manner and subject
to the limitations provided in the Warrant Agreement.]
[If offered Securities with Warrants that are not immediately
detachable -- Except as provided in the immediately preceding paragraph, after]
[If Offered Securities with Warrants that are immediately detachable or Warrant
alone -- After] countersignature by the Warrant Agent and prior to the
expiration of this Warrant Certificate, this Warrant Certificate may be
exchanged at the corporate trust office of the Warrant Agent [or
_______________] for Warrant Certificates representing the same aggregate
number of Warrants.
This Warrant Certificate shall not entitle the holder hereof
to any of the rights of a holder of the Warrant Securities, including, without
limitation, the right to receive payments of dividends or distributions, if
any, on the Warrant Securities or to exercise any voting rights.
This Warrant Certificate shall not be valid or obligatory for
any purpose until countersigned by the Warrant Agent.
Dated as of __________________
AMERICAN HEALTH PROPERTIES, INC.
By: ____________________________
Attest:
__________________________
Countersigned:
__________________________
As Warrant Agent
By: ______________________
Authorized Signature
A-3
<PAGE> 21
[REVERSE OF WARRANT CERTIFICATE]
INSTRUCTIONS FOR EXERCISE OF WARRANT
To exercise the Warrants evidenced hereof, the holder must pay
in United States dollars [in cash or by certified check or official bank check
or by bank wire transfer] [by bank wire transfer] in [immediately available]
[next-day] funds the Warrant Price in full for Warrants exercised to [insert
name of Warrant Agent] [Corporate Trust Department] [insert address of Warrant
Agent], Attn. _______ [or __________], which [payment] [wire transfer] must
specify the name of the holder and the number of Warrants exercised by such
holder. In addition, the holder must complete the information required below
and present this Warrant Certificate in person or by mail (certified or
registered mail is recommended) to the Warrant Agent at the appropriate address
set forth below. This Warrant Certificate, completed and duly executed, must
be received by the Warrant Agent within five business days of the [payment]
[wire transfer].
TO BE EXECUTED UPON EXERCISE OF WARRANT
The undersigned hereby irrevocably elects to exercise
__________ Warrants, evidenced by this Warrant Certificate, to purchase
_________ shares of the [Title of Warrant Securities] (the "Warrant
Securities") of American Health Properties, Inc. and represents that the
undersigned has tendered payment for such Warrant Securities in Dollars [in
cash or by certified check or official bank check or by bank wire transfer, in
each case] [by bank wire transfer] in [immediately available] [next-day] funds
to the order of American Health Properties, Inc., c/o [insert name and address
of Warrant Agent], in the amount of __________ in accordance with the terms
hereof. The undersigned requests that said amount of Warrant Securities be in
fully registered form in the authorized denominations, registered in such names
and delivered all as specified in accordance with the instructions set forth
below.
If the number of Warrants exercised is less than all of the
Warrants evidenced hereby, the undersigned requests that a new Warrant
Certificate representing the remaining Warrant evidenced hereby be issued and
delivered to the undersigned unless otherwise specified in the instruction
below.
A-4
<PAGE> 22
<TABLE>
<S> <C>
Dated: ____________________________ Name _________________________________________
___________________________________ Address ______________________________________
(Insert Social Security or
Other Identifying Number of Holder) ______________________________________
Signature Guaranteed (Signature must conform in all respects
____________________ to name of holder as specified on the
face of this Warrant Certificate and
must bear a signature guarantee by a
bank, trust company or member broker of
the New York or Pacific Stock Exchange)
</TABLE>
The Warrants evidenced hereby may be exercised at the following
addresses:
By hand at
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
By mail at
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
[Instructions as to form and delivery of Warrant Securities
and, if applicable, Warrant Certificates evidencing
unexercised Warrants -- complete as appropriate.]
A-5
<PAGE> 23
ASSIGNMENT
[Form of Assignment To Be Executed If Holder
Desires To Transfer Warrants Evidenced Hereby]
FOR VALUE RECEIVED ______________________________ hereby
sells, assigns and transfers unto
<TABLE>
<S> <C>
__________________________ ______________________________
(Please print name) (Please insert social security
or other identifying number)
__________________________
(Address)
__________________________
(City, including zip code)
</TABLE>
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint _________ as Attorney to transfer said
Warrant Certificate on the books of the Warrant Agent with full power of
substitution in the premises.
Dated:
<TABLE>
<S> <C>
______________________________
Signature
(Signature must conform in all respects
to name of holder as specified on the face
of this Warrant Certificate and must bear a signature
guarantee by a bank, trust company or member
broker of the New York or Pacific Stock Exchange)
Signature Guaranteed:
_________________________
</TABLE>
A-6
<PAGE> 1
AMERICAN HEALTH PROPERTIES, INC.
COMMON STOCK WARRANT AGREEMENT
THIS WARRANT AGREEMENT, dated as of _____________, is between
American Health Properties, Inc., a Delaware corporation (hereinafter called
the "Company"), and _____________________ , as Warrant Agent (herein called the
"Warrant Agent").
WHEREAS, the Company proposes to sell [if Warrants are sold
with other securities -- [title of such other securities being offered] (the
"Offered Securities") with] warrant certificates evidencing one or more
warrants (the "Warrants" or individually a "Warrant") representing the right to
purchase the Common Stock of the Company (the "Warrant Securities"), such
warrant certificates and other warrant certificates issued pursuant to this
Agreement being herein called the "Warrant Certificates"; and
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company in connection with the issuance, exchange, exercise and
replacement of the Warrant Certificates, and in this Agreement wishes to set
forth, among other things, the form and provisions of the Warrant Certificates
and the terms and conditions on which they may be issued, exchanged, exercised
and replaced;
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, the parties hereto agree as follows:
------------
* Complete or modify the provisions of this Warrant Agreement as appropriate to
reflect the terms of the Warrants, Warrant Securities and Offered Securities.
<PAGE> 2
ARTICLE I
ISSUANCE OF WARRANTS AND EXECUTION AND
DELIVERY OF WARRANT CERTIFICATES
SECTION 1.01. Issuance of Warrants. [If Warrants alone --
Upon issuance, each Warrant Certificate shall evidence one or more Warrants.]
[If Offered Securities and Warrants -- Warrants shall be [initially) issued in
connection with the issuance of the Offered Securities [but shall be separately
transferable on and after _____________ (the "Detachable Date")] [and shall not
be separately transferable], and each Warrant Certificate shall evidence one or
more Warrants.] Each Warrant evidenced thereby shall represent the right,
subject to the provisions contained herein and therein, to purchase one Warrant
Security. [If Offered Securities and Warrants -- Warrant Certificates shall be
initially issued in units with the Offered Securities, and each Warrant
Certificate included in such a unit shall evidence ______ Warrants for each
[$_____________ in principal amount] [______ shares] of Offered Securities
included in such unit.]
SECTION 1.02. Execution and Delivery of Warrant Certificates.
Each Warrant Certificate, whenever issued, shall be in registered form
substantially in the form set forth in Exhibit A hereto, shall be dated
____________ and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the officers of the Company executing the
same may approve (execution thereof to be conclusive evidence of such approval)
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Warrants may be listed, or to conform to usage. The Warrant Certificates shall
be signed on behalf of the Company by its Chairman of the Board, its Vice
Chairman of the Board, the Chief Executive Officer, its President or one of its
Vice Presidents and by its Secretary or one of its Assistant Secretaries under
its corporate seal reproduced thereon. Such signatures may be manual or
facsimile signatures of such authorized officers and may be imprinted or
otherwise reproduced on the Warrant Certificates. The seal of the Company may
be in the form of a facsimile thereof and may be impressed, affixed, imprinted
or otherwise reproduced on the Warrant Certificates.
No Warrant Certificate shall be valid for any purpose, and no
Warrant evidenced thereby shall be
2
<PAGE> 3
exercisable, until such Warrant Certificate has been countersigned by the
manual signature of the Warrant Agent. Such signature by the Warrant Agent
upon any Warrant Certificate executed by the Company shall be conclusive
evidence that the Warrant Certificate so countersigned has been duly issued
hereunder.
In case any officer of the Company who shall have signed any
of the Warrant Certificates either manually or by facsimile signature shall
cease to be such officer before the Warrant Certificates so signed shall have
been countersigned and delivered by the Warrant Agent, such Warrant
Certificates may be countersigned and delivered notwithstanding that the person
who signed such Warrant Certificates ceased to be such officer of the Company,
and any Warrant Certificate may be signed on behalf of the Company by such
persons as, at the actual date of the execution of such Warrant Certificate,
shall be the proper officers of the Company, although at the date of the
execution of this Agreement any such person was not such officer.
The term "holder" or "holder of a Warrant Certificate" as used
herein shall mean any person in whose name at the time any Warrant Certificate
shall be registered upon the books to be maintained by the Warrant Agent for
that purpose [If Offered Securities and Warrants are not immediately detachable
-- or upon the register of the Offered Securities prior to the Detachable Date.
Prior to the Detachable Date, the Company will, or will cause the registrar of
the Offered Securities to, make available at all times to the Warrant Agent
such information as to holders of the Offered Securities with Warrants as may
be necessary to keep the Warrant Agent's records up to date].
SECTION 1.03. Issuance of Warrant Certificates. Warrant
Certificates evidencing the right to purchase an aggregate not exceeding
_________ Warrant Securities (except as provided in Sections 2.04(c), 3.02 and
4.01) may be executed by the Company and delivered to the Warrant Agent upon
the execution of this Warrant Agreement or from time to time thereafter. The
Warrant Agent shall, upon receipt of Warrant Certificates duly executed on
behalf of the Company, countersign Warrant Certificates evidencing Warrants
representing the right to purchase up to ________ Warrant Securities and shall
deliver such Warrant Certificates to or upon the order of the Company.
Subsequent to such original issuance of the Warrant Certificates, the Warrant
Agent shall countersign a Warrant Certificate only if the Warrant Certificate
is issued in exchange or substitution for one or
3
<PAGE> 4
more previously countersigned Warrant Certificates or in connection with their
transfer, as hereinafter provided.
SECTION 1.04. Temporary Warrant Certificates. Pending the
preparation of definitive Warrant Certificates, the Company may execute, and
upon the order of the Company, the Warrant Agent shall authenticate and
deliver, temporary Warrant Certificates which are printed, lithographed,
typewritten, mimeographed or otherwise produced substantially of the tenor of
the definitive Warrant Certificate in lieu of which they are issued and with
such insertions, omissions, substitutions and other variations as the officers
executing such Warrant Certificate may determine as appropriate, as evidenced
by their execution of such Warrant Certificates.
If temporary Warrant Certificates are issued, the Company will
cause definitive Warrant Certificates to be prepared without unreasonable
delay. After the preparation of definitive Warrant Certificates, the temporary
Warrant Certificates shall be exchangeable for definitive Warrant Certificates
upon surrender of the temporary Warrant Certificates at the corporate trust
office of the Warrant Agent [or _______________], without charge to the holder.
Upon surrender for cancellation of any one or more temporary Warrant
Certificates the Company shall execute and the Warrant Agent shall authenticate
and deliver in exchange therefor definitive Warrant Certificates representing
the same aggregate number of Warrants. Until so exchanged, the temporary
Warrant Certificates shall in all respects be entitled to the same benefits
under this Agreement as definitive Warrant Certificates.
ARTICLE II
WARRANT PRICE, DURATION AND
EXERCISE OF WARRANTS
SECTION 2.01. Warrant Price. During the period from
_______________ , through and including _____________ , the exercise price of
each Warrant will be ____________ subject to adjustment as provided in Section
2.02. Such purchase price of Warrant Securities is referred to in this
Agreement as the "Warrant Price." Other than as provided in Section 2.02
herein, no adjustment shall be made for any dividends on any Warrant Securities
issuable upon exercise of any Warrant.
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SECTION 2.02. Adjustments in Warrant Price.
(1) The Warrant Price, the number of shares purchasable upon
exercise of the Warrants and the number of Warrants outstanding shall be
subject to adjustment as follows:
(A) In case the Company shall at any time (i) declare a
dividend on the Common Stock in shares of its capital stock, (ii) subdivide its
outstanding Common Stock, (iii) combine the outstanding Common Stock into a
smaller number of shares or (iv) issue any shares of its capital stock by
reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the surviving
company), the number of shares purchasable upon exercise of each Warrant
immediately prior to the date of such event shall be proportionately adjusted
so that the holder of each Warrant shall be entitled to receive upon payment of
the Warrant Price the aggregate number of shares of the Company that, if such
Warrant had been exercised immediately prior to the occurrence of such event,
such holder would have owned or have been entitled to receive immediately after
the occurrence of such event. Such adjustment shall be made successively
whenever any event listed above shall occur.
