<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
----------------------------------
Date of Report (Date of earliest event reported): JANUARY 14, 1998
----------------
BAY APARTMENT COMMUNITIES, INC.
--------------------------------------------------
(Exact name of Registrant as specified in charter)
MARYLAND 1-12672 77-0404318
- ---------------------------- ----------------------- -------------------
(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification no.)
4340 STEVENS CREEK BOULEVARD, SUITE 275, SAN JOSE, CA 95129
-----------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(408) 983-1500
----------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE> 2
ITEM 5. OTHER EVENTS
DEBT OFFERING
On January 20, 1998, Bay Apartment Communities, Inc. (the "Company")
completed an offering of $50,000,000 aggregate principal amount of its 6.250%
Senior Notes due 2003 (the "2003 Notes"), $50,000,000 aggregate principal amount
of its 6.500% Senior Notes due 2005 (the "2005 Notes") and $50,000,000 aggregate
principal amount of its 6.625% Senior Notes due 2008 (the "2008 Notes" and,
together with the 2003 Notes and the 2005 Notes, the "Notes"). The offering of
the Notes was made pursuant to a Prospectus Supplement dated January 14, 1998
relating to the Prospectus dated December 16, 1997, which was originally filed
with the Company's registration statement on Form S-3, as amended (File No.
333-41511).
The 2003 Notes will bear interest at 6.250% per annum and will mature on
January 15, 2003, the 2005 Notes will bear interest at 6.500% per annum and will
mature on January 15, 2005 and the 2008 Notes will bear interest at 6.625% per
annum and will mature on January 15, 2008. The Notes will bear interest from
January 15, 1998 or from the immediately preceding Interest Payment Date (as
defined below) to which interest had been paid, payable semi-annually in arrears
on January 15 and July 15 of each year, commencing July 15, 1998 (each, an
"Interest Payment Date"), to the persons in whose name the applicable Notes are
registered in the security register for each series on the preceding December 31
or June 30 (whether or not a business day), as the case may be. Interest on the
Notes will be computed on the basis of a 360-day year of twelve 30-day months.
The Notes may be redeemed at any time at the option of the Company, in
whole or in part, at a redemption price equal to the sum of (i) the principal
amount of the Notes being redeemed plus accrued interest thereon to the
redemption date, and (ii) the Make-Whole Amount (as defined in the First
Supplemental Indenture referenced below), if any, with respect to such Notes.
The Notes were issued under an Indenture and First Supplemental Indenture,
each between the Company and State Street Bank and Trust Company, as Trustee.
The underwriting discount for the 2003 Notes will be 0.550% and the price to the
public will be 99.969% of the principal amount of the 2003 Notes. The
underwriting discount for the 2005 Notes will be 0.625% and the price to the
public will be 99.749% of the principal amount of the 2005 Notes. The
underwriting discount for the 2008 Notes will be 0.650% and the price to the
public will be 99.710% of the principal amount of the 2008 Notes.
The net proceeds to the Company from the sale of the Notes, after all
anticipated issuance costs, will be approximately $148.7 million. The Company
intends to use the net proceeds to reduce borrowings under its $350 million
unsecured line of credit from Union Bank of Switzerland and other participating
banks (the "Unsecured Credit Facility").
Delivery of the Notes was made on January 20, 1998 through the
facilities of The Depository Trust Company, against payment therefor in
immediately available funds.
<PAGE> 3
PROPERTY ACQUISITION
Warner Oaks. On January 14, 1998, the Company acquired a 227 apartment
home community located in Woodland Hills, California from De Anza Properties
XII. The purchase price for this community, approximately $20.0 million, was
funded by drawing on the Company's Unsecured Credit Facility. The Unsecured
Credit Facility bears interest at the London Interbank Offered Rate (based on a
maturity selected by the Company) plus 0.90% per annum and matures in May 2000.
Neither the Company, any subsidiary of the Company nor any director or officer
of the Company was affiliated with or had a material relationship with the
seller of this community. This community was previously described in the
Company's Current Report on Form 8-K, dated October 31, 1997, under the section
"Proposed Acquisitions," and the financial statements required under Rule 3-14
of Regulation S-X were filed therewith.
<PAGE> 4
ITEM 7. FINANCIAL STATEMENTS
EXHIBIT NUMBER EXHIBIT
1.1 Underwriting Agreement, dated January 14, 1998, between
the Company and PaineWebber Incorporated, Morgan Stanley
& Co. Incorporated and UBS Securities LLC.
4.1 Indenture, dated as of January 16, 1998 between the
Company and State Street Bank and Trust Company, as
Trustee.
4.2 First Supplemental Indenture, dated as of January 20,
1998, between the Company and State Street Bank and
Trust Company, as Trustee.
4.3 Bay Apartment Communities, Inc.'s 6.250% Senior Note
due 2003.
4.4 Bay Apartment Communities, Inc.'s 6.500% Senior Note
due 2005.
4.5 Bay Apartment Communities, Inc.'s 6.625% Senior Note
due 2008.
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be filed on its behalf by
the undersigned hereunto duly authorized.
BAY APARTMENT COMMUNITIES, INC.
Dated: January 20, 1998 By: /s/ Jeffrey B. Van Horn
---------------------------------------
Name: Jeffrey B. Van Horn
Title: Vice President, Chief Financial
Officer, Secretary and Treasurer
<PAGE> 1
EXHIBIT 1.1
$50,000,000 Aggregate Principal Amount of 6.250% Senior Notes due 2003
$50,000,000 Aggregate Principal Amount of 6.500% Senior Notes due 2005
$50,000,000 Aggregate Principal Amount of 6.625% Senior Notes due 2008
BAY APARTMENT COMMUNITIES, INC.
UNDERWRITING AGREEMENT
January 14, 1998
PAINEWEBBER INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
UBS SECURITIES LLC
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
Bay Apartment Communities, Inc., a Maryland corporation (the
"Company"), confirms its agreement with you (collectively, the "Underwriters")
as follows:
1. Description of Securities. The Company proposes to issue and sell to
you the principal amount of its debt securities identified on Schedule A hereto
(the "Securities") to be issued under that certain Indenture, dated as of
January 20, 1998, as supplemented by the First Supplemental Indenture, dated as
of January 20, 1998, each between the Company and State Street Bank and Trust
Company (the "Trustee"), as trustee (as so supplemented, the "Indenture").
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the Underwriters that:
(a) The Company meets the requirements for use of Form S-3 and a
registration statement on Form S-3, as amended (File No. 333-41511), with
respect to the Securities, including a prospectus (the "Base Prospectus"), has
been carefully prepared by the Company in conformity with the requirements of
the Securities Act of 1933, as amended (the "Act"), and the rules and
regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder and filed with the Commission and has
become effective. Such registration statement may have been amended prior to the
date of this Agreement; any such amendment was so prepared and filed, and any
such amendment filed after the effective date of such registration statement has
become effective. No stop order suspending the effectiveness of the registration
statement has been issued, and, to the Company's knowledge, no proceeding for
that purpose has been instituted or threatened by the Commission. A prospectus
supplement and a final prospectus containing information permitted to be omitted
at the time of effectiveness by Rule 430A of the Rules and Regulations has been
or will be so prepared and filed with the Commission pursuant to Rule 424(b) of
the Rules and Regulations on or before the second business day
1
<PAGE> 2
after the date hereof (or such earlier time as may be required by the Rules and
Regulations); and the Rules and Regulations do not require the Company to, and,
without your consent, the Company will not, file a post-effective amendment
after the time of execution of this Agreement and prior to the filing of such
final form of prospectus. The registration statement may be supplemented by one
or more forms of preliminary prospectus supplement, as contemplated by Rule 430
or Rule 430A of the Rules and Regulations, to be used in connection with the
offering and sale of the Securities (each a "Preliminary Prospectus"). Copies of
such registration statement, any such amendments, and each related Preliminary
Prospectus have been delivered to the Underwriters and your counsel. The term
"Registration Statement" means such registration statement as amended at the
time it becomes or became effective (the "Effective Date"), including financial
statements and all exhibits and any information deemed by virtue of Rule 430A of
the Rules and Regulations to be included in such Registration Statement at the
Effective Date and any prospectus supplement filed thereafter with the
Commission and shall include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). The term "Prospectus" means,
collectively, the Base Prospectus together with any prospectus supplement, in
the respective forms they are filed with the Commission pursuant to Rule 424(b)
of the Rules and Regulations. Any reference herein to the terms "amend,"
"amendment" or "supplement" with respect to the Registration Statement, the Base
Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include the filing of any document under the Exchange Act after the
Effective Date, or the date of any Preliminary Prospectus or the Prospectus, as
the case may be, that is incorporated therein by reference.
(b) Each part of the Registration Statement, when such part became
or becomes effective, each Preliminary Prospectus, on the date of filing thereof
with the Commission, and the Prospectus and any amendment or supplement thereto,
on the date of filing thereof with the Commission and at the Closing Date (as
hereinafter defined) conformed or will conform in all material respects with the
requirements of the Act and the Rules and Regulations; the Indenture, on the
date of filing thereof with the Commission and at the Closing Date (as
hereinafter defined) conformed or will conform in all material respects with the
requirements of the Trust Indenture Act of 1939, as amended, and the rules and
regulations of the Commission thereunder (the "TIA"); each part of the
Registration Statement, when such part became or becomes effective, did not or
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; each Preliminary Prospectus, on the date of filing
thereof with the Commission, and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at the Closing
Date, did not or will not include an untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; the foregoing
shall not apply to (i) that part of the Registration Statement which constitutes
the Statement of Eligibility and Qualification under the TIA (the "Form T-1")
and (ii) the statements in or omissions from any such document in reliance upon,
and in conformity with, written information relating to any Underwriter
furnished to the Company by any Underwriter, specifically for use in the
preparation thereof. The Company acknowledges that the only information
furnished to the Company by any Underwriter specifically for inclusion in the
Registration Statement is the information set forth in Exhibit I hereto. The
Company has not distributed any offering material in connection with the
offering or sale of the Securities other than the Registration Statement, any
Preliminary Prospectus, the Prospectus or any other materials, if any, permitted
by the Act.
(c) The financial statements and schedules included in the
Registration Statement and the Prospectus set forth fairly the financial
condition of the respective entity or entities presented as of the dates
indicated and the results of operations and changes in financial position for
the periods therein
2
<PAGE> 3
specified in conformity with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise stated
therein). The pro forma financial statements of the Company included in the
Registration Statement and the Prospectus comply in all material respects with
the applicable requirements of Rule 11-02 of Regulation S-X of the Commission
and the pro form adjustments have been properly applied to the historical
amounts in the compilation of such statements. No other financial statements (or
schedules) of the Company or any predecessor of the Company are required by the
Act or the Rules and Regulations to be included in the Registration Statement or
the Prospectus. Coopers & Lybrand L.L.P. ("Coopers & Lybrand"), who have
reported on the financial statements and schedules which are audited, are
independent accountants with respect to the Company as required by the Act and
the Rules and Regulations.
(d) The Company has been duly organized and is validly existing as a
corporation, is in good standing under the laws of the State of Maryland, has
the power and authority to conduct its business as described in the Registration
Statement and Prospectus, and is duly qualified to do business in each
jurisdiction in which it owns or leases real property or in which the conduct of
its business requires such qualification, except where the failure to be so
qualified, considering all such cases in the aggregate, does not involve and
will not involve a material risk to the business, properties, financial position
or results of operations of the Company and its subsidiaries (as hereinafter
defined) taken as a whole.
(e) The only subsidiaries (as defined in the Rules and Regulations)
of the Company are the subsidiaries listed on Exhibit II attached hereto (the
"subsidiaries"). Each of the Company's subsidiaries existing as of the date
hereof is a corporation or partnership, as the case may be, duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation or organization. Each of the Company's
subsidiaries existing as of the date hereof has the power and authority to
conduct its business as described in the Registration Statement and Prospectus
and is, or will be upon the Closing Date, duly qualified to do business in each
jurisdiction in which it owns or leases, or will own or lease, real property or
in which the conduct of its business requires such qualification except where
the failure to be so qualified, considering all such cases in the aggregate,
does not involve and will not involve a material risk to the business,
properties, financial position or results of operations of the Company or any
subsidiary taken as a whole. Except for the interests in the subsidiaries and as
disclosed in the Registration Statement, the Company does not own, directly or
indirectly, any shares of stock or any other equity or long-term debt securities
of any corporation or have any equity interest in any firm, partnership, joint
venture, trust, association or other entity. Complete and correct copies of the
articles or certificate of incorporation, partnership agreements, and of the
by-laws of each of the Company's subsidiaries and all amendments thereto have
been delivered to the Underwriters, and no changes therein will be made
subsequent to the date hereof and prior to the Closing Date, except as
heretofore disclosed in writing to the Underwriters. Except as otherwise
described in the Registration Statement or the Prospectus, or as described in
Exhibit II, all of the issued and outstanding capital stock of each corporate
subsidiary of the Company has been duly authorized and will be, as of the
Closing Date, validly issued, fully paid and non-assessable, and owned by the
Company, in each case free and clear of any security interest, mortgage, pledge,
lien, charge, encumbrance, claim, restriction or equity interest (each of the
foregoing, a "Lien").
(f) The outstanding securities of the Company, including the Common
Stock, $0.01 par value (the "Common Stock"), the outstanding shares of Series A
Preferred Stock (the "Series A Preferred Stock"), Series B Preferred Stock (the
"Series B Preferred Stock"), 8.50% Series C Cumulative Redeemable Preferred
Stock (the "Series C Preferred Stock") and 8.00% Series D Cumulative Redeemable
Preferred Stock (the "Series D Preferred Stock") have been duly authorized and
are validly issued, fully
3
<PAGE> 4
paid and nonassessable by the Company and conform to the description thereof in
the Prospectus. There are no requirements, restrictions or limitations in the
terms of the Series A Preferred Stock, the Series B Preferred Stock, the Series
C Preferred Stock or the Series D Preferred Stock applicable to the issuance and
sale of the Securities. The shareholders of the Company have no preemptive or
similar rights with respect to the Securities. Except as set forth in the
Registration Statement or the Prospectus, the Company does not have outstanding
any option to purchase, or any rights or warrants to subscribe for, or any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, any securities, any shares of capital stock of any subsidiary or
any such warrants, convertible securities or obligations, except for stock
options and shares of restricted stock granted, and shares of unrestricted stock
to be issued to certain employees in connection with the deferment of income,
pursuant to the Company's 1994 Stock Incentive Plan, as amended and restated,
stock issuable under the 1996 Non-Qualified Employee Stock Purchase Plan and
stock issuable under the Company's Dividend Reinvestment and Stock Purchase
Plan.
(g) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, the Company and its subsidiaries have not incurred any
liabilities or obligations, direct or contingent, or entered into any
transactions, not in the ordinary course of business, that are material to the
Company and its subsidiaries, taken as a whole, and there has not been any
material change in the capital stock, partnership interests, short-term debt or
long-term debt of the Company or any of its subsidiaries, or any material
adverse change, or any development involving a prospective material adverse
change, in the condition (financial or other), business prospects, net worth or
results of operations of the Company and its subsidiaries taken as a whole.
(h) Except as set forth in the Prospectus, there is not pending or,
to the knowledge of the Company, threatened any action, suit or proceeding
against or affecting the Company or any of its subsidiaries or any of their
respective directors, partners or officers in their capacity as such, or any of
the Communities (as defined in the Prospectus) before or by any Federal or state
court, commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, wherein an unfavorable ruling, decision or finding
might result in any material adverse change in the condition (financial or
other), business prospects, net worth or results of operations of the Company
and its subsidiaries taken as a whole, or materially and adversely affect the
properties or assets of the Company and its subsidiaries taken as a whole.
(i) There are no contracts or documents of a character required to
be described in the Prospectus or to be filed as exhibits to the Registration
Statement by the Act or the Rules and Regulations that have not been so
described or filed (the "Contracts"). All Contracts executed and delivered on or
before the date hereof to which the Company or any subsidiary of the Company is
a party have been duly authorized, executed and delivered by the Company or such
subsidiary, constitute valid and binding agreements of the Company or such
subsidiary and are enforceable against the Company or such subsidiary in
accordance with the terms thereof, except as limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
or, in the case of each such Contract which is to be executed and delivered on
the Closing Date, will on the Closing Date, be duly authorized, executed and
delivered by the Company or such subsidiary, constitute valid and binding
agreements of the Company or such subsidiary and be enforceable against the
Company or such subsidiary in accordance with the terms thereof, except as
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally.
4
<PAGE> 5
(j) The Securities will be, as of the Closing Date, duly authorized
by the Company for issuance and sale pursuant to this Underwriting Agreement and
the Indenture, and when duly authenticated and delivered by the Trustee in
accordance with the terms of the Indenture (assuming the due authorization,
execution and delivery of the Indenture by the Trustee), and delivered to, and
paid for in full by, the Underwriters pursuant to this Underwriting Agreement,
will be valid and legally binding obligations of the Company entitled to the
benefit of the Indenture and will be enforceable against the Company in
accordance with their terms, subject to (a) applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, (b) general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or law), (c) the discretion of
the court before which any proceeding therefor may be brought, and (d)
applicable Federal and state securities laws and public policy which may limit
the application of provisions relating to indemnification and contribution with
respect to securities law matters (clauses (a), (b), (c) and (d) are
collectively referred to as the "Enforceability Limitations"); the Indenture has
been duly qualified under the TIA and prior to the issuance of the Securities
will be duly authorized, executed and delivered by the Company, and assuming due
authorization, execution and delivery thereof by the Trustee, will constitute a
valid and legally binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to the Enforceability Limitations;
the Securities and the Indenture will conform in all material respects to the
statements relating thereto contained in the Prospectus; and the Securities are,
in all material respects, in the form contemplated by the Indenture.
(k) The Company has the corporate power and authority to enter into
this Agreement and the Indenture. This Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and binding
agreement of the Company and is enforceable against the Company in accordance
with the terms hereof, except as limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally. Except as disclosed in the Prospectus, the execution, delivery and
the performance of this Agreement and the Indenture and the consummation of the
transactions herein and therein contemplated will not result in the creation or
imposition of any lien, charge or encumbrance upon the Communities (as defined
in the Prospectus) or any of the other assets of the Company or any of its
subsidiaries pursuant to the terms or provisions of, or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or give any other party a right to terminate any of its obligations under, or
result in the acceleration of any obligation under, the articles of
incorporation of the Company or by-laws of the Company, the articles or
certificate of incorporation or by-laws or partnership agreements of any of the
Company's subsidiaries, or any Contract, or violate or conflict with any
judgment, ruling, decree, order, statute, rule or regulation of any court or
other governmental agency or body applicable to the Communities or business or
properties of the Company or any of its subsidiaries. No consent, approval,
authorization or order of, or filing with, any court or governmental agency or
body is required for the consummation of the transactions contemplated by this
Agreement or in connection with the issuance or sale of the Securities by the
Company, except such as may be required under the Act, the Exchange Act or state
securities laws, or the by-laws and rules of the National Association of
Securities Dealers, Inc. (the "NASD") in connection with the purchase and
distribution by the Underwriters of the Securities to be sold by the Company.
The Company has the power and authority to authorize, issue, offer and sell the
Securities, as contemplated by this Agreement.