(B) In case the Company shall issue rights or warrants to all
holders of its Common Stock (which rights or warrants are not available on an
equivalent basis to holders of the Warrants) entitling them to subscribe for or
purchase Common Stock at a price per share less than the current market price
per share (as defined in subparagraph (E) of this Section), at the record date
for the determination of stockholders entitled to receive such rights or
warrants, the number of shares purchasable upon exercise of each Warrant shall
be adjusted (subject to the limitations contained in subparagraph (G) of this
Section) by multiplying the number of shares purchasable upon exercise of each
Warrant in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding on
such date of issue plus the number of additional shares of Common Stock to be
offered for subscription or purchase and the denominator of which shall be the
number of shares of Common Stock outstanding on the date of issue plus the
number of shares of Common Stock that the aggregate offering price of the total
number of shares of Common Stock so to be offered would purchase at such
current market price. Such adjustment shall become effective at the close of
business on such record date; provided, however, to the extent that Common
Stock is not delivered after the expiration of such
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rights or warrants, the number of shares purchasable upon exercise of each
Warrant shall be readjusted (but only with respect to Warrants exercised after
such expiration) to the number of shares purchasable upon exercise of each
Warrant that would then be in effect had the adjustments made upon the issuance
of such rights or warrants been made upon the basis of delivery of only the
number of shares of Common Stock actually issued.
(C) In case the Company shall distribute to all holders of
Common Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the surviving company)
evidences of its indebtedness or assets (including securities but excluding
cash dividends or distributions paid out of retained earnings and dividends
payable in Common Stock) or subscription rights or warrants (excluding those
referred to in subparagraph (B) of this Section), the number of shares
purchasable upon exercise of each Warrant shall be adjusted (subject to the
limitations contained in subparagraph (G) of this Section) by multiplying the
number of shares purchasable upon exercise of each Warrant in effect
immediately prior to the record date for determination of stockholders entitled
to receive such distribution by a fraction, the numerator of which shall be the
current market price per share of Common Stock (as defined in subparagraph (E)
of this Section) on such record date and the denominator of which shall be such
current market price per share of Common Stock, less the fair market value (as
determined by the Board of Directors, whose determination shall be conclusive)
of the portion of the evidences of indebtedness or assets or subscription
rights or warrants so to be distributed that are applicable to one share of
Common Stock. Such adjustment shall become effective at the close of business
on such record date.
If after the distribution date (the "Distribution Date") for
purposes of distributing to holders of the Common Stock any stockholder
protection, "poison pill" or other similar rights to subscribe for securities
of the Company or any other entity ("Shareholder Rights"), exercising holders
of the Warrant are not entitled to receive the Shareholder Rights that would
otherwise be attributable (but for the date of exercise) to the shares of
Common Stock received upon such exercise, then adjustment of the number of
shares purchasable upon exercise of each Warrant shall be made under this
subparagraph (C) as if the Shareholder Rights were then being distributed to
holders of the Company's Common Stock. If such an adjustment is made and the
Shareholder Rights are later [redeemed,] invalidated or terminated, then a
corresponding reversing adjustment shall
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be made to the number of shares purchasable upon exercise of each Warrant, on
an equitable basis, to take account of such event. However, the Company may
elect to make provision with respect to the Shareholder Rights so that each
share of Common Stock issuable upon exercise of each Warrant, whether or not
issued after the Distribution Date for such Shareholder Rights, will be
accompanied by the Shareholder Rights that would otherwise be attributable (but
for the date of exercise) to such shares of Common Stock, in which event the
preceding two sentences will not apply. The foregoing provisions shall be
applicable to all such rights plan(s) of the Company.
(D) After each adjustment of the number of shares purchasable
upon exercise of each Warrant pursuant to this Section, the Warrant Price shall
be adjusted by multiplying such Warrant Price immediately prior to such
adjustment by a fraction of which the numerator shall be the number of shares
purchasable upon exercise of each Warrant immediately prior to such adjustment,
and the denominator of which shall be the number of shares so purchasable
immediately thereafter.
(E) For the purpose of any computation under subparagraphs (B)
and (C) of this Section, the current market price per share of Common Stock on
any record date shall be deemed to be the average of the daily closing prices
for the five consecutive business days selected by the Board of Directors
commencing not more than 20 trading days before, and ending not later than, the
earlier of the day in question and the day before the "ex" date with respect to
the issuance or distribution requiring such computation. For this purpose, the
term "lexl date," when used with respect to any issuance or distribution, shall
mean the first date on which the Common Stock trades regular way on the
applicable exchange or in the applicable market without the right to receive
such issuance or distribution. The closing price for each date shall be the
reported last sale price regular way or, in case no such reported sale takes
place on such day, the average of the reported closing bid and asked prices
regular way, in either case on the New York Stock Exchange or, if the Common
Stock is not listed or admitted to trading on such exchange, on the principal
national securities exchange on which the Common Stock is listed or admitted to
trading, or, if not listed or admitted to trading on any national securities
exchange, on the National Association of Securities Dealers Automated
Quotations National Market System or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or quoted on such
National Market System, the average of the closing bid and asked prices in
the over-the-
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counter market as furnished by any New York Stock Exchange member firm
selected from time to time by the Company for that purpose.
(F) In the case of any (i) consolidation or merger of the
Company with or in to any entity (other than a consolidation or merger that
does not result in any reclassification, conversion, exchange or cancellation
of outstanding shares of Common Stock of the Company), (ii) sale, transfer,
lease or conveyance of all or substantially all of the assets of the Company or
(iii) reclassification, capital reorganization or change of the Common Stock
(other than solely a change in par value, or from par value to no par value),
each holder of any Warrant then outstanding shall have the right thereafter
upon exercise of such Warrant to receive only the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
sale, transfer, capital reorganization or reclassification by a holder of the
number of shares of Common Stock of the Company for which such Warrant would
have been exercised immediately prior to such consolidation, merger, sale,
transfer, capital reorganization or reclassification, assuming such holder of
Common Stock of the Company is not an entity with which the Company
consolidated or into which the Company merged or which merged into the Company
or to which such sale or transfer was made, as the case may be ("constituent
entity"), or an affiliate of a constituent entity, and failed to exercise his
or her rights of election, if any, as to the kind or amount of securities, cash
and other property receivable upon such consolidation, merger, sale or transfer
(provided that if the kind or amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer is not the same
for each share of Common Stock of the Company held immediately prior to such
consolidation, merger, sale or transfer by other than a constituent entity or
an affiliate thereof and in respect of which such rights of election shall not
have been exercised ("non-electing share"), then for the purpose of this
subsection (E) the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by each
non-electing share shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares). If necessary, appropriate
adjustment shall be made in the application of the provisions set forth herein
with respect to the rights and interests thereafter of the holders of the
Warrant, to the end that the provisions set forth herein shall thereafter
correspondingly be made applicable, as nearly as may reasonably be, in relation
to any shares of stock or other securities or property thereafter deliverable
on the
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exercise of the Warrant. The above provisions shall similarly apply to
successive consolidations, mergers, sales, transfers, capital reorganizations
and reclassifications. The Company shall not effect any such consolidation,
merger, sale or transfer, unless prior to or simultaneously with the
consummation thereof the successor company or entity (if other than the
Company) resulting from such consolidation, merger, sale or transfer shall
assume, by written instrument, the obligation to deliver to the holder of each
Warrant such shares of stock, securities or assets as, in accordance with the
foregoing provisions, such holder may be entitled to receive under this Section
2.02.
(G) No adjustment in the number of shares purchasable upon
exercise of each Warrant will be made for the issuance of shares of capital
stock to employees pursuant to the Company's or any of its subsidiaries' stock
option, stock ownership or other benefit plans. No adjustment will be required
to be made in the number of shares purchasable upon exercise of each Warrant
until cumulative adjustments require an adjustment of at least 1% of such
number of shares.
(H) In any case in which this Section 2.02(1) shall require
that an adjustment be made retroactively immediately following a record date,
the Company may elect to defer for a reasonable period not to exceed - days
issuing to the holder of any warrant exercised after such record date the
shares of the Company issuable upon such exercise over and above the shares
issuable upon such exercise only on the basis of the warrant exercise price
prior to adjustment.
(I) Except as herein otherwise expressly provided, no
adjustment in the Warrant Price shall be made by reason of the issuance of
shares, or securities convertible into or exchangeable for shares, or
securities carrying the right to purchase any of the foregoing or for any other
reason whatsoever.
(J) Irrespective of any of the adjustments in the Warrant
Price or the number of shares, Warrant Certificates theretofore issued may
continue to express the same prices and number of shares as are stated in a
similar Warrant Certificate issuable initially, or at some subsequent time,
pursuant to this Agreement, and such number of shares specified therein shall
be deemed to have been so adjusted.
[(2) No fractional shares of Common Stock shall be issued upon
the exercise of Warrants. If more than one Warrant shall be exercised at one
time by the same holder,
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the number of full shares that shall be issuable upon such exercise shall be
computed on the basis of the aggregate number of shares purchased pursuant to
the Warrants so exercised. Instead of any fractional share of Common Stock
that would otherwise be issuable upon exercise of any Warrant, the Company
shall pay a cash adjustment in respect of such fraction in an amount equal to
the same fraction of the last sales price (or bid price if there were no sales)
per share of Common Stock in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange on the business day that
next precedes the day of exercise or, if the Common Stock is not then listed or
admitted to trading on the New York Stock Exchange, an amount equal to the same
fraction of the market price per share of Common Stock (as determined in a
manner described by the Board of Directors of the Company) at the close of
business on the business day that next precedes the day of exercise.]
(3) Before taking any action that would cause an adjustment
decreasing the Warrant Price so that the Warrant Price is below the then par
value of the shares of Common Stock, the Company will take any corporate action
that may, in the opinion of its counsel, be necessary in order that the Company
may validly and legally issue fully paid and nonassessable shares of Common
Stock at the Warrant Price as so adjusted.
(4) Whenever the Warrant Price then in effect is adjusted as
herein provided, the Company shall mail to each holder of the Warrants at such
holder's address as it shall appear on the books of the Company a statement
setting forth the adjusted Warrant Price, then and thereafter effective under
the provisions hereof together with the facts, in reasonable detail, upon which
such adjustment is based.
[(5) In case (i) the Company shall declare a dividend (or any
other distribution) on its Common Stock payable otherwise than in cash out of
its current or retained earnings, or (ii) the Company shall authorize the
granting to the holders of its Common Stock of rights to subscribe for or
purchase any shares of capital stock of any class or of any other rights, or
(iii) there is to be any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding shares of Common
Stock), or any consolidation or merger to which the Company is a party as
described in Section 3.04 herein and for which approval of any stockholders of
the Company is required, or (iv) any distribution is to be made on or in
respect of the Common Stock in connection with the
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dissolution, liquidation or winding up of the Company as described in Section
3.04 herein, then the Company shall mail to each holder of Warrants at such
holder's address as it shall appear on the book: of the Company, at least
[twenty (20) days (or ten (10) days in any case specified in clause (i) or (ii)
above)] prior to the applicable record date hereinafter specified, a notice
stating (x) the record date for such dividend, distribution or granting of
rights, or, if a record is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such dividend, distribution or
granting of rights are to be determined, or (y) the date on which such
reclassification, consolidation, merger, dissolution, liquidation or winding up
is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, dissolution, liquidation or winding
up. No failure to mail such notice nor any defect therein or in the mailing
thereof shall affect any such transaction or any adjustment in the Warrant
Price required by this Section 2.02.]
SECTION 2.03. Duration of Warrants. Each Warrant may be
exercised in whole at any time, as specified herein, on or after [the date
thereof] [______________] and at or before 5 P.M., [New York City] [Los
Angeles] time, on ________or such later date as the Company may designate, by
notice to the Warrant Agent and the holders of Warrant Certificates mailed to
their addresses as set forth in the record books of the Warrant Agent (the
"Expiration Date"). Each Warrant not exercised at or before 5 P.M., [New York
City] [Los Angeles] time, on the Expiration Date shall become void, and all
rights of the holder of the Warrant Certificate evidencing such Warrant under
this Agreement shall cease.
SECTION 2.04. Exercise of Warrants.
(a) During the period specified in Section 2.03, any whole
number of Warrants may be exercised by providing certain information as set
forth on the reverse side of the Warrant Certificate and by paying in full, in
[lawful money of the United States of America] [in cash or by certified check
or official bank check or by bank wire transfer, in each case,] [by bank wire
transfer] in [immediately available] [next-day] funds the Warrant Price for
each Warrant exercised, to the Warrant Agent at its corporate trust office [or
at __________], provided that such exercise is subject to receipt within five
(5) business days of such [payment] [wire transfer] by the Warrant Agent of the
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Warrant Certificate with the form of election to purchase Warrant Securities
set forth on the reverse side of the Warrant Certificate properly completed and
duly executed. The date on which payment in full of the Warrant Price is
received by the Warrant Agent shall, subject to receipt of the Warrant
Certificate as aforesaid, be deemed to be the date on which the Warrant is
exercised. The Warrant Agent shall deposit all funds received by it in payment
of the Warrant Price in an account of the Company maintained with it and shall
advise the Company by telephone at the end of each day on which a [payment)
[wire transfer] for the exercise of Warrants is received of the amount so
deposited to its account. The Warrant Agent shall promptly confirm such
telephone advice to the Company in writing.
(b) The Warrant Agent shall, from time to time, as promptly
as reasonably practicable, advise the Company of (i) the number of Warrants
exercised, (ii) the instructions of each holder of the Warrant Certificates
evidencing such Warrants with respect to delivery of the Warrant Securities to
which such holder is entitled upon such exercise, (iii) delivery of Warrant
Certificates evidencing the balance, if any, of the Warrants remaining after
such exercise, and (iv) such other information as the Company shall reasonably
require.