(l) Each of the Company and its subsidiaries has complied in all
material respects with all laws, regulations and orders applicable to it or
their respective businesses and properties where the failure to comply would,
individually or in the aggregate, have a material adverse effect on the Company
and its subsidiaries taken as a whole; neither the Company nor any of its
subsidiaries is, and upon consummation of the offering of the Securities, none
of them will be, in default under any Contract, the
5
<PAGE> 6
violation of which would individually or in the aggregate have a material
adverse effect on the Company and its subsidiaries taken as a whole, and no
other party under any such Contract to which the Company or any of its
subsidiaries is a party is, to the knowledge of the Company, in default in any
material respect thereunder; the Company is not in violation of its articles of
incorporation or by-laws; except as disclosed in the Prospectus, the Company and
each of its subsidiaries have or, upon the Closing Date, will have all
governmental licenses (including, without limitation, a California real estate
brokerage license and a California general contractor's license, if applicable),
permits, consents, orders, approvals and other authorizations required to carry
on its business as contemplated in the Prospectus, and none of them has received
any notice of proceedings relating to the revocation or modification of any such
governmental license, permit, consent, order, approval or other authorization
which, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially and adversely affect the
condition, financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise.
(m) The Company, or its subsidiaries, as applicable, has good and
marketable title to the Communities, and the Communities are not subject to any
liens or encumbrances except for monetary liens as set forth in the Prospectus,
non-delinquent property taxes, utility easements and other immaterial
non-monetary liens or encumbrances of record. All liens, charges, encumbrances,
claims or restrictions on or affecting the Communities which are required to be
disclosed in the Prospectus are disclosed therein.
(n) The mortgages and deeds of trust encumbering the Communities are
not convertible nor will the Company or any of its subsidiaries hold a
participating interest therein and such mortgages and deeds of trust are not
cross-defaulted or cross-collateralized to any property not to be owned directly
or indirectly by the Company. To the knowledge of the Company (i) the present
and intended use and occupancy of each of the Communities complies with all
applicable codes and zoning laws and regulations, if any, except for such
failures to comply which would not individually or in the aggregate have a
material adverse effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the Company and its
subsidiaries taken as a whole; and (ii) there is no pending or, to the Company's
knowledge, threatened condemnation, zoning change, environmental or other
proceeding or action that will in any material respect affect the size of, use
of, improvements on, construction on, or access to the Communities, except for
such proceedings or actions that would not individually or in the aggregate have
a material adverse effect on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the Company and its
subsidiaries taken as a whole.
(o) The Company and its subsidiaries maintain property and casualty
insurance (other than earthquake insurance) in favor of the Company and its
subsidiaries with respect to each of the Communities, in an amount and on such
terms as is reasonable for businesses of the type proposed to be conducted by
the Company and its subsidiaries. The Company maintains earthquake insurance on
the Communities as set forth in the Prospectus. The Company or its subsidiaries
has not received from any insurance company notice of any material defects or
deficiencies affecting the insurability of any of the Communities (other than
with respect to seismic activities).
(p) As of the Closing Date the Company, and each of its subsidiaries
(i) will be in compliance in all material respects with any and all applicable
foreign, Federal, state and local laws and regulations relating to the
protection of human health and safety, the Hazardous Materials (as defined
below), or hazardous or toxic wastes, pollutants or contaminants (the
"Environmental Laws"); (ii) will have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses; and (iii) will be in compliance with all terms and
conditions of any
6
<PAGE> 7
such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals are otherwise disclosed in the Prospectus or would not,
individually or in the aggregate, have a material adverse effect on the Company
and its subsidiaries taken as a whole.
(q)(i) None of the Company or any partnership that owns a Community
(each a "Partnership") has at any time, and, to the best knowledge of the
Company after due inquiry and investigation, no other party has, at any
time, handled, buried, stored, retained, refined, transported, processed,
manufactured, generated, produced, spilled, allowed to seep, leak, escape
or leach, or be pumped, poured, emitted, emptied, discharged, released,
injected, dumped, transferred or otherwise disposed of or dealt with,
Hazardous Materials (as hereinafter defined) on, to, above under, in, into
or from the Communities, except as disclosed in the environmental reports
previously delivered to the Underwriters or referred to in the Prospectus,
or such as would not individually or in the aggregate have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
Neither the Company nor its subsidiaries intends to use the Communities or
any subsequently acquired properties described in the Prospectus for the
purpose of handling, burying, storing, retaining, refining, transporting,
processing, manufacturing, generating, producing, spilling, seeping,
leaking, escaping, leaching, pumping, pouring, emitting, emptying,
discharging, releasing, injecting, dumping, transferring or otherwise
disposing of or dealing with Hazardous Materials, except for the use,
storage and transportation of small quantities of substances that are
regularly used as office supplies, household cleaning supplies, gardening
supplies, or pool maintenance supplies in compliance with applicable
Environmental Laws and in accordance with prudent business practices and
good hazardous materials storage and handling practices.
(ii) None of the Company or the Partnerships, to the best
knowledge of the Company after due inquiry and investigation, knows of any
seepage, leak, escape, leach, discharge, injection, release, emission,
spill, pumping, pouring, emptying or dumping of Hazardous Materials into
waters on, under or adjacent to the Communities or onto lands from which
such hazardous or toxic waste or substances might seep, flow or drain into
such waters, except as disclosed in the environmental reports previously
delivered to the Underwriters or referred to in the Prospectus or such as
would not individually or in the aggregate have a material adverse effect
on the Company and its subsidiaries, taken as a whole.
(iii) None of the Company or the Partnerships to the best
knowledge of the Company after due inquiry and investigation, has received
notice of, or has knowledge of any occurrence or circumstance which, with
notice or passage of time or both, would give rise to, any claim under or
pursuant to any Environmental Law pertaining to Hazardous Materials,
hazardous or toxic waste or substances on or originating from the
Communities arising out of the conduct of any such party, including,
without limitation, pursuant to any Environmental Law, except as disclosed
in the environmental reports previously delivered to the Underwriters or
referred to in the Prospectus or such as would not individually or in the
aggregate have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
As used herein, "Hazardous Material" shall include, without
limitation, any flammable materials or explosives, petroleum or petroleum-based
products, radioactive materials, hazardous materials, hazardous wastes,
hazardous or toxic substances, or related materials, asbestos or any material as
defined by any Federal, state or local environmental law, ordinance, rule, or
regulation including, without
7
<PAGE> 8
limitation, Environmental Laws, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et
seq.) ("CERCLA"), the Hazardous Materials Transportation Act, as amended (49
U.S.C. Section 1801, et seq.), the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Section 9601, et seq.), and in the regulations adopted and
publications promulgated pursuant to each of the foregoing or by any Federal,
state or local governmental authority having or claiming jurisdiction over the
Communities as described in the Prospectus.
(r) In the ordinary course of its business, each of the Company and
the Partnerships conducts a periodic review of the effect of Environmental Laws
on its business, operations and properties in the course of which it identifies
and evaluates associated costs and liabilities (including, without limitation,
any capital or operating expenditures required for investigation, clean-up,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such review and on the
basis of the reviews conducted by the Company in connection with the
Communities, the Company has reasonably concluded that such associated costs and
liabilities would not individually or in the aggregate, have a material adverse
effect on the Company and its subsidiaries taken as a whole.
(s) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
(t) Neither the assets of the Company nor its subsidiaries
constitute, nor will such assets, as of the Closing Date, constitute, "plan
assets" under the Employee Retirement Income Security Act of 1974, as amended
("ERISA").
(u) The Company has elected to be taxed as a REIT under the Code and
will use its best efforts to continue to be organized and will continue to
operate in a manner so as to qualify as a "real estate investment trust"
("REIT") under Sections 856 through 860 of the Internal Revenue Code of 1986, as
amended (the "Code"), unless the Board of Directors determines that it is no
longer in the best interest of the Company to continue to be so qualified.
(v) Except as stated in the Prospectus, neither the Company nor any
of its directors, officers or controlling persons has taken, nor will it take,
directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of the
Securities to facilitate the sale or resale of the Securities.
(w) The Company has not distributed and, prior to the later to occur
of (i) the Closing Date and (ii) completion of the distribution of the
Securities, will not distribute any offering material in connection with the
offering and sale of the Securities other than the Registration Statement, the
Prospectus or other materials, if any, permitted by the Act.
(x) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that: (i) transactions are executed
in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to financial and corporate
books and records is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
8
<PAGE> 9
(y) Neither the Company nor any of its subsidiaries is involved in
any material labor dispute nor, to the best knowledge of the Company after due
inquiry and investigation, is any such dispute threatened.
(z) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement, except as set forth in that certain Registration Rights
Agreement dated March 16, 1994 among the Company and certain stockholders.
3. Purchase, Sale and Delivery of Securities.
(a) On the basis of the representations, warranties and agreements
contained herein, but subject to the terms and conditions set forth herein, the
Company agrees to issue and sell the Securities to the Underwriters as
hereinafter provided, and the Underwriters agree to purchase from the Company
the Securities at the purchase price set forth on Schedule A hereto plus accrued
interest, if any, from the date specified on Schedule A hereto to the date of
payment and delivery.
(b) The Company understands that the Underwriters intend (i) to make
a public offering of the Securities, and (ii) initially to offer the Securities
upon the terms set forth in the Prospectus.
(c) Payment for the Securities shall be made to the Company or to
its order in immediately available funds in the amount, on the date and at the
place set forth on Schedule A hereto (or at such other time and place on the
same date or such other date, not later than the third Business Day thereafter,
as the Underwriters and the Company may agree in writing). Such payment will be
made against delivery to the Underwriters of the Securities registered in such
names and in such denominations as the Underwriters shall request no less than
two full Business Days prior to the date of delivery, with transfer taxes, if
any, payable in connection with transfer to the Underwriters duly paid by the
Company. As used herein, the term "Business Day" means any day other than a day
on which banks are permitted or required to be closed in New York City. The time
and date of such payment and delivery with respect to the Securities are
referred to herein as the "Closing Date." The Securities will be delivered
through the book entry facilities of The Depository Trust Company ("DTC") and
will be made available for inspection by the Underwriters by 1:00 P.M. New York
City time on the Business Day prior to the Closing Date at such place in New
York City as the Underwriter, DTC and the Company shall agree.