(c) As soon as reasonably practicable after the exercise of
any Warrant, the Company shall issue to or upon the order of the holder of the
Warrant Certificate evidencing such Warrant, the Warrant Securities to which
such holder is entitled, in fully registered form, registered in such name or
names as may be directed by such holder. If fewer than all of the Warrants
evidenced by such Warrant Certificate are exercised, the Company shall execute,
and an authorized officer of the Warrant Agent shall manually countersign and
deliver a new Warrant Certificate evidencing the number of such Warrants
remaining unexercised.
(d) The Company shall not be required to pay any stamp or
other tax or other governmental charge required to be paid in connection with
any transfer involved in the issue of the Warrant Securities, and in the event
that any such transfer is involved, the Company shall not be required to issue
or delivery any Warrant Security until such tax or other charge shall have been
paid or it has been established to the Company's satisfaction that no such tax
or other charge is due.
(e) Prior to the issuance of any Warrants there shall have
been reserved, and the Company shall at all times
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keep reserved, out of its authorized but unissued Warrant Securities, a number
of shares sufficient to provide for the exercise of the Warrant Certificates.
ARTICLE III
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
SECTION 3.01. No Rights as Warrant Securityholder Conferred
by Warrants or Warrant Certificates. No Warrant Certificates or Warrant
evidenced thereby shall entitle the holder thereof to any of the rights of a
holder of Warrant Securities, including, without limitation, the right to
receive the payment of dividends or distributions, if any, on the Warrant
Securities or to exercise any voting rights.
SECTION 3.02. Lost, Stolen, Mutilated or Destroyed Warrant
Certificates. Upon receipt by the Warrant Agent of evidence reasonably
satisfactory to it and the Company of the ownership of and the loss, theft,
destruction or mutilation of any Warrant Certificate and of indemnity
reasonably satisfactory to the Warrant Agent and the Company and, in the case
of mutilation, upon surrender thereof to the Warrant Agent for cancellation,
then, in the absence of notice to the Company or the Warrant Agent that such
Warrant Certificate has been acquired by a bona fide purchaser, the Company
shall execute, and an authorized officer of the Warrant Agent shall manually
countersign and deliver, in exchange for or in lieu of the lost, stolen,
destroyed or mutilated Warrant Certificate, a new Warrant Certificate of the
same tenor and evidencing a like number of Warrants. Upon the issuance of any
new Warrant Certificate 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 Warrant Agent) in connection therewith. Every substitute
Warrant Certificate executed and delivered pursuant to this Section in lieu of
any lost, stolen or destroyed Warrant Certificate shall be at any time
enforceable by anyone, and shall be entitled to the benefits of this Agreement
equally and proportionately with any and all other Warrant Certificates duly
executed and delivered 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 of mutilated, lost, stolen or destroyed Warrant
Certificates.
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SECTION 3.03. Holder of Warrant Certificate May Enforce
Rights. Notwithstanding any of the provisions of this Agreement, any holder of
a Warrant Certificate, without the consent of the Warrant Agent, the holder of
any Warrant Securities or the holder of any other Warrant Certificate, may, in
such holder's own behalf and for such holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, such holder's right to
exercise the Warrants evidenced by such holder's Warrant Certificate in the
manner provided in such holder's Warrant Certificate and in this Agreement.
SECTION 3.04. Reclassification, Consolidation, Merger, Sale,
Conveyance or Lease. In case any of the following shall occur while any
Warrants are outstanding: (a) any reclassification or change of the outstanding
shares of Warrant Securities (other than solely a change in par value or from
par value to no par value), or (b) any consolidation or merger to which the
Company is party (other than a consolidation or a merger in which the Company
is the continuing corporation and which does not result in any reclassification
of, or change in, the outstanding shares of Warrant Securities issuable upon
exercise of the Warrants), or (c) any sale, transfer, conveyance or lease to
another corporation of the property of the Company as an entirety or
substantially as an entirety, the Company, or such successor or purchasing
corporation, as the case may be, shall make appropriate provision by amendment
of this Agreement or otherwise so that the holders of the Warrants then
outstanding shall have the right at any time thereafter, upon exercise of such
Warrants, to purchase the kind and amount of shares of stock and other
securities and property receivable upon such a reclassification, change,
consolidation, merger, sale, transfer, conveyance or lease as would be received
by a holder of the number of shares of Warrant Securities issuable upon
exercise of such Warrant immediately prior to such reclassification, change,
consolidation, merger, sale, transfer, conveyance or lease, and, in the case of
a consolidation, merger, sale, conveyance or lease the Company shall thereupon
be relieved of any further obligation hereunder or under the Warrants, and the
Company as the predecessor corporation may thereupon or any time thereafter be
dissolved, wound up or liquidated. Such successor or assuming corporation
thereupon may cause to be signed, and may issue either in its own name or in
the name of the Company, any or all of the Warrants issuable hereunder that
theretofore shall not have been signed by the Company, and may execute and
deliver Warrant Securities in its own name, in fulfillment of its obligations
to delivery Warrant Securities upon exercise of the Warrants. All the
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Warrants so issued shall in all respects have the same legal rank and benefit
under this Agreement as the Warrants theretofore or thereafter issued in
accordance with the terms of this Agreement as though all of such Warrants had
been issued at the date of the execution hereof. In any case of any such
reclassification, change, consolidation, merger, conveyance, transfer or lease,
such changes in phraseology and form (but not in substance) may be made in the
Warrants thereafter to be issued as may be appropriate.
The Warrant Agent may receive a written opinion of legal
counsel as conclusive evidence that any such reclassification, change,
consolidation, merger, conveyance, transfer or lease complies with the
provisions of this Section 3.04.
ARTICLE IV
EXCHANGE AND TRANSFERS OF WARRANT CERTIFICATES
SECTION 4.01. Exchange and Transfer of Warrant Certificates.
[If Offered Securities with Warrants that are immediately detachable -- Upon]
[(If Offered Securities with Warrants that are not immediately detachable --
Prior to the Detachable Date a Warrant Certificate may be exchanged or
transferred only together with the Offered Security to which the Warrant
Certificate was initially attached, and only for the purpose of effecting or in
conjunction with an exchange or transfer of such Offered Security. Prior to
any Detachable Date, each transfer of the Offered Security [on the register of
the Offered Securities]) shall operate also to transfer the related Warrant
Certificates. After the Detachable Date upon] surrender at the corporate trust
office of the Warrant Agent [or ____________], Warrant Certificates evidencing
Warrants may be exchanged for Warrant Certificates in other denominations
evidencing such Warrants or the transfer thereof may be registered in whole or
in part; provided that such other Warrant Certificates evidence the same
aggregate number of Warrants as the Warrant Certificates so surrendered. The
Warrant Agent shall keep, at its corporate trust office [and at ________],
books in which, subject to such reasonable regulations as it may prescribe, it
shall register Warrant Certificates and exchanges and transfers of outstanding
Warrant Certificates, upon surrender of the Warrant Certificates to the Warrant
Agent at its corporate trust office [or ________] for exchange or registration
of transfer, properly endorsed or accompanied by appropriate instruments of
registration of transfer and written instructions for transfer, all in form
satisfactory to the Company and the Warrant Agent. No
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service charge shall be made for any exchange or registration of transfer of
Warrant Certificates, but the Company may require payment of a sum sufficient
to cover any stamp or other tax or other governmental charge that may be
imposed in connection with any such exchange or registration of transfer.
Whenever any Warrant Certificates are so surrendered for exchange or
registration of transfer, an authorized officer of the Warrant Agent shall
manually countersign and deliver to the person or persons entitled thereto a
Warrant Certificate or Warrant Certificates duly authorized and executed by the
Company, as so requested. The Warrant Agent shall not be required to effect
any exchange or registration or transfer that will result in the issuance of a
Warrant Certificate evidencing a fraction of a Warrant or a number of full
Warrants and a fraction of a Warrant. All Warrant Certificates issued upon any
exchange or registration of transfer of Warrant Certificates shall be the valid
obligation of the Company, evidencing the same obligations, and entitled to the
same benefits under this Agreement, as the Warrant Certificate surrendered for
such exchange or registration of transfer.
SECTION 4.02. Treatment of Holders of Warrant Certificates.
[If Offered Securities and Warrants are not immediately detachable -- Prior to
the Detachable Date, the Company, the Warrant Agent and all other persons may
treat the owner of the Offered Security as the owner of the Warrant
Certificates initially attached thereto for any purpose and as the person
entitled to exercise the rights represented by the Warrants evidenced by such
Warrant Certificates, any notice to the contrary notwithstanding. After the
Detachable Date and prior to due presentment of a Warrant Certificate for
registration of transfer,] [t][T]he Company and the Warrant Agent may treat the
registered holder of a Warrant Certificate as the absolute owner thereof for
any purpose and as the person entitled to exercise the rights represented by
the Warrants evidenced thereby, any notice to the contrary notwithstanding.
SECTION 4.03. Cancellation of Warrant Certificates. Any
Warrant Certificate surrendered for exchange, registration of transfer or
exercise of the Warrants evidenced thereby shall, if surrendered to the
Company, be delivered to the Warrant Agent and all Warrant Certificates
surrendered or so delivered to the Warrant Agent shall be promptly cancelled by
the Warrant Agent and shall not be reissued and, except as expressly permitted
by this Agreement, no Warrant Certificate shall be issued hereunder in exchange
or in lieu thereof. The Warrant Agent shall deliver to the Company from time
to time or otherwise
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dispose of cancelled Warrant Certificates in a manner satisfactory to the
Company.
ARTICLE V
CONCERNING THE WARRANT AGENT
SECTION 5.01. Warrant Agent. The Company hereby appoints
_______________________ as the Warrant Agent of the Company in respect of the
Warrants and the Warrant Certificates upon the terms and subject to the
conditions herein set forth, and ___________________ hereby accepts such
appointment. The Warrant Agent shall have the powers and authority granted to
and conferred upon it in the Warrant Certificates and hereby and such further
powers and authority to act on behalf of the Company as the Company may
hereafter grant to or confer upon it. All of the terms and provisions with
respect to such powers and authority contained in the Warrant Certificates are
subject to and governed by the terms and provisions hereof.
SECTION 5.02. Conditions of Warrant Agent's Obligations. The
Warrant Agent accepts its obligations herein set forth upon the terms and
conditions hereof, including the following to all of which the Company agrees
and to all of which the rights hereunder of the holders from time to time of
the Warrant Certificates shall be subject:
(a) Compensation and Indemnification. The Company agrees
promptly to pay the Warrant Agent the compensation agreed upon with the
Company for all services rendered by the Warrant Agent and to reimburse the
Warrant Agent for reasonable out-of-pocket expenses (including counsel fees)
reasonably incurred without negligence or bad faith by the Warrant Agent in
connection with the services rendered hereunder by the Warrant Agent. The
Company also agrees to indemnify the Warrant Agent for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or bad
faith on the part of the Warrant Agent, arising out of or in connection with
its acting as Warrant Agent hereunder, as well as the costs and expenses of
defending against any claim of such liability.
(b) Agent for the Company. In acting under this Warrant
Agreement and in connection with the Warrant Certificates, the Warrant Agent
is acting solely as agent of the Company and does not assume any obligations
or relationship of agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.
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<PAGE> 18
(c) Counsel. The Warrant Agent may consult with nationally
recognized counsel satisfactory to it, and the written advice of such counsel
shall be full and complete authorization and protection in respect of any
action reasonably taken, suffered or omitted by it hereunder in good faith and
in accordance with the advice of such counsel.
(d) Documents. The Warrant Agent shall be protected and shall
incur no liability for or in respect of any action taken or thing suffered by
it in reliance upon any Warrant Certificate, notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the
proper parties.
(e) Certain Transactions. The Warrant Agent, and its officers,
directors and employees, may become the owner of, or acquire any interest in,
Warrants, with the same rights that it or they would have if it were not the
Warrant Agent hereunder, and, to the extent permitted by applicable law, it or
they may engage or be interested in any financial or other transaction with the
Company and may act on, or as depositary, trustee or agent for, any committee
or body of holders of Warrant Securities or other obligations of the Company as
freely as if it were not the Warrant Agent hereunder. Nothing in this Warrant
Agreement shall be deemed to prevent the Warrant Agent from acting as Trustee
under any of the Indentures.
(f) No Liability for Interest. Unless otherwise agreed with
the Company, the Warrant Agent shall have no liability for interest on any
monies at any time received by it pursuant to any of the provisions of this
Agreement or of the Warrant Certificates.
(g) No Liability for Invalidity. The Warrant Agent shall have
no liability with respect to any invalidity of this Agreement or any of the
Warrant Certificates (except as to the Warrant Agent's countersignature
thereon).
(h) No Responsibility for Represents. The Warrant Agent shall
not be responsible for any of the recitals or representations herein or in the
Warrant Certificates (except as to the Warrant Agent's countersignature
thereon), all of which are made solely by the Company.
(i) No Implied Obligations. The Warrant Agent shall be
obligated to perform only such duties as are herein and in the Warrant
Certificates specifically set forth and
18
<PAGE> 19
no implied duties or obligations shall be read into this Agreement or the
Warrant Certificates against the Warrant Agent. The Warrant Agent shall not be
accountable or under any duty or responsibility for the use by the Company of
any of the Warrant Certificates authenticated by the Warrant Agent and
delivered by it to the Company pursuant to this Agreement or for the
application by the Company of the proceeds of the Warrant Certificates. The
Warrant Agent shall have no duty or responsibility in case of any default by
the Company in the performance of its covenants or agreements contained herein
or in the Warrant Certificates or in the case of a receipt of any written
demand from a holder of a Warrant Certificate with respect to such default,
including, without limiting the generality of the foregoing, any duty or
responsibility to initiate or attempt to initiate any proceedings at law or
otherwise or, except as provided in Section 7.02 hereof, to make any demand
upon the Company.
SECTION 5.03. Resignation and Appointment of Successor.
(a) The Company agrees, for the benefit of the holders from
time to time of the Warrant Certificates, that there shall at all times be a
Warrant Agent hereunder until all the Warrants have been exercised or are no
longer exercisable.
(b) The Warrant Agent may at any time resign as such agent by
giving written notice to the Company of such intention on its part, specifying
the date on which its desired resignation shall become effective; provided that
such date shall be not less than three (3) months after the date on which such
notice is given unless the Company otherwise agrees. The Warrant Agent
hereunder may be removed at any time by the filing with it of an instrument in
writing signed by or on behalf of the Company and specifying such removal and
the intended date when it shall become effective. Such resignation or removal
shall take effect upon the appointment by the Company, as hereinafter provided,
of a successor Warrant Agent (which shall be a bank or trust company authorized
under the laws of the jurisdiction of its organization to exercise corporate
trust powers) and the acceptance of such appointment by such successor Warrant
Agent. The obligation of the Company under Section 5.02(a) shall continue to
the extent set forth therein, notwithstanding the resignation or removal of the
Warrant Agent.
(c) In case at any time the Warrant Agent shall resign, or
shall be removed, or shall become incapable of
19
<PAGE> 20
acting, or shall be adjudged a bankrupt or insolvent, or shall commence a
voluntary case under the Federal bankruptcy laws, as now or hereafter
constituted, or under any other applicable Federal or state bankruptcy,
insolvency or similar law or shall consent to the appointment of or taking
possession by a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Warrant Agent or its property
or affairs, or shall make an assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become due,
or shall take corporate action in furtherance of any such action, or a decree
or order for relief by a court having jurisdiction in the premises shall have
been entered in respect of the Warrant Agent in an involuntary case under the
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or state bankruptcy, insolvency or similar law; or a decree
or order by a court having jurisdiction in the premises shall have been entered
for the appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or similar official) of the Warrant Agent or of its property or
affairs, or any public officer shall take charge or control of the Warrant
Agent or of its property or affairs for the purpose of rehabilitation,
conservation, winding up or liquidation, a successor Warrant Agent, qualified
as aforesaid, shall be appointed by the Company by an instrument in writing,
filed with the successor Warrant Agent. Upon the appointment as aforesaid of a
successor Warrant Agent and acceptance by the successor Warrant Agent of such
appointment, the Warrant Agent shall cease to be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder, and thereupon such successor
Warrant Agent, without any further act, deed or conveyance, shall become vested
with all the authority, rights, powers, trusts, duties and obligations of such
predecessor with like effect as if originally named as Warrant Agent hereunder,
and such predecessor, upon payment of its charges and disbursements then
unpaid, shall thereupon become obligated to transfer, deliver and pay over, and
such successor Warrant Agent shall be entitled to receive, all monies,
securities and other property on deposit with or held by such predecessor, as
Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder
may be merged or converted or any corporation with which the Warrant Agent may
be consolidated, or any corporation resulting from any merger, conversion or
20
<PAGE> 21
consolidation to which the Warrant Agent shall be a party, or any corporation
to which the Warrant Agent shall sell or otherwise transfer all or
substantially all the assets and business of the Warrant Agent, provided that
it shall be qualified as aforesaid, shall be the successor Warrant Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto.
ARTICLE VI
[ACCELERATION OF WARRANTS]
SECTION 6.01. Acceleration. At any time on or after
_______________, the Company shall have the right to accelerate any or all
Warrants at any time by causing them to expire at the Close of Business on the
day next preceding a specified date (the "Acceleration Date"), if the Market
Price (as hereinafter defined) of the Common Stock equals or exceeds _____
percent (___%) of the then-effective Warrant Price, adjusted as if no changes
in such Warrant Price had been made pursuant to Section 2.02, on any twenty
(20) Trading Days (as hereinafter defined) within a period of thirty (30)
consecutive Trading Days ending no more than five (5) Trading Days prior to the
date on which the Company gives notice to the Warrant Agent of its election to
accelerate the Warrants.
SECTION 6.02. Determination of Market Price. "Market Price"
for each Trading Day shall be the last reported closing price regular way (or,
if no such price is reported, the average of the reported closing bid and asked
prices regular way) reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the New York Stock Exchange, or if the Common Stock is not listed or admitted
to trading on such Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the principal national securities exchange on which the Common Stock
is listed or admitted to trading, or if not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ, or such other system then in use, or if on any
such date the Shares of Common Stock are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by any New York
Stock Exchange firm selected from time to time by the Company for the purpose.
"Trading Day" shall be each Monday through Friday,
21
<PAGE> 22
other than any day on which securities are not traded in the system or on the
exchange that is the principal market for the Common Stock, as determined by
the Board of Directors of the Company.
SECTION 6.03. Acceleration of Portion of Warrants. In the
event of an acceleration of less than all of the Warrants, the Warrant Agent
shall select the Warrants to be accelerated by lot, pro rata or in such other
manner as it deems, in its discretion, to be fair and appropriate.
SECTION 6.04. Notice. Notice of an acceleration specifying the
Acceleration Date, shall be sent by mailing first class, postage prepaid, to
each registered holder of a Warrant Certificate representing a Warrant
accelerated as such holder's address appearing on the Warrant register not more
than sixty (60) days nor less than thirty (30) days before the Acceleration
Date. Such notice of an acceleration also shall be given no more than twenty
(20) days, and no less than ten (10) days, prior to the mailing of notice to
registered holders of Warrant pursuant to this Section, by publication at least
once in a newspaper of general circulation in the City of Los Angeles,
California, and the City of New York, New York.
SECTION 6.05. Time of Acceleration. Any Warrant accelerated
may be exercised until the 5:00 P.M. Los Angeles, California time on the
business day next preceding the Acceleration Date. The Warrant Price shall be
payable as provided in this Warrant Agreement.]
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Amendment. This Agreement may be amended by
the parties hereto, without the consent of the holder of any Warrant
Certificate, for the purpose of curing any ambiguity, or of curing, correcting
or supplementing any defective provision contained herein, or making any other
provisions with respect to matters or questions arising under this Agreement as
the Company and the Warrant Agent may deem necessary or desirable; provided,
however, that such action shall not affect adversely the interests of the
holders of the Warrant Certificates.
SECTION 7.02. Notices and Demands to the Company and Warrant
Agent. If the Warrant Agent shall receive any notice or demand addressed to
the Company by the holder of a Warrant Certificate pursuant to the provisions
of the
22
<PAGE> 23
Warrant Certificates, the Warrant Agent shall promptly forward such notice or
demand to the Company.
SECTION 7.03. Addresses. Any communication from the Company
to the Warrant Agent with respect to this Agreement shall be addressed to
___________________, Attention: ____________________ and any communication
from the Warrant Agent to the Company with respect to this Agreement shall be
addressed to American Health Properties, Inc., 6400 S. Fiddler's Green Circle,
Suite 1800, Englewood, Colorado, 80111, Attention: Executive Vice President
and Chief Financial Officer (or such other address as shall be specified in
writing by the Warrant Agent or by the Company).
SECTION 7.04. Applicable Law. The validity, interpretation and
performance of this Agreement and each Warrant Certificate issued hereunder and
of the respective terms and provisions thereof shall be governed by, and
construed in accordance with, the laws of the State of [California] [New York].
SECTION 7.05. Delivery of Prospectus. The Company will
furnish to the Warrant Agent sufficient copies of a prospectus relating to the
Warrant Securities deliverable upon exercise of the Warrants (the
"Prospectus"), and the Warrant Agent agrees that upon the exercise of any
Warrant, the Warrant Agent will deliver a Prospectus to the holder of the
Warrant Certificate evidencing such Warrant prior or concurrently with the
delivery of the Warrant Securities issued upon such exercise. The Warrant
Agent shall not, by reason of any such delivery, assume any responsibility for
the accuracy or adequacy of such Prospectus.
SECTION 7.06. Obtaining of Governmental Approvals. The
Company will from time to time take all action which may be necessary to obtain
and keep effective any and all permits, consents and approvals of governmental
agencies and authorities and securities acts filings under Federal and state
laws (including without limitation a registration statement in respect of the
Warrants and Warrant Securities under the Securities Act of 1933, as amended),
which may be or become requisite in connection with the issuance, sale,
transfer, and delivery of the Warrant Securities issued upon exercise of the
Warrant Certificates, the exercise of the Warrants, the issuance, sale,
transfer and delivery of the Warrants or upon the expiration of the period
during which the Warrants are exercisable.
23
<PAGE> 24
SECTION 7.07. Persons Having Rights under Warrant Agreement.
Nothing in this Agreement shall give to any person other than the Company, the
Warrant Agent and the holders of the Warrant Certificates any right, remedy or
claim under or by reason of this Agreement.
SECTION 7.08. Headings. The descriptive headings of the
several Articles and Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 7.09. Counterparts. This Agreement may be executed
in any number of counterparts, each of which as so executed shall be deemed to
be an original, but such counterparts shall together constitute but one and the
same instrument.
SECTION 7.10. Inspection of Agreement. A copy of this
Agreement shall be available at all reasonable times at the principal corporate
trust office of the Warrant Agent for inspection by the holder of any Warrant
Certificate. The Warrant Agent may require such holder to submit his Warrant
Certificate for inspection by it.
IN WITNESS WHEREOF American Health Properties, Inc. and
___________ have caused this Agreement to be signed by their respective duly
authorized officers, and their respective corporate seals to be affixed
hereunto, and the same to be attested by their respective Secretaries or one of
their respective Assistant Secretaries, all as of the day and year first above
written.
AMERICAN HEALTH PROPERTIES, INC.
By: ____________________________
Title:
24
<PAGE> 25
Attest:
_________________________
Title:
[Warrant Agent]
By: ____________________________
Title:
Attest:
_________________________
Title:
25
<PAGE> 26
Exhibit A
FORM OF WARRANT CERTIFICATE
[FACE OF WARRANT CERTIFICATE]
<TABLE>
<S> <C>
[Form of Legend if Offered Securities with Prior to ___________ this Warrant Certificate
Warrants that are not immediately detachable. cannot be transferred or exchanged unless
attached to a [Title of Offered Securities].]
[Form of Legend if Warrants are not immediately Prior to ___________, Warrants evidenced by this
exercisable. Warrant Certificate cannot be exercised.]
</TABLE>
EXERCISABLE ONLY IF COUNTERSIGNED BY THE
WARRANT AGENT AS PROVIDED HEREIN
AMERICAN HEALTH PROPERTIES, INC.
WARRANTS TO PURCHASE
Common Stock
VOID AFTER 5 P.M. [NEW YORK CITY TIME] [LOS ANGELES TIME], ON
_____________.
No. __________ __________ Warrants
This certifies that ____________________ or registered assigns is the
registered owner of the above indicated number of Warrants, each Warrant
entitling such owner [if Offered Securities with Warrants that are not
immediately detachable --, subject to the registered owner qualifying as a
"holder" of this Warrant Certificate, as hereinafter defined] to purchase, at
any time [after 5 P.M., [New York City] [Los Angeles] time, on
____________________, __________ shares of Common Stock (the "Warrant
Securities"), of American Health Properties, Inc. (the "Company") on the
following basis: [during the period from __________, through and including
____________,] the exercise price of each Warrant will be ___________ during
the period from _________, through and including ____________,] the exercise
price of each Warrant will be ___________ (the "Warrant Price"), subject to
such adjustments as provided in Section 2.02 of the Warrant Agreement (as
defined below). Other than as provided in Section 2.02 of the Warrant
A-1
<PAGE> 27
Agreement, no adjustment shall be made for any dividends on any Warrant
Securities issuable upon exercise of any Warrant. The holder may exercise the
Warrants evidenced hereby by providing certain information set forth on the
back hereof and by paying in full [in lawful money of the United States of
America] [in cash or by certified check or official bank check or [by bank wire
transfer, in each case,] (by bank wire transfer] in [immediately available]
[next-day] funds, the Warrant Price for each Warrant exercised to the Warrant
Agent (as hereinafter defined) and by surrendering this Warrant Certificate,
with the purchase form on the back hereof duly executed, at the corporate trust
office of [name of Warrant Agent], [or __________], which is, on the date
hereof, at the address specified on the reverse hereof, and upon compliance
with and subject to the conditions set forth herein and in the Warrant
Agreement (as hereinafter defined).
The term "holder" as used herein shall mean [if Offered Securities with
Warrants that are not immediately detachable --, prior to __________ (the
"Detachable Date"), the registered owner of the Company's [title of Offered
Securities] to which this Warrant Certificate is initially attached, and after
such Detachable Date,] the person in whose name at the time of this Warrant
Certificate shall be registered upon the books to be maintained by the Warrant
Agent for that purpose pursuant to Section 4.01 of the Warrant Agreement.