4. Covenants. The Company covenants and agrees with each Underwriter that:
(a) The Company will cause the Prospectus to be filed as required by
Section 2(a) hereof (but only if the Underwriters have not reasonably objected
thereto by notice to the Company after having been furnished a copy a reasonable
time prior to filing) and will notify the Underwriters promptly of such filing;
it will notify the Underwriters promptly of the time when any subsequent
amendment to the Registration Statement has become effective or any supplement
to the Prospectus has been filed and of any request by the Commission for any
amendment or supplement to the Registration Statement or Prospectus or for
additional information; it will prepare and file with the Commission, promptly
upon your request, any amendments or supplements to the Registration Statement
or Prospectus that, in your opinion, may be necessary or advisable in connection
with the distribution of the Securities by the Underwriters; and it will file no
amendment or supplement to the Registration Statement or Prospectus to which you
shall reasonably object by notice to the Company after having been furnished a
copy at a reasonable time prior to the filing.
9
<PAGE> 10
(b) The Company will advise you, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement, of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceeding for any
purpose; and it will promptly use its best efforts to prevent the issuance of
any stop order or to obtain its withdrawal if such a stop order should be
issued.
(c) Within the time during which a prospectus relating to the
Securities is required to be delivered under the Act, the Company will comply
with all requirements imposed upon it by the Act and by the Rules and
Regulations, as from time to time in force, so far as necessary to permit the
continuance of sales of or dealings in the Securities as contemplated by the
provisions hereof and the Prospectus. If during such period any event occurs as
a result of which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances then
existing, not misleading, or if during such period it is necessary to amend or
supplement the Registration Statement or Prospectus to comply with the Act, the
Company will promptly notify you and will amend or supplement the Registration
Statement or Prospectus (at the expense of the Company) so as to correct such
statement or omission or effect such compliance.
(d) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the opinion of
counsel for the Underwriters a prospectus is required by the Act to be delivered
in connection with sales by any Underwriter or dealer, the Company will
expeditiously deliver to each Underwriter and counsel for the Underwriters and
each dealer, without charge, as many copies of the Prospectus (and of any
amendment or supplement thereto) as you or they may reasonably request. The
Company consents to the use of the Prospectus (and of any amendment or
supplement thereto) in accordance with the provisions of the Act, both in
connection with the offering and sale of the Securities and for such period of
time thereafter as the Prospectus is required by the Act to be delivered in
connection with sales by any Underwriter or dealer. If during such period of
time any event shall occur that in the judgment of the Company or in the opinion
of counsel for the Underwriters is required to be set forth in the Prospectus
(as then amended or supplemented) or should be set forth therein in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary to supplement or amend the
Prospectus to comply with the Act or any other law, the Company will forthwith
prepare and, subject to the provisions of Section 4(a) hereof, file with the
Commission an appropriate supplement or amendment thereto, and will
expeditiously furnish to the Underwriters and dealers a reasonable number of
copies thereof. In the event that the Company and you agree that the Prospectus
should be amended or supplemented, the Company, if requested by you, will
promptly issue a press release announcing or disclosing the matters to be
covered by the proposed amendment or supplement.
(e) The Company will make generally available to its security
holders as soon as practicable, but not later than ninety (90) days after the
close of the period covered thereby, an earnings statement (in form complying
with the provisions of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations) covering a twelve-month period beginning not later than the first
day of the Company's fiscal quarter next following the "effective date" (as
defined in said Rule 158) of the Registration Statement and will advise you in
writing when such statement has been so made available.
(f) The Company agrees to pay the following costs and expenses and
all other costs and expenses incident to the performance by the Company of the
Company's obligations hereunder
10
<PAGE> 11
including, without limitation, its own travel (including air fare) and lodging
expenses related to the preparation of the Prospectus and any sales efforts: (i)
the preparation, printing or reproduction, and filing with the Commission of the
Registration Statement (including financial statements and exhibits thereto),
the Prospectus, and each amendment or supplement to either of them; (ii) the
printing or (reproduction) and delivery (including postage, air freight charges
and charges for counting and packaging) of such copies of the Registration
Statement, the Prospectus, any Preliminary Prospectus, and all amendments or
supplements to any of them as may be reasonably requested for use in connection
with the offering and sale of the Securities; (iii) the preparation, printing,
authentication, issuance and delivery of notes for the Securities, including any
stamp taxes in connection with the original issuance and sale of the Securities;
(iv) the printing (or reproduction) and delivery of this Agreement, and all
other agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Securities; (v) the filing fees and the fees
and expenses of counsel for the Underwriters in connection with any filings
required to be made with the NASD; (vi) the fees and expenses of the Company's
accountants and the fees and expenses of counsel (including local and special
counsel) for the Company; (vii) the Trustee under the Indenture, and (viii)
Moody's Investors Service, Inc. ("Moody's") and Standard and Poor's Rating
Services ("S&P" and, together with Moody's, the "Rating Agencies") in connection
with the rating of the Securities at the request of the Company.
(g) The Company will apply the net proceeds from the offering and
sale of the Securities in the manner set forth in the Prospectus under "Use of
Proceeds" and shall file such reports with the Commission with respect to the
sale of the Securities and the application of the proceeds therefrom as may be
required in accordance with Rule 463 under the Act.
(h) Unless the Board of Directors of the Company determines in its
reasonable business judgment that continued qualification as a "real estate
investment trust" under the Code is not in the Company's best interest the
Company will use its best efforts to, and will continue to meet the requirements
to, qualify as a "real estate investment trust."
(i) The Company will not at any time, directly or indirectly, take
any action designed, or which might reasonably be expected to cause or result
in, or which will constitute, stabilization of the price of the Securities to
facilitate the sale or resale of any of the Securities.
(j) The Company will comply with all provisions of any undertakings
contained in the Registration Statement.
5. Conditions of Underwriters' Obligations. The obligations of the several
Underwriters to purchase and pay for the Securities as provided herein shall be
subject to the accuracy, as of the date hereof and the Closing Date (as if made
at the Closing Date), of the representations and warranties of the Company
herein, to the performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) Notification that the Registration Statement has become
effective shall be received by the Underwriters not later than 5:00 pm., New
York City time, on the date of this Agreement or at such later date and time as
shall be consented to in writing by the Underwriters and all filings required by
Rule 424 and Rule 430A of the Rules and Regulations shall have been made; no
stop order suspending the effectiveness of the Registration Statement shall have
been issued and, to the knowledge of the Company or any Underwriter, no
proceeding for that purpose shall have been instituted or threatened by the
11
<PAGE> 12
Commission; and any request of the Commission for additional information (to be
included in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to your satisfaction.
(b) Subsequent to the execution and delivery of this Underwriting
Agreement and prior to the Closing Date, there shall not have occurred any
downgrading in the rating accorded the Securities or any other debt securities
of the Company by any Rating Agency nor shall any notice have been given to the
Company of (i) any intended or potential downgrading by any Rating Agency in
such securities, or (ii) any review or possible change by any Rating Agency that
does not indicate a stable, positive or improving rating accorded such
securities.
(c) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, (i) there shall not have been any change in the capital
stock, partnership interests, short-term debt or long-term debt of the Company
or its subsidiaries, (ii) there shall not have been any adverse change, or any
development involving a prospective adverse change, in the condition (financial
or other), business, prospects, net worth or results of operations of the
Company and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, and (iii) neither the Company
nor any of its subsidiaries shall have sustained any material loss or
interference with its business or properties from fire, explosion, flood or
other casualty, whether or not covered by insurance, or from any labor dispute
or any court or legislative or other governmental action, order or decree, which
is not set forth in the Registration Statement and the Prospectus, if in the
sole judgment of the Underwriters any of the foregoing makes it impractical or
inadvisable to offer or deliver the Securities on the terms and in the manner
contemplated in the Prospectus.
(d) The Underwriters shall have received the opinion of Goodwin,
Procter & Hoar LLP, counsel for the Company dated the Closing Date, to the
effect that:
(i) The Registration Statement has been declared effective
under the Act; the Prospectus has been filed with the Commission pursuant
to Rule 424; and to the best knowledge of such counsel (which may be based
solely on an oral representation of a member of the staff of the
Commission) no stop order suspending the effectiveness of the Registration
Statement has been issued under the Act and no proceeding for that purpose
has been instituted or threatened by the Commission;
(ii) Each part of the Registration Statement, when such part
became effective, and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at the
Closing Date, complied as to form in all material respects with the
requirements of the Act and the Rules and Regulations (other than (A) the
financial statements and supporting schedules and other financial and
statistical information and data included therein or omitted therefrom,
and (B) any documents incorporated therein by reference, as to which such
counsel need express no opinion), it being understood that in passing upon
compliance as to the form of the Registration Statement, such counsel may
assume that the statements made therein are correct and complete;
(iii) The descriptions in the Registration Statement (other
than the documents incorporated therein by reference) and Prospectus of
statutes are accurate in all material respects and fairly present the
information required to be shown; and such counsel do not know of any
statutes or legal or governmental proceedings required to be described in
the Prospectus that are
12
<PAGE> 13
not described as required, or of any contracts or documents of a character
required to be described in the Registration Statement or Prospectus or to
be filed as exhibits to the Registration Statement that are not described
and filed as required;
(iv) The form of organization of the Company and its
operations are such as to enable the Company to qualify as a "real estate
investment trust" under the applicable provisions of the Code. The
statements in the Prospectus set forth under the caption "Certain Federal
Income Tax Considerations," to the extent such information constitutes
matters of law, summaries of legal matters, or legal conclusions, have
been reviewed by such counsel and are accurate in all material respects;
(v) The Company is not (after giving effect to the sale of the
Securities) required to be registered under the 1940 Act;
(vi) The Company is in good standing under the laws of the
State of California as a foreign corporation, has full power and authority
to conduct its business as described in the Registration Statement and
Prospectus;
(vii) Each of the partnerships that owns a Community (the
"Partnerships") is a limited partnership duly organized, validly existing
and in good standing under the laws of its state of incorporation and has
the power under its partnership agreement and the applicable Limited
Partnership Act necessary to conduct its business as described in the
Registration Statement and Prospectus; each of the corporate subsidiaries
of the Company is duly organized, validly existing and in good standing
under the laws of its state of incorporation and has the corporate power
and authority to conduct its business as described in the Registration
Statement and Prospectus;
(viii) The General Partners of each of the Partnerships are
duly qualified to do business in the State of California, except where the
failure to be so qualified, considering all such cases in the aggregate,
does not involve and will not involve a material risk to the business,
properties, financial position or results of operations of such
subsidiary;
(ix) All of the outstanding shares of Common Stock and the
Preferred Stock of the Company identified in the Prospectus have been duly
authorized and are validly issued, fully paid and nonassessable and
conform to the description thereof in the Prospectus; and the shareholders
of the Company have no preemptive or similar rights with respect to the
Securities pursuant to the Company's Charter or applicable statute or
pursuant to any contract identified on an exhibit to such opinion (which
exhibit lists all contracts identified by the Company in an officer's
certificate as material under the standard set forth in Item 601(b)(10) of
Regulation S-K);
(x) (A) The Securities have been duly authorized and executed
by the Company and, when duly authenticated in accordance with the terms
of the Indenture and delivered to and paid for in full by the Underwriters
in accordance with the terms of the Underwriting Agreement, will
constitute valid and binding obligations of the Company entitled to the
benefits provided by the Indenture and enforceable against the Company in
accordance with their terms;
(B) The Company has full corporate power and authority
to enter into the Indenture; the Indenture has been duly authorized,
executed and delivered by the Company and
13
<PAGE> 14
constitutes a valid and binding agreement of the Company enforceable
against the Company in accordance with its terms;
(C) the Indenture has been duly qualified under the TIA;
(D) the Indenture and the Securities conform in all
material respects to the descriptions thereof in the Registration
Statement and the Prospectus.
(xi) The Company has full corporate power and authority to
enter into this Agreement; this Agreement has been duly authorized,
executed and delivered by the Company; to the knowledge of such counsel,
the execution, delivery and performance of the Indenture and the issuance
and sale of the Securities to the Underwriters on the terms contemplated
herein will not (A) result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of the Company, any of its
subsidiaries or the Partnerships, pursuant to the terms or provisions of
any contract (i) which such counsel has prepared or negotiated on behalf
of the Company and (ii) to which any of its subsidiaries or the
Partnerships is a party or by or pursuant to which any of them or their
respective properties is bound, affected or financed, or (B) result in a
breach or violation of any of the terms or provisions of, or constitute a
default or result in the acceleration of any obligation under, (i) the
articles of incorporation or by-laws of the Company, (ii) the articles or
certificate of incorporation or by-laws of any of the Company's
subsidiaries, or the partnership agreements or other organizational
documents of the Partnerships, (iii) any contract identified on the
schedule to such opinion referenced above to which the Company, any of its
subsidiaries or the Partnerships is a party or by or pursuant to which any
of them or their respective properties is bound, affected or financed or
(iv) any statute, judgment, ruling, decree, order, rule or regulation of
any court or other governmental agency or body applicable to the business
or properties of the Company, any of its subsidiaries or the Partnerships
(except that such counsel need express no opinion as to the securities or
Blue Sky laws of any jurisdiction other than the United States), where
such violation or default, individually or in the aggregate, might have a
material adverse effect on the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company
or any of its subsidiaries taken as a whole;
(xii) To the knowledge of such counsel, no consent, approval,
authorization or order of, or filing with, any court or governmental
agency or body is required in connection with the issuance or sale of the
Securities by the Company, except (i) such as have been obtained under the
Act, the Exchange Act or the TIA, or (ii) such as may be required under
state securities laws or the by-laws of the NASD in connection with the
purchase and distribution of the Securities by the Underwriters; and
(xiii) To the knowledge of such counsel, none of the Company,
any of its subsidiaries or the Partnerships is in violation of its
articles or certificate of incorporation, by-laws, partnership agreements,
or other organizational documents, as applicable, or in default (nor has
an event occurred which with notice or lapse of time or both would
constitute a default or acceleration) in the performance of any
obligation, agreement or condition contained in any Contract known to such
counsel to which the Company, any of its subsidiaries or the Partnerships
is a party will be a party, or by or pursuant to which any of them or
their respective properties is bound, affected or financed will be bound,
affected or financed, and, to the knowledge of such counsel, none of the
Company, any of its subsidiaries or the Partnerships is in violation of
any judgment, ruling, decree, order, franchise, license or permit known to
such counsel or any statute,
14
<PAGE> 15
rule or regulation of any court or other governmental agency or body
applicable to the business or properties of the Company, any of its
subsidiaries or the Partnerships; where such violation or default,
individually or in the aggregate, might have a material adverse effect on
the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the Company or any of its
subsidiaries taken as a whole.
In connection with delivering such opinion such counsel shall also state:
(a) No facts have come to their attention which cause them to believe
that the Registration Statement (excluding the financial statements
and notes thereto, financial schedules and other financial or
statistical information and data included therein or omitted
therefrom and the Trustee's Statement of Eligibility and
Qualification on Form T-1 (the "T-1"), as to which they need express
no opinion), at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and
(b) No facts have come to their attention which cause them to believe
that the Prospectus (excluding the financial statements and notes
thereto, financial schedules and other financial or statistical
information and data included therein or omitted therefrom and the
T-1, as to which they need express no opinion), as of its date or
the date of such opinion, contained or contains an untrue statement
of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
In rendering such opinions, such counsel may rely on certificates of
public officers, upon opinions of counsel reasonably satisfactory to the
Underwriters, copies of which shall be contemporaneously delivered to the
Underwriters, and as to matters of fact, upon certificates of officers of the
Company; provided that such counsel shall state that the opinion of any other
counsel is in form satisfactory to such counsel and, such counsel is unaware of
any reason why it and the Underwriters are not justified in relying on such
opinions of other counsel. Copies of all such opinions and certificates shall be
furnished to counsel to the Underwriters on the Closing Date.
(e) The Underwriters shall have received the opinion of Cox, Castle
& Nicholson LLP, counsel for the Company, dated the Closing Date, to the effect
that to the best of their knowledge statements relating to the Communities and
the Current Development Communities (as defined in the Prospectus) and
tax-exempt bond financing in the Prospectus (but excluding the statistical and
financial data, physical condition and construction status of such communities
included therein) are materially fair and accurate.
(f) The Underwriters shall have received from O'Melveny & Myers LLP,
counsel for the Underwriters (based upon Goodwin Procter & Hoar LLP's opinion
respecting Maryland law), such opinion or opinions, dated the Closing Date, with
respect to the organization of the Company, the validity of the Securities, the
Registration Statement, the Prospectus and other related matters as you
reasonably may request, and such counsel shall have received such papers and
information as they request to enable them to pass upon such matters. In
rendering such opinion, such counsel may rely upon certificates of public
officers and upon opinions of counsel, copies of which shall be
contemporaneously delivered to the Underwriters, and as to matters of fact, upon
certificates of officers of the Company.
15
<PAGE> 16
(g) At the time of the execution of this Agreement, the Underwriters
shall have received from Coopers & Lybrand a letter dated such date, in form and
substance satisfactory to the Underwriters containing statements and information
of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and other financial
information included in the Registration Statement and the Prospectus (the
"initial comfort letter"). On the Closing Date, you shall have received from
Coopers & Lybrand a letter dated as of the Closing Date to the effect that they
reaffirm the statements made in the initial comfort letter, except that the
specified date referred to shall be a date not more than five days prior to the
Closing Date.
(h) The Underwriters shall have received from the Company a
certificate, signed by the Chairman of the Board or the President and by the
principal financial or accounting officer of the Company, dated the Closing
Date, to the effect that:
(i) The representations and warranties of the Company in this
Agreement were when originally made and are at the time such certificate
is delivered true and correct, as if made at and as of the Closing Date,
and the Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued, and, to their knowledge, no
proceeding for that purpose has been instituted or is threatened, by the
Commission;
(iii) Since the effective date of the Registration Statement,
there has occurred no event required to be set forth in an amendment or
supplement to the Registration Statement or Prospectus that has not been
so set forth; and
(iv) Since the execution and delivery of the Underwriting
Agreement and prior to the Closing Date, there has not occurred any
downgrading in the rating accorded the Securities or any other debt
securities of the Company by any Rating Agency nor has any notice been
given to the Company of (A) any intended or potential downgrading by any
Rating Agency in such securities, or (B) any review or possible change by
any Rating Agency that does not indicate a stable, positive or improving
rating accorded such securities.
(i) The Company shall have filed with the Commission a Current
Report on Form 8-K disclosing all material acquisition activity occurring since
the Company's last public offering of securities which is required to be
disclosed on Form 8-K as of the date of the Prospectus Supplement and is not
otherwise disclosed in reports filed by the Company under the Exchange Act.
(j) The Company shall have furnished to you such further
certificates and documents as you shall have reasonably requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you. The Company will furnish you with such conformed copies of
such opinions, certificates, letters and other documents as you shall reasonably
request.