Any whole number of Warrants evidenced by this Warrant Certificate may
be exercised to purchase Warrant Securities in registered form. Upon any
exercise of fewer than all of the Warrants evidenced by this Warrant
Certificate, there shall be issued to the holder hereof a new Warrant
Certificate evidencing the number of Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of _________ (the "Warrant Agreement") by and
between the Company and the Warrant Agent and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which terms and
provisions the holder of this Warrant Certificate consents by acceptance
hereof. Copies of the Warrant Agreement are on file at the above-mentioned
office of the Warrant Agent [and at ____________].
[If Offered Securities with registered Warrants that are not
immediately detachable -- Prior to __________, this Warrant Certificate may be
exchanged or transferred only together with the [Title of Offered Securities]
(the
A-2
<PAGE> 28
"Offered Securities") to which this Warrant Certificate was initially attached,
and only for the purpose of effecting, or in conjunction with, an exchange or
transfer of such Offered Security. After such date, this] [if Offered
Securities with registered Warrants that are immediately detachable -- Transfer
of this] Warrant Certificate may be registered when this Warrant Certificate is
surrendered at the corporate trust office of the Warrant Agent [or __________]
by the registered owner or such owner's assigns, in person or by an attorney
duly authorized in writing, in the manner and subject to the limitations
provided in the Warrant Agreement.]
[If Offered Securities with Warrants that are not immediately
detachable -- Except as provided in the immediately preceding paragraph, after]
[If Offered Securities with Warrants which are immediately detachable or
Warrant alone -- After] countersignature by the Warrant Agent and prior to the
expiration of this Warrant Certificate, this Warrant Certificate may be
exchanged at the corporate trust office of the Warrant Agent [or __________]
for Warrant Certificates representing the same aggregate number of Warrants.
This Warrant Certificate shall not entitle the holder hereof to any of
the rights of a holder of the Warrant Securities, including, without
limitation, the right to receive payments of dividends or distributions, if
any, on the Warrant Securities or to exercise any voting rights.
This Warrant Certificate shall not be valid or obligatory for any
purpose until countersigned by the Warrant Agent.
Dated as of __________________
AMERICAN HEALTH PROPERTIES, INC.
By: ____________________________
A-3
<PAGE> 29
Attest:
_______________________________________
Countersigned:
_______________________________________
As Warrant Agent
By: ___________________________________
Authorized Signature
A-4
<PAGE> 30
[REVERSE OF WARRANT CERTIFICATE]
INSTRUCTIONS FOR EXERCISE OF WARRANT
To exercise the Warrants evidenced hereof, the holder must
pay in United States dollars [in cash or by certified check or official bank
check or by bank wire transfer] [by bank wire transfer] in [immediately
available] [next-day] funds the Warrant Price in full for Warrants exercised to
[insert name of Warrant Agent] [Corporate Trust Department] [insert address of
Warrant Agent], Attention: __________ [or __________], which [payment] [wire
transfer] must specify the name of the holder and the number of Warrants
exercised by such holder. In addition, the holder must complete the
information required below and present this Warrant Certificate in person or by
mail (certified or registered mail is recommended) to the Warrant Agent at the
appropriate address set forth below. This Warrant Certificate, completed and
duly executed, must be received by the Warrant Agent within five business
days of the [payment] [wire transfer].
TO BE EXECUTED UPON EXERCISE OF WARRANT
The undersigned hereby irrevocably elects to exercise
__________ Warrants, evidenced by this Warrant Certificate, to purchase
__________ shares of the Common Stock (the "Warrant Securities") of American
Health Properties, Inc. and represents that the undersigned has tendered
payment for such Warrant Securities in Dollars [in cash or by certified check
or official bank check or by bank wire transfer, in each case] [by bank wire
transfer] in [immediately available] [next-day] funds to the order of American
Health Properties, Inc., c/o [insert name and address of Warrant Agent], in the
amount of _________ in accordance with the terms hereof. The undersigned
requests that said amount of Warrant Securities be in fully registered form in
the authorized denominations, registered in such names and delivered all as
specified in accordance with the instructions set forth below.
If the number of Warrants exercised is less than all of
the Warrants evidenced hereby, the undersigned requests that a new Warrant
Certificate representing the remaining Warrant evidenced hereby be issued and
delivered to the undersigned unless otherwise specified in the instruction
below.
A-5
<PAGE> 31
<TABLE>
<S> <C>
Dated: _____________________ Name ______________________________
____________________________ Address ___________________________
(Insert Social Security or
Other Identifying Number of ___________________________
Holder) (Signature must conform
Signature Guaranteed in all respects to name of
____________________________ holder as specified on the
face of this Warrant
Certificate and must bear a
signature guarantee by a
bank, trust company or
member broker of the New
York or Pacific Stock
Exchange)
</TABLE>
The Warrants evidenced hereby may be exercised at the following
addresses:
By hand at _____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
By mail at _____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
[Instructions as to form and delivery of Warrant Securities
and, if applicable, Warrant Certificates evidencing
unexercised Warrants -- complete as appropriate.]
A-6
<PAGE> 32
ASSIGNMENT
[FORM OF ASSIGNMENT TO BE EXECUTED IF HOLDER
DESIRES TO TRANSFER WARRANTS EVIDENCED HEREBY]
FOR VALUE RECEIVED ______________________________ hereby sells, assigns
and transfers unto
__________________________ _________________________
(Please print name) (Please insert social
security or other
identifying number)
__________________________
(Address)
__________________________
(City, including zip code)
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint _________ as Attorney to transfer said
Warrant Certificate on the books of the Warrant Agent with full power of
substitution in the premises.
Dated:
______________________________
Signature
(Signature must conform in
all respects to name of
holder as specified on the
face of this Warrant
Certificate and must bear a
signature guarantee by a
bank, trust company or member
broker of the New York
or Pacific Stock Exchange)
Signature Guaranteed:
_________________________
A-7
<PAGE> 1
AMERICAN HEALTH PROPERTIES, INC.
DEBT WARRANT AGREEMENT
THIS WARRANT AGREEMENT, dated as of __________, is by and
between American Health Properties, Inc., a Delaware corporation (hereinafter
called the "Company," which term includes any successor corporation under the
Indenture hereinafter referred to), and ________________, as Warrant Agent
(herein called the "Warrant Agent").
WHEREAS, the Company has entered into an indenture (the
"[Senior] [Subordinated] Indenture") dated as of ______________ between the
Company and __________________, providing for the issuance from time to time of
its unsecured [Senior] [subordinated] debentures, notes or other evidences of
indebtedness (the "[Senior] [Subordinated] Debt Securities"), to be issued in
one or more series as provided in the [senior] [Subordinated] Indenture; [if
Warrant Securities are not under same Indenture as Debt Securities to which
they are attached -- and an Indenture (the "[Senior] [Subordinated] Indenture,"
the Senior and Subordinated Indentures being referred to collectively as the
"Indentures") dated as of _________________ between the Company and
__________________ , as trustee (the "[Senior] (Subordinated] Trustee," (the
Senior and Subordinated Trustees being referred to collectively, as the
"Trustees"), providing for the issuance from time to time of its [senior]
[subordinated] debentures, notes or other evidences of indebtedness (the
"[Senior] [Subordinated] Debt Securities," the [Senior] and [Subordinated] Debt
Securities being referred to collectively as the "Debt Securities"), to be
issued in one or more series as provided in the [_______________] Indenture];
and
WHEREAS, the Company proposes to sell [if Warrants are sold
with Debt Securities -- [title of Debt Securities being offered] (the "Offered
Securities") with] warrant certificates evidencing one or more warrants (the
"Warrants" or individually a "Warrant") representing the right to purchase
[title of Debt Securities purchasable through
----------
* Complete or modify the provisions of this Warrant Agreement as appropriate
to reflect the terms of the Warrants, Warrant Securities and Offered
Securities. Monetary amounts may be in U.S. dollars or in foreign currency
or European Currency Units ("ECU").
<PAGE> 2
exercise of Warrants] (the "Warrant Securities"), such warrant certificates and
other warrant certificates issued pursuant to this Agreement being herein
called the "Warrant Certificates"; and
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company in connection with the issuance, exchange, exercise and
replacement of the Warrant Certificates, and in this Agreement wishes to set
forth, among other things, the form and provisions of the Warrant Certificates
and the terms and conditions on which they may be issued, exchanged, exercised
and replaced;
NOW THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE I
ISSUANCE OF WARRANTS AND EXECUTION AND
DELIVERY OF WARRANT CERTIFICATES
SECTION 1.01. Issuance of Warrants. [If Warrants alone --
Upon issuance, each Warrant Certificate shall evidence one or more Warrants.]
[If offered Securities and Warrants -- Warrants shall be [initially] issued in
connection with the issuance of the offered Securities [but shall be separately
transferable on and after ____________ (the "Detachable Date")] [and shall not
be separately transferable], and each Warrant Certificate shall evidence one or
more Warrants.] Each Warrant evidenced thereby shall represent the right,
subject to the provisions contained herein and therein, to purchase a Warrant
Security in the principal amount of _____________. [If Offered Securities and
Warrants -- Warrant Certificates shall be initially issued in units with the
Offered Securities, and each Warrant Certificate included in such a unit shall
evidence Warrants for each $[_____________] in principal amount of Offered
Securities included in such unit.)
SECTION 1.02. Execution and Delivery of Warrant Certificates.
Each Warrant Certificate, whenever issued, shall be in [registered) [bearer]
form substantially in the form set forth in Exhibit A hereto, shall be dated
______________ and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the officers of the Company executing the
same may approve (execution thereof to be conclusive evidence of such approval)
and as are not inconsistent with the provisions of
2
<PAGE> 3
this Agreement, or as may be required to comply with any law or with any rule
or regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Warrants may be listed, or to conform to usage. The
Warrant Certificates shall be signed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents, and by its Secretary or one of its Assistant Secretaries under its
corporate seal reproduced thereon. Such signatures may be manual or facsimile
signatures of such authorized officers and may be imprinted or otherwise
reproduced on the Warrant Certificates. The seal of the Company may be in the
form of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Warrant Certificates.
No Warrant Certificates shall be valid for any purpose, and no
Warrant evidenced thereby shall be exercisable, until such Warrant Certificate
has been countersigned by the manual signature of the Warrant Agent. Such
signature by the Warrant Agent upon any Warrant Certificate executed by the
Company shall be conclusive evidence that the Warrant Certificate so
countersigned has been duly issued hereunder.
In case any officer of the Company who shall have signed any
of the Warrant Certificates either manually or by facsimile signature shall
cease to be such officer before the Warrant Certificate so signed shall have
been countersigned and delivered by the Warrant Agent, such Warrant
Certificates may be countersigned and delivered notwithstanding that the person
who signed such Warrant Certificates ceased to be such officer of the Company;
and any Warrant Certificate may be signed on behalf of the Company by such
persons as, at the actual date of the execution of such Warrant Certificate,
shall be the proper officers of the Company, although at the date of the
execution of this Agreement any such person was not such officer.
The term "holder" or "holder of a Warrant Certificate" as used
herein shall mean [the bearer of such Warrant Certificate] [any person in whose
name at the time any Warrant Certificate shall be registered upon the books to
be maintained by the Warrant Agent for that purpose] [If Offered Securities and
Warrants are not immediately detachable -- or [the bearer] [upon the register]
of the Offered Securities prior to the Detachable Date. [Prior to the
Detachable Date, the Company will, or will cause the registrar of the Offered
Securities to, make available at all times to the Warrant Agent such
information as to
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holders of the Offered Securities with Warrants as may be necessary to keep the
Warrant Agent's records up to date]].
SECTION 1.03. Issuance of Warrant Certificates. Warrant
Certificates evidencing the right to purchase an aggregate principal amount not
exceeding _____________ aggregate principal amount of Warrant Securities
(except as provided in Sections 2.03(c), 3.02 and 4.01) may be executed by the
Company and delivered to the Warrant Agent upon the execution of this Warrant
Agreement or from time to time thereafter. The Warrant Agent shall, upon
receipt of Warrant Certificates duly executed on behalf of the Company,
countersign Warrant Certificates evidencing Warrants representing the right to
purchase up to __________ principal amount of Warrant Securities and shall
deliver such Warrant Certificates to or upon the order of the Company.
Subsequent to such original issuance of the Warrant Certificates, the Warrant
Agent shall countersign a Warrant Certificate only if the Warrant Certificate
is issued in exchange or substitution for one or more previously countersigned
Warrant Certificates or in connection with their transfer, as hereinafter
provided or as provided in Section 2.03(c).
SECTION 1.04. Temporary Warrant Certificates. Pending the
preparation of definitive Warrant Certificates, the Company may execute, and
upon the order of the Company, the Warrant Agent shall authenticate and
deliver, temporary Warrant Certificates which are printed, lithographed,
typewritten, mimeographed or otherwise produced substantially of the tenor of
the definitive Warrant Certificate in lieu of which they are issued and with
such insertions, omissions, substitutions and other variations as the officers
executing such Warrant Certificate may determine as appropriate, as evidenced
by their execution of such Warrant Certificates.
If temporary Warrant Certificates are issued, the Company will
cause definitive Warrant Certificates to be prepared without unreasonable
delay. After the preparation of definitive Warrant Certificates, the temporary
Warrant Certificates shall be exchangeable for definitive Warrant Certificates
upon surrender of the temporary Warrant Certificates at the corporate trust
office of the Warrant Agent [or _______________], without charge to the holder.