6. Indemnification and Contribution.
16
<PAGE> 17
(a) The Company will indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person, if any, who controls each Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act from and against any and
all losses, claims, liabilities, expenses and damages (including, but not
limited to, any and all investigative, legal and other expenses reasonably
incurred in connection with, and any and all amounts paid in settlement of, any
action, suit or proceeding between any of the indemnified parties and any
indemnifying parties or between any indemnified party and any third party, or
otherwise, or any claim asserted), as and when incurred, to which any
Underwriter, or any such person may become subject under the Act, the Exchange
Act or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or damages
arise out of or are based on (i) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus, or in any application or other
document executed by the Company and filed in any jurisdiction in order to
qualify the Securities under the securities laws thereof or filed with the
Commission, (ii) the omission or alleged omission to state in such document a
material fact required to be stated in it or necessary to make the statements in
it not misleading or (iii) any act or failure to act or any alleged act or
failure to act by any Underwriter in connection with, or relating in any manner
to, the Securities or the offering contemplated hereby, and which is included as
part of or referred to in any loss, claim, liability, expense or damage arising
out of or based upon matters covered by clause (i) or (ii) above (provided that
the Company shall not be liable under this clause (iii) to the extent it is
finally judicially determined by a court of competent jurisdiction that such
loss, claim, liability, expense or damage resulted directly from any such acts
or failures to act undertaken or omitted to be taken by such Underwriter through
its gross negligence or willful misconduct); provided that the Company will not
be liable to the extent that such loss, claim, liability, expense or damage (A)
arises from the sale of the Securities in the public offering to any person by
an Underwriter and is based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
relating to any Underwriter furnished to the Company by any Underwriter
expressly for inclusion in the Registration Statement, any preliminary
prospectus or the Prospectus or (B) results solely from an untrue statement of a
material fact contained in, or the omission of a material fact from, such
preliminary prospectus or Prospectus, which untrue statement or omission was
completely corrected in the Prospectus (as then amended or supplemented) if the
Company shall sustain the burden of proving that the Underwriters sold
Securities to the person alleging such loss, claim, liability, expense or damage
without sending or giving, at or prior to the written confirmation of such sale,
a copy of the Prospectus (as then amended or supplemented) if the Company had
previously furnished copies thereof to the Underwriters within a reasonable
amount of time prior to such sale or such confirmation, and the Underwriters
failed to deliver the corrected Prospectus, if required by law to have so
delivered it and if delivered would have been a complete defense against the
person asserting such loss, claim, liability, expense or damage. This indemnity
agreement will be in addition to any liability that the Company might otherwise
have.
(b) Each Underwriter will indemnify and hold harmless the Company,
each person, if any, who controls the Company within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, each director of the Company and
each officer of the Company who signs the Registration Statement to the same
extent as the foregoing indemnity from the Company to each Underwriter, but only
insofar as losses, claims, liabilities, expenses or damages arise out of or are
based on any untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to any
Underwriter furnished to the Company by any Underwriter expressly for use in the
Registration Statement, the Preliminary Prospectus or the Prospectus. This
indemnity will be in addition to any liability that each Underwriter might
otherwise have; provided, however, that in no case shall any
17
<PAGE> 18
Underwriter be liable or responsible for any amount in excess of the
underwriting discounts and commissions received by such Underwriter.
(c) Any party that proposes to assert the right to be indemnified
under this Section 6 will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 6, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party will not
relieve it from any liability that it may have to any indemnified party under
the foregoing provisions of this Section 6 unless, and only to the extent that,
such omission results in the forfeiture of substantive rights or defenses by the
indemnifying party. If any such action is brought against any indemnified party
and it notifies the indemnifying party of its commencement, the indemnifying
party will be entitled to participate in and, to the extent that it elects by
delivering written notice to the indemnified party promptly after receiving
notice of the commencement of the action from the indemnified party, jointly
with any other indemnifying party similarly notified, to assume the defense of
the action, with counsel satisfactory to the indemnified party, and after notice
from the indemnifying party to the indemnified party of its election to assume
the defense, the indemnifying party will not be liable to the indemnified party
for any legal or other expenses except as provided below and except for the
reasonable costs of investigation subsequently incurred by the indemnified party
in connection with the defense. The indemnified party will have the right to
employ its own counsel in any such action, but the fees, expenses and other
charges of such counsel will be at the expense of such indemnified party unless
(1) the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party) or (4) the indemnifying party has not in
fact employed counsel to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be reimbursed by
the indemnifying party promptly as they are incurred. An indemnifying party will
not be liable for any settlement of any action or claim effected without its
written consent (which consent will not be unreasonably withheld). No
indemnifying party shall, without the prior written consent of each indemnified
party, settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding relating to the matters
contemplated by this Section 6 (whether or not any indemnified party is a party
thereto), unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising or
that may arise out of such claim, action or proceeding.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Underwriters, the
Company and the Underwriters will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted, but after
deducting any
18
<PAGE> 19
contribution received by the Company from persons other than the Underwriters,
such as persons who control the Company within the meaning of the Act, officers
of the Company who signed the Registration Statement and directors of the
Company, who also may be liable for contribution) to which the Company and any
one or more of the Underwriters may be subject in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one hand,
and the Underwriters, on the other, with respect to the statements or omissions
which resulted in such loss, claim, liability, expense or damage, or action in
respect thereof, as well as any other relevant equitable considerations with
respect to such offering. Such relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by
the Company or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contributions pursuant to this Section 6(d) were to be
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim,
liability, expense or damage, or action in respect thereof, referred to above in
this Section 6(d) shall be deemed to include, for purpose of this Section 6(d),
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action ore claim.
Notwithstanding the provisions of this Section 6(d), no Underwriter shall be
required to contribute any amount in excess of the underwriting discounts and
commissions received by it and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 6(d) are several in proportion to their respective underwriting
obligations and not joint. For purposes of this Section 6(d), any person who
controls a party to this Agreement within the meaning of the Act will have the
same rights to contribution as that party, and each officer of the Company who
signed the Registration Statement will have the same rights to contribution as
the Company, subject in each case to the provisions hereof. Any party entitled
to contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 6(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 6(d). No party will be liable for
contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Company contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any investigation made by or on behalf of the Underwriters, (ii) acceptance
of the Securities and payment therefor or (iii) any termination of this
Agreement.
7. Representations and Agreements to Survive Delivery. All
representations, warranties, agreements and covenants, of the Company herein or
in certificates delivered pursuant hereto, and the
19
<PAGE> 20
agreements of the several Underwriters contained in Section 6 hereof, shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any Underwriter or any controlling persons, or the
Company or any of its officers, directors or any controlling persons, and shall
survive delivery of and payment for the Securities hereunder.
8. Substitution of Underwriters. If any one or more of the Underwriters
shall fail or refuse to purchase any of the Securities which it or they have
agreed to purchase hereunder, and the aggregate principal amount of Securities
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate principal amount of the
Securities, the other Underwriters shall be obligated, severally, to purchase
the Securities which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase, in the proportions which the aggregate principal
amount of Securities which they have respectively agreed to purchase pursuant to
Section 3 bears to the aggregate principal amount of Securities which all such
non-defaulting Underwriters have so agreed to purchase, or in such other
proportions as the non-defaulting Underwriters may specify; provided that in no
event shall the maximum aggregate principal amount of Securities which any
Underwriter has become obligated to purchase pursuant to Section 3 be increased
pursuant to this Section 8 by more than one-ninth of the aggregate principal
amount of Securities agreed to be purchased by such Underwriter without the
prior written consent of such Underwriter. If any Underwriter or Underwriters
shall fail or refuse to purchase any Securities and the aggregate principal
amount of Securities which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase exceeds one-tenth of the aggregate principal
amount of the Securities and arrangements satisfactory to the Underwriters and
the Company for the purchase of such Securities are not made within 48 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter or the Company for the purchase or sale of any
Securities under this Agreement. In any such case either the non-defaulting
Underwriters or the Company shall have the right to postpone the Closing Date,
but in no event for longer than seven days, in order that the required changes,
if any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. Any action taken pursuant to this
Section 8 shall not relieve any defaulting Underwriter from liability in respect
of any default of such Underwriter under this Agreement.
9. Termination. The Underwriters shall have the right, by giving notice as
hereinafter specified at any time at or prior to the Closing Date, to terminate
this Agreement if (i) the Company shall have failed, refused or been unable, at
or prior to the Closing Date, to perform any agreement on its part to be
performed hereunder, (ii) any other condition of the Underwriters' obligations
hereunder is not fulfilled, (iii) trading on the New York Stock Exchange shall
have been wholly suspended, (iv) minimum or maximum prices for trading shall
have been fixed, or maximum ranges for prices for securities shall have been
required, on the New York Stock Exchange by such exchange or by order of the
Commission or any other governmental authority having jurisdiction, (v) a
banking moratorium shall have been declared by Federal or New York authorities,
or (vi) any material adverse change in the financial or securities markets in
the United States or in political, financial or economic conditions in the
United States, any outbreak or material escalation of hostilities in which the
United States is involved, a declaration of war by Congress, any other
substantial national or international calamity or any other event or occurrence
of a similar character shall have occurred since the execution of this Agreement
that, in your judgment, makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Securities. Any such termination
shall be without liability of any party to any other party with respect to
Securities not purchased by reason of such termination except that the
provisions of Section 4(f) (costs and expenses) and Section 6 (indemnification
and contribution) hereof shall at all times be effective. If you elect to
20
<PAGE> 21
terminate this Agreement as provided in this Section, the Company shall be
notified promptly by you by telephone, telex or telecopy, confirmed by letter.
10. Notices. All notices or communications hereunder shall be in writing
and if to the Underwriters shall be mailed, delivered, telexed or telecopied and
confirmed to the Underwriters at the offices of PaineWebber Incorporated, 1285
Avenue of the Americas, New York, New York 10019, Attention: Corporate Finance
Department, or if sent to the Company, shall be mailed, delivered, telexed or
telecopied and confirmed to the Company at 4340 Stevens Creek Boulevard, Suite
275, San Jose, California 95129, Attention: President. Notice to any Underwriter
pursuant to Section 6 hereof shall be mailed, delivered, telexed or telecopied
and confirmed to such Underwriter's address as it appears in such Underwriter's
questionnaire or other notice furnished to the Company in writing for the
purpose of communications hereunder. Any party to this Agreement may change such
address for notices by sending to the parties to this Agreement written notice
of a new address for such purpose.