Upon surrender for cancellation of any one or more temporary Warrant
Certificates the Company shall execute and the Warrant Agent shall authenticate
and deliver in exchange therefor definitive Warrant Certificates representing
the same aggregate number of Warrants. Until so exchanged, the temporary
Warrant Certificates shall in all respects be
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entitled to the same benefits under this Agreement as definitive Warrant
Certificates.
ARTICLE II
WARRANT PRICE, DURATION AND
EXERCISE OF WARRANTS
SECTION 2.01. Warrant Price. During the period from
___________, through and including _____________, the exercise price of each
Warrant will be ___________ plus [accrued amortization of the original issue
discount] [accrued interest] from _________________. (In each case, the
original issue discount will be amortized at a _____% annual rate, computed on
an annual basis using the "interest" method and using a 360-day year consisting
of twelve 30-day months]. Such purchase price of Warrant Securities is
referred to in this Agreement as the "Warrant Price." [The original issue
discount for each ________ principal amount of Warrant Securities is
__________.]
SECTION 2.02. Duration of Warrants. Each Warrant may be
exercised in whole at any time, as specified herein, on or after [the date
thereof] [_________] and at or before 5 P.M., [New York City] [Los Angeles]
time, on _________ [or such later date as the Company may designate, by notice
to the Warrant Agent and the holders of Warrant Certificates mailed to their
addresses as set forth in the record books of the Warrant Agent] (the
"Expiration Date"). Each Warrant not exercised at or before 5 P.M., [New York
City] [Los Angeles] time, on the Expiration Date shall become void, and all
rights of the holder of the Warrant Certificate evidencing such Warrant under
this Agreement shall cease.
SECTION 2.03. Exercise of Warrants. (a) During the period
specified in Section 2.02 any whole number of Warrants may be exercised by
providing certain information as set forth on the reverse side of the Warrant
Certificate and by paying in full, in [lawful money of the United States of
America] [applicable currency,] [in cash or by certified check or official bank
check or by bank wire transfer, in each case,] [by bank wire transfer] in
[immediately available] [next-day] funds the Warrant Price for each Warrant
exercised, to the Warrant Agent at its corporate trust office [or at _______],
provided that such exercise is subject to receipt within five (5) business days
of such [payment] [wire transfer] by the Warrant Agent of the Warrant
Certificate with the form of election to purchase Warrant Securities set forth
on the reverse side of the
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Warrant Certificate property completed and duly executed [including any
applicable certifications if the Warrant Securities are issuable in bearer
form]. The date on which payment in full of the Warrant Price is received by
the Warrant Agent shall, subject to receipt of the Warrant Certificate as
aforesaid, be deemed to be the date on which the Warrant is exercised. The
Warrant Agent shall deposit all funds received by it in payment of the Warrant
Price in an account of the Company maintained with it [if non-dollar
denominated funds -- or in such other account designated by the Company] and
shall advise the Company by telephone at the end of each day on which a
[payment] [wire transfer] for the exercise of Warrants is received of the
amount so deposited to its account. The Warrant Agent shall promptly confirm
such telephone advice to the Company in writing.
(b) The Warrant Agent shall, from time to time, as promptly
as practicable, advise the Company and the [Trustee under the Indenture
relating to the Warrant Securities] of (i) the number of Warrants exercised,
(ii) the instructions of each holder of the Warrant Certificates evidencing
such Warrants with respect to delivery of the Warrant Securities to which such
holder is entitled upon such exercise, (iii) delivery of Warrant Certificates
evidencing the balance, if any, of the Warrants remaining after such exercise,
and (iv) such other information as the Company or such Trustee shall reasonably
require.
(c) As promptly as reasonably practicable after the exercise
of any Warrant, the Company shall issue, pursuant to the Indenture, in
authorized denominations to or upon the order of the holder of the Warrant
Certificate evidencing such Warrant, the Warrant Securities to which such
holder is entitled, in [fully registered form, registered in such name or names
as may be directed by such holder] [bearer form, provided the holder has
furnished to the Warrant Agent all certifications required by applicable U.S.
Treasury regulations for the delivery of bearer securities and only if the
Company has no reason to know that the certifications are false. If fewer than
all of the Warrants evidenced by such Warrant Certificate are exercised, the
Company shall execute, and an authorized officer of the Warrant Agent shall
manually countersign and deliver, a new Warrant Certificate evidencing the
number of such Warrants remaining unexercised. [Unless otherwise instructed by
the Company, Warrant Securities in bearer form shall be delivered to or upon
the order of the holder of such Warrant Certificate only outside the United
States and its possessions.]
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(d) The Company shall not be required to pay any stamp or
other tax or other governmental charge required to be paid in connection with
any transfer involved in the issue of the Warrant Securities, and in the event
that any such transfer is involved, the Company shall not be required to issue
or deliver any Warrant Security until such tax or other charge shall have been
paid or it has been established to the Company's satisfaction that no such tax
or other charge is due.
ARTICLE II
OTHER PROVISIONS RELATING TO RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
SECTION 3.01. No Rights as Warrant Securityholder Conferred
by Warrants or Warrant Certificates. No Warrant Certificate or Warrant
evidenced thereby shall entitle the holder thereof to any of the rights of a
holder of Warrant Securities, including, without limitation, the right to
receive the payment of principal of, premium, if any, or interest on Warrant
Securities or to enforce any of the covenants in the [Indenture relating to the
Warrant Securities].
SECTION 3.02. Lost, Stolen, Mutilated or Destroyed Warrant
Certificates. Upon receipt by the Warrant Agent of evidence reasonably
satisfactory to it and the Company of the ownership of and the loss, theft,
destruction or mutilation of any Warrant Certificate and of indemnity
reasonably satisfactory to the Warrant Agent and the Company and, in the case
of mutilation, upon surrender thereof to the Warrant Agent for cancellation,
then, in the absence of notice to the Company or the Warrant Agent that such
Warrant Certificate has been acquired by a bona fide purchaser, the Company
shall execute, and an authorized officer of the Warrant Agent shall manually
countersign and deliver, in exchange for or in lieu of the lost, stolen,
destroyed or mutilated Warrant Certificate, a new Warrant Certificate of the
same tenor and evidencing a like number of Warrants. Upon the issuance of any
new Warrant Certificate 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 Warrant Agent) in connection therewith. Every substitute
Warrant Certificate executed and delivered pursuant to this Section in lieu of
any lost, stolen or destroyed Warrant Certificate shall represent an additional
contractual obligation of the Company, whether or not the mutilated, lost,
stolen or
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destroyed Warrant Certificate shall be at any time enforceable by anyone, and
shall be entitled to the benefits of this Agreement equally and proportionately
with any and all other Warrant Certificates duly executed and delivered
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 of mutilated, lost, stolen or destroyed Warrant Certificates.
SECTION 3.03. Holder of Warrant Certificate May Enforce
Rights. Notwithstanding any of the provisions of his Agreement, any holder of
a Warrant Certificate, without the consent of the Warrant Agent, the Trustee,
the holder of any Warrant Securities or the holder of any other Warrant
Certificate, may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, his right to exercise the
Warrants evidenced by his Warrant Certificate in the manner provided in his
Warrant Certificate and in this Agreement.
SECTION 3.04. Merger, Consolidation, Conveyance, Transfer or
Lease. If at any time there shall be a merger, consolidation, conveyance,
transfer or lease of assets subject to Section ____ of the [Indenture relating
to the Warrant Securities], then in any such event the successor or assuming
corporation referred to therein shall succeed to and be substituted for the
Company, with the same effect, subject to such Indenture, as if it had been
named herein and in the Warrant as the Company; the Company shall thereupon be
relieved of any further obligation hereunder or under the Warrants, and the
Company as the predecessor corporation may thereupon or at any time thereafter
be dissolved, wound up or liquidated. Such successor or assuming corporation
thereupon may cause to be signed, and may issue either in its own name or in
the name of the Company, any or all of the Warrants issuable hereunder that
theretofore shall not have been signed by the Company, and may execute and
deliver Warrant Securities in its own name pursuant to such Indenture, in
fulfillment of its obligations to deliver Warrant Securities upon exercise of
the Warrants. All the Warrants so issued shall in all respects have the same
legal rank and benefit under this Agreement as the Warrants theretofore or
thereafter issued in accordance with the terms of this Agreement as though all
of such Warrants had been issued at the date of the execution hereof. In any
case of any such consolidation, merger, conveyance, transfer or lease, such
changes in phraseology and form (but not in substance) may be made in the
Warrants thereafter to be issued as may be appropriate.
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The Warrant Agent may receive a written opinion of legal
counsel as conclusive evidence that any such consolidation, merger, conveyance,
transfer or lease complies with the provisions of this Section 3.04 and such
Indenture.
ARTICLE IV
EXCHANGE AND TRANSFER
OF WARRANT CERTIFICATES
SECTION 4.01. Exchange and Transfer of Warrant Certificates.
[If Offered Securities with Warrants that are immediately detachable -- Upon]
[If Offered Securities with Warrants that are not immediately detachable --
Prior to the Detachable Date a Warrant Certificate may be exchanged or
transferred only together with the Offered Security to which the Warrant
Certificate was initially attached, and only for the purpose of effecting or in
conjunction with an exchange or transfer of such Offered Security. Prior to
any Detachable Date, each transfer of the Offered Security [on the register of
the Offered Securities] shall operate also to transfer the related Warrant
Certificates. After the Detachable Date upon] surrender at the corporate trust
office of the Warrant Agent [or _______], Warrant Certificates evidencing
Warrants may be exchanged for Warrant Certificates in other denominations
evidencing such Warrants [or the transfer thereof may be registered in whole or
in part]; provided that such other Warrant Certificates evidence the same
aggregate number of Warrants as the Warrant Certificates so surrendered. [The
Warrant Agent shall keep, at its corporate trust office [and at _____], books
in which, subject to such reasonable regulations as it may prescribe, it shall
register Warrant Certificates and exchanges and transfers of outstanding
Warrant Certificates, upon surrender of the Warrant Certificates to the Warrant
Agent at its corporate trust office [_______] for exchange or registration of
transfer, properly endorsed or accompanied by appropriate instruments of
registration of transfer and written instructions for transfer, all in form
satisfactory to the Company and the Warrant Agent.] No service charge shall be
made for any exchange [or registration of transfer] of Warrant Certificates,
but the Company may require payment of a sum sufficient to cover any stamp or
other tax or other governmental charge that may be imposed in connection with
any such exchange [or registration or transfer]. Whenever any Warrant
Certificates are so surrendered for exchange [or registration of transfer], an
authorized officer of the Warrant Agent shall manually countersign and deliver
to the
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person or persons entitled thereto a Warrant Certificate or Warrant
Certificates duly authorized and executed by the Company, as so requested. The
Warrant Agent shall not be required to effect any exchange [or registration of
transfer] that will result in the issuance of a Warrant Certificate evidencing
a fraction of a Warrant or a number of full Warrants and a fraction of a
Warrant. All Warrant Certificates issued upon any exchange [or registration of
transfer] of Warrant Certificates shall be the valid obligations of the
Company, evidencing the same obligations, and entitled to the same benefits
under this Agreement, as the Warrant Certificate surrendered for such exchange
[or registration of transfer].
SECTION 4.02 Treatment of Holders of Warrant Certificates.
[If Offered Securities and Warrants are not immediately detachable -- Prior to
the Detachable Date, the Company, the Warrant Agent and all other persons may
treat the owner of the Offered Security as the owner of the Warrant
Certificates initially attached thereto for any purpose or as the person
entitled to exercise the rights represented by the Warrants evidenced by such
Warrant Certificates, any notice to the contrary notwithstanding. After the
Detachable Date,] [if registered Warrants -- and prior to due presentment of a
Warrant Certificate for registration of transfer,] [t][T]he Company, the
Warrant Agent and all other persons may treat the holder of a Warrant
Certificate as the owner thereof for any purpose and as the person entitled to
exercise the rights represented by the Warrants evidenced thereby, any notice
to the contrary notwithstanding.
SECTION 4.03. Cancellation of Warrant Certificates. Any
Warrant Certificate surrendered for exchange [, registration of transfer] or
exercise of the Warrants evidenced thereby shall, if surrendered to the
Company, be delivered to the Warrant Agent and all Warrant Certificates
surrendered or so delivered to the Warrant Agent shall be promptly cancelled by
the Warrant Agent and shall not be reissued and, except as expressly permitted
by this Agreement, no Warrant Certificate shall be issued hereunder in exchange
or in lieu thereof. The Warrant Agent shall deliver to the Company from time
to time or otherwise dispose of cancelled Warrant Certificates in a manner
satisfactory to the Company.
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ARTICLE V
CONCERNING THE WARRANT AGENT
SECTION 5.01. Warrant Agent. The Company hereby appoints
______________ as Warrant Agent of the Company in respect of the Warrants and
the Warrant Certificates upon the terms and subject to the conditions herein
set forth; and ___________ hereby accepts such appointment. The Warrant Agent
shall have the powers and authority granted to and conferred upon it in the
Warrant Certificates and hereby and such further powers and authority to act on
behalf of the Company as the Company may hereafter grant to or confer upon it.
All of the terms and provisions with respect to such powers and authority
contained in the Warrant Certificates are subject to and governed by the terms
and provisions hereof.
SECTION 5.02. Conditions of Warrant Agent's Obligations. The
Warrant Agent accepts its obligations herein set forth upon the terms and
conditions hereof, including the following to all of which the Company agrees
and to all of which the rights hereunder of the holders from time to time of
the Warrant Certificates shall be subject:
(a) Compensation and Indemnification. The Company agrees
promptly to pay the Warrant Agent the compensation agreed upon with the Company
for all services rendered by the Warrant Agent and to reimburse the Warrant
Agent for reasonable out-of-pocket expenses (including counsel fees) reasonably
incurred without negligence or bad faith by the Warrant Agent in connection
with the services rendered hereunder by the Warrant Agent. The Company also
agrees to indemnify the Warrant Agent for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on the part
of the Warrant Agent, arising out of or in connection with its acting as
Warrant Agent hereunder, as well as the costs and expenses of defending against
any claim of such liability.
(b) Agent for the Company. In acting under this Warrant
Agreement and in connection with the Warrant Certificates, the Warrant Agent is
acting solely as agent of the Company and does not assume any obligations or
relationship of agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.
(c) Counsel. The Warrant Agent may consult with nationally
recognized counsel satisfactory to it, and the written advice of such counsel
shall be full and complete
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authorization and protection in respect of any action reasonably taken,
suffered or omitted by it hereunder in good faith and in accordance with the
advice of such counsel.
(d) Documents. The Warrant Agent shall be protected and
shall incur no liability for or in respect of any action taken or thing
suffered by it in reliance upon any Warrant Certificate, notice, direction,
consent, certificate, affidavit, statement or other paper or document
reasonably believed by it to be genuine and to have been presented or signed by
the proper parties.
(e) Certain Transactions. The Warrant Agent, and its
officers, directors and employees, may become the owner of, or acquire any
interest in, Warrants, with the same rights that it or they would have if it
were not the Warrant Agent hereunder, and, to the extent permitted by
applicable law, it or they may engage or be interested in any financial or
other transaction with the Company and may act on, or as depositary, trustee or
agent for, any committee or body of Holders of Warrant Securities or other
obligations of the Company as freely as if it were not the Warrant Agent
hereunder. Nothing in this Warrant Agreement shall be deemed to prevent the
Warrant Agent from acting as Trustee under any of the Indentures.
(f) No Liability for Interest. Unless otherwise agreed with
the Company, the Warrant Agent shall have no liability for interest on any
monies at any time received by it pursuant to any of the provisions of this
Agreement or of the Warrant Certificates.
(g) No Liability for Invalidity. The Warrant Agent shall
have no liability with respect to any invalidity of this Agreement or any of
the Warrant Certificates (except as to the Warrant Agent's countersignature
thereon).
(h) No Responsibility for Representations. The Warrant Agent
shall not be responsible for any of the recitals or representations herein or
in the Warrant Certificates (except as to the Warrant Agent's countersignature
thereon), all of which are made solely by the Company.
(i) No Implied Obligations. The Warrant Agent shall be
obligated to perform only such duties as are herein and in the Warrant
Certificates specifically set forth and no implied duties or obligations shall
be read into this Agreement or the Warrant Certificates against the Warrant
Agent. The Warrant Agent shall not be accountable or under
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any duty or responsibility for the use by the Company of any of the Warrant
Certificates authenticated by the Warrant Agent and delivered by it to the
Company pursuant to this Agreement or for the application by the Company of the
proceeds of the Warrant Certificates. The Warrant Agent shall have no duty or
responsibility in case of any default by the Company in the performance of its
covenants or agreements contained herein or in the Warrant Certificates or in
the case of the receipt of any written demand from a holder of a Warrant
Certificate with respect to such default, including, without limiting the
generality of the foregoing, any duty or responsibility to initiate or attempt
to initiate any proceedings at law or otherwise or, except as provided in
Section 6.02 hereof, to make any demand upon the Company.
SECTION 5.03. Resignation and Appointment of Successor.
(a) The Company agrees, for the benefit of the holders from
time to time of the Warrant Certificates, that there shall at all times be a
Warrant Agent hereunder until all the Warrants have been exercised or are no
longer exercisable.
(b) The Warrant Agent may at any time resign as such agent by
giving written notice to the Company of such intention on its part, specifying
the date on which its desired resignation shall become effective; provided that
such date shall be not less than three (3) months after the date on which such
notice is given, unless the Company otherwise agrees. The Warrant Agent
hereunder may be removed at any time by the filing with it of an instrument in
writing signed by or on behalf of the Company and specifying such removal and
the intended date when it shall become effective. Such resignation or removal
shall take effect upon the appointment by the Company, as hereinafter provided,
of a successor Warrant Agent (which shall be a bank or trust company authorized
under the laws of the jurisdiction of its organization to exercise corporate
trust powers) and the acceptance of such appointment by such successor Warrant
Agent. The obligation of the Company under Section 5.02(a) shall continue to
the extent set forth therein notwithstanding the resignation or removal of the
Warrant Agent.
(c) In case at any time the Warrant Agent shall resign, or
shall be removed, or shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or shall commence a voluntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or under any other
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applicable Federal or state bankruptcy, insolvency or similar law or shall
consent to the appointment of or taking possession by a receiver, custodian,
liquidator, assignee, trustee, sequestrator (or other similar official) of the
Warrant Agent or its property or affairs, or shall admit in writing its
inability to pay its debts generally as they become due, or shall take
corporate action in furtherance of any such action, or a decree or order for
relief by a court having jurisdiction in the premises shall have been entered
in respect of the Warrant Agent in an involuntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal or state bankruptcy, insolvency or similar law; or a decree or order by
a court having jurisdiction in the premises shall have been entered for the
appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or similar official) of the Warrant Agent or of its property or
affairs, or any public officer shall take charge or control of the Warrant
Agent or of its property or affairs for the purpose of rehabilitation,
conservation, winding up or liquidation, a successor Warrant Agent, qualified
as aforesaid, shall be appointed by the Company by an instrument in writing,
filed with the successor Warrant Agent. Upon the appointment as aforesaid of a
successor Warrant Agent and acceptance by the successor Warrant Agent of such
appointment, the Warrant Agent shall cease to be Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to the Company an
instrument accepting such appointment hereunder, and thereupon such successor
Warrant Agent, without any further act, deed or conveyance, shall become vested
with all the authority, rights, powers, trusts, duties and obligations of such
predecessor with like effect as if originally named as Warrant Agent hereunder,
and such predecessor, upon payment of its charges and disbursements then
unpaid, shall thereupon become obligated to transfer, deliver and pay over, and
such successor Warrant Agent shall be entitled to receive, all monies,
securities and other property on deposit with or held by such predecessor, as
Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder
may be merged or converted or any corporation with which the Warrant Agent may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation
to which the Warrant Agent shall sell or otherwise transfer all or
substantially all the assets and business of the Warrant Agent, provided that
it shall be
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qualified as aforesaid, shall be the successor Warrant Agent under this
Agreement without the execution or filing of any paper or any further act on
the part of any of the parties hereto.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Amendment. This Agreement may be amended by
the parties hereto, without the consent of the holder of any Warrant
Certificate, for the purpose of curing any ambiguity, or of curing, correcting
or supplementing any defective provision contained herein, or making any other
provisions with respect to matters or questions arising under this Agreement as
the Company and the Warrant Agent may deem necessary or desirable; provided;
however, that such action shall not affect adversely the interests of the
holders of the Warrant Certificates.
SECTION 6.02. Notices and Demands to the Company and Warrant
Agent. If the Warrant Agent shall receive any notice or demand addressed to
the Company by the holder of a Warrant Certificate pursuant to the provisions
of the Warrant Certificates, the Warrant Agent shall promptly forward such
notice or demand to the Company.
SECTION 6.03. Addresses. Any communication from the Company
to the Warrant Agent with respect to this Agreement shall be addressed to
_________________________, Attention: ______________ and any communication from
the Warrant Agent to the Company with respect to this Agreement shall be
addressed to American Health Properties, Inc., 6400 S. Fiddler's Green Circle,
Suite 1800, Englewood, Colorado 80111, Attention: Executive Vice President and
Chief Financial Officer (or such other address as shall be specified in writing
by the Warrant Agent or by the Company).
SECTION 6.04. Applicable Law. The validity, interpretation
and performance of this Agreement and each Warrant Certificate issued hereunder
and of the respective terms and provisions thereof shall be governed by, and
construed in accordance with, the laws of the State of [California] [New York].
SECTION 6.05. Delivery of Prospectus. The Company will
furnish to the Warrant Agent sufficient copies of a prospectus relating to the
Warrant Securities deliverable upon exercise of the Warrants (the
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"Prospectus"), and the Warrant Agent agrees that upon the exercise of any
Warrant, the Warrant Agent will deliver to the holder of the Warrant
Certificate evidencing such Warrant, prior to or concurrently with the delivery
of the Warrant Securities issued upon such exercise, a Prospectus. The Warrant
Agent shall not, by reason of any such delivery, assume any responsibility for
the accuracy or adequacy of such Prospectus.
SECTION 6.06. Obtaining of Governmental Approvals. The
Company will from time to time take all action which may be necessary to obtain
and keep effective any and all permits, consents and approvals of governmental
agencies and authorities and securities acts filings under Federal and state
laws (including without limitation a registration statement in respect of the
Warrants and Warrant Securities under the Securities Act of 1933, as amended),
which may be or become requisite in connection with the issuance, sale,
transfer, and delivery of the Warrant Securities issued upon exercise of the
Warrant Certificates, the exercise of the Warrants, the issuance, sale,
transfer and delivery of the Warrants or upon the expiration of the period
during which the Warrants are exercisable.
SECTION 6.07. Persons Having Rights under Warrant Agreement.
Nothing in this Agreement shall give to any person other than the Company, the
Warrant Agent and the holders of the Warrant Certificates any right, remedy or
claim under or by reason of this Agreement.
SECTION 6.08. Headings. The descriptive headings of the
several Articles and Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 6.09. Counterparts. This Agreement may be executed
in any number of counterparts, each of which as so executed shall be deemed to
be an original, but such counterparts shall together constitute but one and the
same instrument.
SECTION 6.10. Inspection of Agreement. A copy of this
Agreement shall be available at all reasonable times at the principal corporate
trust office of the Warrant Agent for inspection by the holder of any Warrant
Certificate. The Warrant Agent may require such holder to submit his Warrant
Certificate for inspection by it.
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IN WITNESS WHEREOF American Health Properties, Inc. and
______________ have caused this Agreement to be signed by their respective duly
authorized officers, and their respective corporate seals to be affixed
hereunto, and the same to be attested by their respective Secretaries or one of
their respective Assistant Secretaries, all as of the day and year first above
written.
AMERICAN HEALTH PROPERTIES, INC.
By: ____________________________
Title:
Attest:
_________________________
Title:
[Warrant Agent]
By: ____________________________
Title:
Attest:
_________________________
Title:
17
<PAGE> 18
Exhibit A
FORM OF WARRANT CERTIFICATE
[FACE OF WARRANT CERTIFICATE]
[Form of Legend if Offered Prior to ___________ this
Securities with Warrants Warrant Certificate cannot
that are not immediately be transferred or exchanged
detachable. unless attached to a [Title
of Offered Securities].]
[Form of Legend if Warrants Prior to ___________,
are not immediately Warrants evidenced by this
exercisable. Warrant Certificate cannot
be exercised.]
EXERCISABLE ONLY IF COUNTERSIGNED BY THE
WARRANT AGENT AS PROVIDED HEREIN
AMERICAN HEALTH PROPERTIES, INC.
WARRANTS TO PURCHASE
[TITLE OF WARRANT SECURITIES]
VOID AFTER 5 P.M. [NEW YORK CITY TIME] [LOS ANGELES TIME], ON
_____________.
No. __________ __________ Warrants
This certifies that [the bearer is the] [_________________ or
registered assigns is the registered] owner of the above indicated number of
Warrants, each Warrant entitling such owner [If Offered Securities with
Warrants that are not immediately detachable --, subject to [bearer]
[registered] owner] qualifying as a "holder" of this Warrant Certificate, as
hereinafter defined to purchase, at any time [after 5 P.M., [New York City]
[Los Angeles] time, on _________ and] on or before 5 P.M., [New York City] [Los
Angeles] time, on __________ principal amount of [Title of Warrant Securities]
(the "Warrant Securities"), American Health Properties, Inc. (the "Company"),
issued and to be issued under the Indenture (as hereinafter defined), on the
following basis: [during the period from _____________, through and including
___________] the exercise price of each Warrant will be ________ plus [accrued
amortization of the original issue discount] [accrued interest] from
__________; [during the
A-1
<PAGE> 19
period from ____________, through and including ____________, the exercise
price of each Warrant will be _____________ plus [accrued amortization of the
original issued discount[ [accrued interest] from __________;] [in each case,
the original issue discount will be amortized at a __________% annual rate,
computed on an annual basis using the "interest" method and using a 360-day
year consisting of twelve 30-day months] (the "Warrant Price"). [The original
issue discount for each _________ principal amount of Warrant Securities is
_________.] The holder may exercise the Warrants evidenced hereby by providing
certain information set forth on the back hereof, including any applicable
certifications if the Warrant Securities are issuable in bearer form, and by
paying in full [in lawful money of the United States of America] [applicable
currency] [in cash or by certified check or official bank check or by bank wire
transfer, in each case,] [by bank wire transfer] in [immediately available)
[next-day] funds, the Warrant Price for each Warrant exercised to the Warrant
Agent (as hereinafter defined) and by surrendering this Warrant Certificate,
with the purchase form on the back hereof duly executed, at the corporate trust
office of [name of Warrant Agent], or its successor as warrant agent (the
"Warrant Agent") [or ________], which is, on the date hereof, at the address on
the reverse hereof, and upon compliance with and subject to the conditions set
forth herein and in the Warrant Agreement (as hereinafter defined).