11. Parties. This Agreement shall inure to the benefit of and be binding
upon the Company and the Underwriters and their respective successors and the
persons or entities referred to in Section 6 hereof, and no other person will
have any right or obligation hereunder.
Any action required or permitted to be taken by the Underwriters
under this Agreement may be taken by them jointly or by PaineWebber
Incorporated.
12. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICT OF LAWS PRINCIPLES OF SUCH STATE.
13. Counterparts. This Agreement may be signed in two or more counterparts
with the same effect as if the signatures thereto and hereto were upon the same
instrument.
14. Severability. In case any provision in this Agreement 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.
15. Waivers of Trial by Jury. The Company and the Underwriters each hereby
irrevocably waive any right they may have to a trial by jury in respect of any
claim based upon or arising out of this Agreement or the transactions
contemplated hereby.
[signature page follows]
21
<PAGE> 22
If the foregoing correctly sets forth the understanding between the
Company and the several Underwriters, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding
agreement between the Company and the several Underwriters.
Very truly yours,
BAY APARTMENT COMMUNITIES, INC.
By: /s/ Gilbert M. Meyer
` --------------------
Gilbert M. Meyer
President
ACCEPTED as of the date
first above written
PAINEWEBBER INCORPORATED
MORGAN STANLEY & CO. INCORPORATED
UBS SECURITIES LLC
By: PAINEWEBBER INCORPORATED
Acting on behalf of itself and
the other several Underwriters
named in Schedule A hereof
By: /s/ Frederick T. Caven, Jr.
---------------------------
Frederick T. Caven, Jr.
Managing Director
S - 1
<PAGE> 23
SCHEDULE A
Underwriters; Identification of Securities; Purchase Price
<TABLE>
<CAPTION>
Aggregate Principal Aggregate Aggregate Principal
Amount of 2003 Principal Amount Amount of 2008
Notes to be of 2005 Notes to Notes to be
Purchased be Purchased Purchased
--------------------------------------------------------------
<S> <C> <C> <C>
PaineWebber Incorporated.... 30,000,000 30,000,000 30,000,000
Morgan Stanley & Co.
Incorporated.......... 10,000,000 10,000,000 10,000,000
UBS Securities LLC.......... 10,000,000 10,000,000 10,000,000
--------------------------------------------------------------
Total................. 50,000,000 50,000,000 50,000,000
==============================================================
</TABLE>
Title of Securities: 6.250% Senior Notes due 2003 (the "2003 Notes")
6.500% Senior Notes due 2005 (the "2005 Notes")
6.625% Senior Notes due 2008 (the "2008 Notes")
Aggregate principal
amount: $50,000,000 each of the 2003 Notes, the 2005 Notes
and the 2008 notes
Maturity Date: 2003 Notes: January 15, 2003
2005 Notes: January 15, 2005
2008 Notes: January 15, 2008
Interest Rate: 2003 Notes: 6.250% per annum from January 15, 1998
2005 Notes: 6.500% per annum from January 15, 1998
2008 Notes: 6.625% per annum from January 15, 1998
Coupon Payment Dates: January 15 and July 15
Price to Public: 2003 Notes: 99.969% plus accrued interest from
January 15, 1998
2005 Notes: 99.749% plus accrued interest from
January 15, 1998
2008 Notes: 99.710% plus accrued interest from
January 15, 1998
Schedule A - 1
<PAGE> 24
Underwriting Discount: 2003 Notes: 0.550%
2005 Notes: 0.625%
2008 Notes: 0.650%
Net Price to Company: 2003 Notes: 99.419% plus accrued interest from
January 15, 1998
2005 Notes: 99.124% plus accrued interest from
January 15, 1998
2008 Notes: 99.060% plus accrued interest from
January 15, 1998
Accrued Interest from
January 15: 2003 Notes: $43,402.78
2005 Notes: $45,138.89
2008 Notes: $46,006.94
Purchase Price to be paid
to the Company: 2003 Notes: $49,752,902.78
2005 Notes: $49,607,138.89
2008 Notes: $49,576,006.94
total: $148,936,048.61
Closing Date and Time: January 20, 1998, 10:00 a.m. (New York City time)
Closing Location: Offices of Goodwin, Procter & Hoar LLP
Exchange Place, Boston MA 02109
Schedule A - 2
<PAGE> 25
EXHIBIT I
INFORMATION IN PRELIMINARY PROSPECTUS
AND PROSPECTUS FURNISHED BY
THE UNDERWRITERS
The following information appearing in the Preliminary Prospectus,
if any, and the Prospectus has been furnished by the Underwriters in writing
specifically for use in the preparation of such Preliminary Prospectus and the
Prospectus.
1. The following information contained in the Prospectus Supplement
under the heading "Underwriting:"
a. the allocation of Securities between the Underwriters in
table following the first paragraph;
b. the amounts of the selling concession and reallowance
set forth in the second paragraph;
c. the information in the second sentence of the third
paragraph; and
d. the information in the second sentence of the eighth
paragraph.
I-1
<PAGE> 26
EXHIBIT II
LIST OF SUBSIDIARIES
Bay Apartment Communities, Inc. (the "Company") owns interests in
the following entities:
Subsidiaries
1. Bay Asset Group, Inc., a Maryland corporation, is a wholly-owned
subsidiary of the Company.
2. Bay GP, Inc., a Maryland corporation, is a wholly-owned subsidiary of the
Company.
3. Bay Development Partners, Inc., a Maryland corporation, is a wholly-owned
subsidiary of Bay Asset Group, Inc.
4. Bay Waterford, Inc., a Maryland corporation, is a wholly-owned subsidiary
of Bay Asset Group, Inc.
Partnerships
1. Bay GP, Inc. is the sole general partner of Bay Countrybrook, L.P., a
Delaware limited partnership. There are third-party limited partners.
2. Bay Development Partners, Inc. is the sole general partner of San
Francisco Bay Partners II, Ltd., a California limited partnership. There
is one third-party limited partner.
3. Bay Development Partners, Inc. is the sole general partner of San
Francisco Bay Partners III, L.P., a California limited partnership. The
Company is the sole limited partner.
4. Bay Development Partners, Inc. is the sole general partner of Toyon Road
San Jose Partners, L.P., a California limited partnership. The Company is
the sole limited partner.
5. Bay Development Partners, Inc. is the sole general partner of Foxchase
Drive San Jose Partners II, L.P., a California limited partnership. The
Company is the sole limited partner.
6. The Company is the sole general partner of Bay Rincon, L.P., a California
limited partnership. There are third-party limited partners.
7. The Company is the sole general partner of Bay Pacific Northwest, L.P., a
Delaware limited partnership. There are third-party limited partners.
LIENS
The Financial Guaranty Insurance Company has a lien on all of the
issued and outstanding capital stock of Bay Waterford, Inc. and Bay Development
Partners, Inc.
II-1
<PAGE> 1
EXHIBIT 4.1
- --------------------------------------------------------------------------------
BAY APARTMENT COMMUNITIES, INC.