The term "holder" as used herein shall mean [if Offered
Securities with Warrants that are not immediately detachable -- , prior to
___________ (the "Detachable Date"), the [bearer] [registered owner] of the
Company's [title of Offered Securities] to which this Warrant Certificate is
initially attached, and after such Detachable Date,] [the bearer of this
Warrant Certificate] [the person in whose name at the time of this Warrant
Certificate shall be registered upon the books to be maintained by the Warrant
Agent for that purpose pursuant to Section 4.01 of the Warrant Agreement].
Any whole number of Warrants evidenced by this Warrant
Certificate may be exercised to purchase Warrant Securities in registered form
in denominations of __________ and any integral multiples thereof. Upon any
exercise of fewer than all of the Warrants evidenced by this Warrant
Certificate, there shall be issued to the holder hereof a new Warrant
Certificate evidencing the number of Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance
with the Warrant Agreement dated as of
A-2
<PAGE> 20
___________ (the "Warrant Agreement") between the Company and the Warrant Agent
and is subject to the terms and provisions contained in the Warrant Agreement,
to all of which terms and provisions the holder of this Warrant Certificate
consents by acceptance hereof. Copies of the Warrant Agreement are on file at
the above-mentioned office of the Warrant Agent [and at ____________].
[If Offered Securities with Warrants that are not immediately
detachable -- Prior to _____________, this Warrant Certificate may be exchanged
or transferred only together with the [Title of Offered Securities] ("Offered
Securities") to which this Warrant Certificate was initially attached, and only
for the purpose of effecting, or in conjunction with, an exchange or transfer
of such Offered Security. After such date, this] [if Offered securities with
Warrants that are immediately detachable -- Transfer of this] Warrant
Certificate may be registered when this Warrant Certificate is surrendered at
the corporate trust office of the Warrant Agent [or ___________] by the
registered owner or his assigns, in person or by an attorney duly authorized in
writing, in the manner and subject to the limitations provided in the Warrant
Agreement.] [effected by delivery and the Company and the Warrant Agent may
treat the bearer hereof as the owner for all purposes.]
[If Offered Securities with Warrants that are not immediately
detachable -- Except as provided in the immediately preceding paragraph, after]
[If Offered Securities with Warrants are immediately detachable or Warrants
alone -- After] countersignature by the Warrant Agent and prior to the
expiration of this Warrant Certificate, this Warrant Certificate may be
exchanged at the corporate trust office of the Warrant Agent [or
_______________] for Warrant Certificates representing the same aggregate
number of Warrants.
This Warrant Certificate shall not entitle the holder hereof
to any of the rights of a holder of the Warrant Securities, including, without
limitation, the right to receive payments of principal of, premium, if any, or
interest, if any, on the Warrant Securities or to enforce any of the covenants
of the Indenture.
A-3
<PAGE> 21
This Warrant Certificate shall not be valid or obligatory for
any purpose until countersigned by the Warrant Agent.
Dated as of __________________
AMERICAN HEALTH PROPERTIES, INC.
By: ____________________________
Authorized Officer
By: ____________________________
Authorized Officer
Attest:
__________________________
Countersigned:
__________________________
As Warrant Agent
By: ______________________
Authorized Signature
A-4
<PAGE> 22
[REVERSE OF WARRANT CERTIFICATE]
INSTRUCTIONS FOR EXERCISE OF WARRANT
In exercise the Warrants evidenced hereby, the holder must pay
in [Dollars] [applicable currency] [in cash or by certified check or official
bank check or by bank wire transfer] [by bank wire transfer] in [immediately
available] [next-day] funds the Warrant Price in full for Warrants exercised to
[insert name of Warrant Agent] [corporate trust department] [insert address of
Warrant Agent], Attn. _________ [or __________], which [payment] [wire
transfer] must specify the name of the holder and the number of Warrants
exercised by such holder. In addition, the holder must complete the
information required below, including any applicable certifications if the
Warrant Securities are issuable in bearer form, and present this Warrant
Certificate in person or by mail (certified or registered mail is recommended)
to the Warrant Agent at the appropriate address set forth below. This Warrant
Certificate, completed and duly executed, must be received by the Warrant Agent
within five (5) business days of the [payment] [wire transfer].
TO BE EXECUTED UPON EXERCISE OF WARRANT
The undersigned hereby irrevocably elects to exercise
__________ Warrants, evidenced by this Warrant Certificate, to purchase
_________ principal amount of the [Title of Warrant Securities] (the "Warrant
Securities") of American Health Properties, Inc. and represents that he has
tendered payment for such Warrant Securities in [Dollars] [applicable currency]
[in cash or by certified check or official bank check or by bank wire transfer,
in each case] [by bank wire transfer] in [immediately available) [next-day]
funds to the order of American Health Properties, Inc., c/o [insert name and
address of Warrant Agent], in the amount of __________ in accordance with the
terms hereof. The undersigned requests that said principal amount of Warrant
Securities be in [bearer] [fully registered] form in the authorized
denominations, registered in such names and delivered all as specified in
accordance with the instructions set forth below. [However, unless otherwise
designated by the Company, Warrant Securities in bearer form shall be delivered
to or upon the order of the holder of such Warrant Certificate only outside the
United States and its possessions.]
If the number of Warrants exercised is less than all of the
Warrants evidenced hereby, the undersigned requests that a new Warrant
Certificate representing the
A-5
<PAGE> 23
remaining Warrants hereby be issued and delivered to the undersigned unless
otherwise specified in the instructions below.
Dated: ___________________ Name ____________________________
__________________________ Address _________________________
(Insert Social Security or
Other Identifying Number of Holder) _________________________
(Signature ______________________
[If registered Warrant -- If registered Warrant --
Signature Guaranteed Signature must conform in all
____________________ respects to name of holder as
specified on the face of this
Warrant Certificate and must bear a
signature guarantee by a bank, trust
company or member broker of the New
York or Pacific Stock Exchange]
The Warrants evidenced hereby may be exercised at the
following addresses:
By hand at _________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
By mail at _________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
[Instructions as to form and delivery of Warrant Securities
and, if applicable, Warrant Certificates evidencing unexercised Warrants --
complete as appropriate.]
A-6
<PAGE> 24
[IF REGISTERED WARRANT]
ASSIGNMENT
[Form of Assignment To Be Executed If Holder
Desires To Transfer Warrants Evidenced Hereby]
FOR VALUE RECEIVED ______________________________ hereby
sells, assigns and transfers unto
__________________________ __________________________________
(Please print name) (Please insert social
security or other
identifying number)
__________________________
(Address)
__________________________
(City, including zip code)
the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint _________ as Attorney to transfer said
Warrant Certificate on the books of the Warrant Agent with full power of
substitution in the premises.
Dated:
___________________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Warrant Certificate and must
bear a signature guarantee by a
bank, trust company or member
broker of the New York or
Pacific Stock Exchange.)
Signature Guaranteed:
_________________________
A-7
<PAGE> 25
CERTIFICATIONS AS TO NON-U.S. OWNERSHIP
[To be completed if Securities
in bearer form are requested]
[Form of certificate to be given by person requesting
delivery of bearer [Warrant] Security upon
exercise of Warrant]
CERTIFICATE
AMERICAN HEALTH PROPERTIES, INC.
[Title of Warrant Securities] Issuable Upon Exercise of Warrants ("Warrant
Securities")
To: American Health Properties, Inc.
[Name of Warrant Agent], or
Warrant Agent
This certificate is submitted in connection with the exercise
of the [Warrant] Certificate relating to the Warrant Securities, by delivery to
you of the election to purchase dated as of ____________.
The undersigned hereby certifies that as of the date hereof,
the [Warrant] Securities which are to be delivered to the undersigned in bearer
form upon the exercise by the undersigned of such Warrant Certificate (i) are
owned by persons that are not United States Persons, as defined below; (ii) are
owned by United States Persons that are (a) foreign branches of United States
financial institutions (as defined in U.S. Treasury Regulations Section
1.165-12(c)(1)(v)) ("financial institutions") purchasing for their own account
or for resale, or (b) United States Persons who acquired the obligations
through foreign branches of United States financial institutions and who hold
the obligations through such financial institutions on the date hereof (and in
either case (a) or (b), each such United States financial institution provides
a certificate in the form that follows this certificate); or (iii) are owned by
United States or foreign financial institutions for purposes of resale during
the restricted period (as defined in U.S. Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), which United States or foreign institutions described
in clause (iii) above (whether or not also described in clause (i) or (ii))
certify that they have not acquired the obligations for purposes of resale
directly or indirectly to a United States Person or to a
A-8
<PAGE> 26
person within the United States or its possessions. The undersigned undertakes
to advise you by tested telex followed by written confirmation if the statement
in the immediately preceding sentence is not correct on the date of delivery of
the above-captioned [Warrant] Securities in bearer form.
We understand that this certificate is required in connection
with United States tax laws. We irrevocably authorize you to produce this
certificate or a copy hereof to any interested party in any administrative or
legal proceedings with respect to the matters covered by this certificate.
"United States Person" shall mean a citizen or resident of the United States of
America (including the District of Columbia), a corporation, partnership or
other entity created or organized in or under the laws of the United States or
any political subdivision thereof or an estate or trust that is subject to
United States Federal income taxation regardless of the source of its income.
Date: _______________________
[Name of Person Entitled to
Receive Warrant Security
Described Herein]
______________________________
(Authorized Signatory)
Name: ________________________
Title:
_______________
Subject to change in accordance with changes in
applicable tax laws and regulations.
A-9
<PAGE> 27
[Form of Certificate of Status as a
Foreign Branch of a United States Financial Institution]
CERTIFICATE
AMERICAN HEALTH PROPERTIES, INC.
[Title of Warrant Securities] Issuable Upon Exercise of Warrants ("Warrant
Securities")
To: American Health Properties, Inc.
[Name of Warrant Agent], or
Warrant Agent
This certificate is submitted in connection with the exercise
of the Warrant Certificate relating to the Warrant Securities, by delivery to
you of the election to purchase dated as of ________________.
The undersigned represents that it is a branch located outside
the United States of a United States securities clearing organization, bank or
other financial institution (as defined in U.S. Treasury Regulations Section
1.165-12(c)(1)(v)) that holds customers' securities in the ordinary course of
its trade or business and agrees that it will comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder and is not purchasing for resale
directly or indirectly to a United States Person or to a person within the
United States or its possessions. We undertake to advise you by tested telex
followed by written confirmation if the statement in the immediately preceding
sentence is not correct on the date of delivery of the above-captioned
Securities in bearer form.
We understand that this certificate is required in connection
with the United States tax laws. We irrevocably authorize you to produce this
certificate or a copy hereof to
A-10
<PAGE> 28
any interested party in any administrative or legal proceedings with respect to
the matters covered by this certificate.
Date: _____________________
[Name of Person Entitled to
Delivery of Warrant Securities
Described Herein]
______________________________
(Authorized Signatory)
Name: ________________________
Title: _______________________
_______________
Subject to change in accordance with changes in applicable tax laws and
regulations.
A-11
<PAGE> 1
EXHIBIT 12.1
AMERICAN HEALTH PROPERTIES, INC.
STATEMENT REGARDING COMPUTATIONS OF RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30,
1995 1994 1993 1992 1991 1990
---------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED EARNINGS
Net Income (loss)............... $ 19,212 $ 9,693 $50,987 $(6,317) $33,753 $28,032
------- ------- ------- ------- ------- -------
Add (Deduct):
Interest Expense............. 13,734 26,101 27,269 29,777 29,040 19,327
Interest Element of
Rentals.................... 34 59 57 57 100 78
------- ------- ------- ------- ------- -------
Consolidated Earnings... $ 32,980 $35,853 $78,313 $23,517 $62,893 $47,437
======= ======= ======= ======= ======= =======
CONSOLIDATED FIXED CHARGES
Interest Expense................ $ 13,734 $26,101 $27,269 $29,777 $29,040 $19,327
Capitalized Interest............ 15 883 577 872 1,007 1,131
Interest Element of Rentals..... 34 59 57 57 100 78
------- ------- ------- ------- ------- -------
Consolidated Fixed
Charges............... $ 13,783 $27,043 $27,903 $30,706 $30,147 $20,536
======= ======= ======= ======= ======= =======
RATIO OF EARNINGS TO FIXED CHARGES 2.39 1.33(a) 2.81 (b) 2.09 2.31
</TABLE>
---------------
(a) Decrease in ratio was primarily due to a $30 million write-down of
Psychiatric Group real estate investments.
(b) Earnings did not cover fixed charges by $7.2 million primarily due to a $45
million write-down of Psychiatric Group real estate investments.
<PAGE> 1
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 reports dated March 6, 1995
included in American Health Properties, Inc.'s Form 10-K for the year ended
December 31, 1994 and Form 8-K, dated August 14, 1995, and to all references to
our Firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Denver, Colorado
August 14, 1995