TO
STATE STREET BANK AND TRUST COMPANY
Trustee
Indenture
Dated as of January 16, 1998
Senior Debt Securities
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
Page
RECITALS OF THE COMPANY...................................................... 1
ARTICLE ONE - DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION............................................................ 1
SECTION 101. Definitions.............................................. 1
SECTION 102. Compliance Certificates and Opinions..................... 11
SECTION 103. Form of Documents Delivered to Trustee................... 12
SECTION 104. Acts of Holders.......................................... 12
SECTION 105. Notices, etc., to Trustee and Company.................... 14
SECTION 106. Notice to Holders: Waiver................................ 15
SECTION 107. Counterparts; Effect of Headings and Table of Contents... 16
SECTION 108. Successors and Assigns................................... 16
SECTION 109. Severability Clause...................................... 16
SECTION 110. Benefits of Indenture.................................... 16
SECTION 111. Governing Law............................................ 16
SECTION 112. Legal Holidays........................................... 16
SECTION 113. Immunity of Stockholders, Directors, Officers and
Agents of the Company.................................... 17
SECTION 114. Conflict with Trust Indenture Act........................ 17
ARTICLE TWO - SECURITIES FORMS............................................... 17
SECTION 201. Forms of Securities...................................... 17
SECTION 202. Form of Trustee's Certificate of Authentication.......... 18
SECTION 203. Securities Issuable in Global Form....................... 18
ARTICLE THREE - THE SECURITIES............................................... 19
SECTION 301. Amount Unlimited; Issuable in Series..................... 19
SECTION 302. Denominations............................................ 23
SECTION 303. Execution, Authentication, Delivery and Dating........... 23
SECTION 304. Temporary Securities..................................... 26
SECTION 305. Registration, Registration of Transfer and Exchange...... 28
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities......... 32
SECTION 307. Payment of Interest; Interest Rights Preserved........... 33
SECTION 308. Persons Deemed Owners.................................... 35
SECTION 309. Cancellation............................................. 36
SECTION 310. Computation of Interest.................................. 36
ARTICLE FOUR - SATISFACTION AND DISCHARGE.................................... 36
SECTION 401. Satisfaction and Discharge of Indenture.................. 36
SECTION 402. Application of Trust Funds............................... 38
(i)
<PAGE> 3
Page
ARTICLE FIVE - REMEDIES...................................................... 38
SECTION 501. Events of Default........................................ 38
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 or Coupons.................................... 43
SECTION 506. Application of Money Collected........................... 43
SECTION 507. Limitation on Suits...................................... 44
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium or Make-Whole Amount, if any, and Interest....... 44
SECTION 509. Restoration of Rights and Remedies....................... 45
SECTION 510. Rights and Remedies Cumulative........................... 45
SECTION 511. Delay or Omission Not Waiver............................. 45
SECTION 512. Control by Holders of Securities......................... 45
SECTION 513. Waiver of Past Defaults.................................. 46
SECTION 514. Waiver of Usury, Stay or Extension Laws.................. 46
SECTION 515. Undertaking for Costs.................................... 46
ARTICLE SIX - THE TRUSTEE.................................................... 47
SECTION 601. Notice of Defaults....................................... 47
SECTION 602. Certain Rights of Trustee................................ 47
SECTION 603. Not Responsible for Recitals or Issuance of Securities... 49
SECTION 604. May Hold Securities...................................... 49
SECTION 605. Money Held in Trust...................................... 49
SECTION 606. Compensation and Reimbursement........................... 50
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
Interests................................................ 50
SECTION 608. Resignation and Removal; Appointment of Successor........ 51
SECTION 609. Acceptance of Appointment by Successor................... 52
SECTION 610. Merger, Conversion, Consolidation or Succession to
Business................................................. 53
SECTION 611. Appointment of Authenticating Agent...................... 54
SECTION 612. Certain Duties and Responsibilities of the Trustee....... 55
ARTICLE SEVEN - HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY............ 57
SECTION 701. Disclosure of Names and Addresses of Holders............. 57
SECTION 702. Reports by Trustee....................................... 57
SECTION 703. Reports by Company....................................... 57
SECTION 704. Company to Furnish Trustee Names and Addresses of
Holders.................................................. 58
(ii)
<PAGE> 4
Page
ARTICLE EIGHT - CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE............. 58
SECTION 801. Consolidations and Mergers of Company and Sales, Leases
and Conveyances Permitted Subject to Certain Conditions.. 58
SECTION 802. Rights and Duties of Successor Corporation............... 59
SECTION 803. Officers' Certificate and Opinion of Counsel............. 59
ARTICLE NINE - SUPPLEMENTAL INDENTURES....................................... 59
SECTION 901. Supplemental Indentures Without Consent of Holders....... 59
SECTION 902. Supplemental Indentures with Consent of Holders.......... 61
SECTION 903. Execution of Supplemental Indentures..................... 62
SECTION 904. Effect of Supplemental Indentures........................ 62
SECTION 905. Conformity with Trust Indenture Act...................... 62
SECTION 906. Reference in Securities to Supplemental Indentures....... 63
ARTICLE TEN - COVENANTS...................................................... 63
SECTION 1001. Payment of Principal, Premium or Make-Whole Amount, if
any; and Interest....................................... 63
SECTION 1002. Maintenance of Office or Agency......................... 63
SECTION 1003. Money for Securities Payments to Be Held in Trust....... 65
SECTION 1004. Existence............................................... 66
SECTION 1005. Maintenance of Properties............................... 66
SECTION 1006. Insurance............................................... 67
SECTION 1007. Payment of Taxes and Other Claims....................... 67
SECTION 1008. Statement as to Compliance.............................. 67
SECTION 1009. Waiver of Certain Covenants............................. 67
ARTICLE ELEVEN - REDEMPTION OF SECURITIES.................................... 67
SECTION 1101. Applicability of Article................................ 67
SECTION 1102. Election to Redeem; Notice to Trustee................... 68
SECTION 1103. Selection by Trustee of Securities to Be Redeemed....... 68
SECTION 1104. Notice of Redemption.................................... 68
SECTION 1105. Deposit of Redemption Price............................. 70
SECTION 1106. Securities Payable on Redemption Date................... 70
SECTION 1107. Securities Redeemed in Part............................. 71
ARTICLE TWELVE - SINKING FUNDS............................................... 71
SECTION 1201. Applicability of Article................................ 71
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities... 72
SECTION 1203. Redemption of Securities for Sinking Fund............... 72
ARTICLE THIRTEEN - REPAYMENT AT THE OPTION OF HOLDERS........................ 72
(iii)
<PAGE> 5
Page
SECTION 1301. Applicability of Article................................ 72
SECTION 1302. Repayment of Securities................................. 73
SECTION 1303. Exercise of Option...................................... 73
SECTION 1304. When Securities Presented for Repayment Become Due and
Payable................................................. 74
SECTION 1305. Securities Repaid in Part............................... 75
ARTICLE FOURTEEN - DEFEASANCE AND COVENANT DEFEASANCE........................ 75
SECTION 1401. Applicability of Article: Company's Option to Effect
Defeasance or Covenant Defeasance....................... 75
SECTION 1402. Defeasance and Discharge................................ 75
SECTION 1403. Covenant Defeasance..................................... 76
SECTION 1404. Conditions to Defeasance or Covenant Defeasance......... 76
SECTION 1405. Deposited Money and Government Obligations to Be Held
in Trust; Other Miscellaneous Provisions................ 78
ARTICLE FIFTEEN - MEETINGS OF HOLDERS OF SECURITIES.......................... 79
SECTION 1501. Purposes for Which Meetings May Be Called............... 79
SECTION 1502. Call, Notice and Place of Meetings...................... 79
SECTION 1503. Persons Entitled to Vote at Meetings.................... 80
SECTION 1504. Quorum; Action.......................................... 80
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment
of Meetings............................................. 81
SECTION 1506. Counting Votes and Recording Action of Meetings......... 82
SIGNATURES AND SEALS......................................................... 83
ACKNOWLEDGMENT............................................................... 84
EXHIBIT A
FORM OF REDEEMABLE OR NON-REDEEMABLE SENIOR SECURITY.................. A-1
EXHIBIT B
FORMS OF CERTIFICATION................................................ B-1
(iv)
<PAGE> 6
BAY APARTMENT COMMUNITIES, INC.
Reconciliation and tie between Trust Indenture Act of 1939 (the "Trust
Indenture Act" or "TIA") and Indenture, dated as of January 16, 1998.
Trust Indenture
Act Section Indenture Section
----------- -----------------
Section 310(a)(1)....................................... 607
(a)(2)....................................... 607
(b)....................................... 607, 608
Section 312(c)....................................... 701
Section 313(a)....................................... 702
(c)....................................... 702
Section 314(a)....................................... 703
(a)(4)....................................... 1008
(c)(1)....................................... 102
(c)(2)....................................... 102
(e)....................................... 102
Section 315(b)....................................... 601
Section 316(a)(last sentence)........................ 101("Outstanding")
(a)(1)(A)....................................... 502, 512
(a)(1)(B)....................................... 513
(b)....................................... 508
Section 317(a)(1)....................................... 503
(a)(2)....................................... 504
Section 318(a)....................................... 111
(c)....................................... 111
- ---------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
Attention should also be directed to TIA Section 318(c), which provides
that the provisions of TIA Sections 310 to and including 317 of the Trust
Indenture Act are a part of and govern every qualified indenture, whether or not
physically contained therein.
(v)
<PAGE> 7
INDENTURE, dated as of January 16, 1998, between BAY APARTMENT
COMMUNITIES, INC., a corporation organized under the laws of the State of
Maryland (hereinafter called the "Company"), having its principal office at 4340
Stevens Creek Boulevard, Suite 275, San Jose, California 95129, and STATE STREET
BANK AND TRUST COMPANY, a trust company organized under the laws of The
Commonwealth of Massachusetts, as Trustee hereunder (hereinafter called the
"Trustee"), having a Corporate Trust Office at Two International Place, Boston,
Massachusetts 02110.
RECITALS OF THE COMPANY
The Company deems it necessary to issue from time to time for its lawful
purposes senior debt securities (hereinafter called the "Securities") evidencing
its unsecured and senior indebtedness, and has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time to time of the
Securities, to be issued in one or more Series as provided in this Indenture.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act" or "TIA"), that are deemed to be
incorporated into this Indenture and shall, to the extent applicable, be
governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE - DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION
SECTION 101. Definitions. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the TIA, either
directly or by reference therein, have the meanings assigned to them
therein, and the terms "cash transactions" and "self-liquidating paper,"
as used in TIA Section 311, shall have the meanings assigned to them in
the rules of the Commission adopted under the TIA;
<PAGE> 8
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP; and
(4) the words "herein," "hereof "and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"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 611 hereof to act on behalf of the Trustee to authenticate
Securities.
"Authorized Newspaper" means a newspaper, printed in the English language
or in an official language of the country of publication, customarily published
on each Business Day, whether or not published on Saturdays, Sundays or
holidays, and of general circulation in each place in connection with which the
term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any Business Day.
"Bankruptcy Law" has the meaning specified in Section 501.
"Bearer Security" means any Security established pursuant to Section 201
which is payable to bearer.
"Board of Directors" means the board of directors of the Company or any
committee of that board duly authorized to act hereunder.
"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 or any
other particular location referred to in this Indenture or in the Securities,
means, unless otherwise specified with respect to any Securities issued pursuant
to Section 301, any day, other than a
2
<PAGE> 9
Saturday or Sunday, that is not a day on which banking institutions in that
Place of Payment or particular location are authorized or required by law,
regulation or executive order to close.
"Capital Stock" means, with respect to any Person, any capital stock
(including preferred stock), shares, interests, participations or other
ownership interests (however designated) of such Person and any rights (other
than debt securities convertible into or exchangeable for corporate stock),
warrants or options to purchase any thereof.
"CEDEL" means Centrale de Livraison de Valeurs Mobilieres, S.A., or its
successor.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after 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 on such date.
"Common Stock" means, with respect to any Person, all shares of capital
stock issued by such Person other than Preferred Stock.
"Company" means the Person named as the "Company" in the first paragraph
of this Indenture until a successor corporation shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by its Chairman of the Board,
the President or a Vice President, and by its Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary, of the Company, and delivered to the
Trustee.
"Consolidated Net Assets" means as of any particular time the aggregate
amount of assets (less applicable reserves and other properly deductible items)
after deducting therefrom all current liabilities except for (a) notes and loans
payable, (b) current maturities of long-term debt and (c) current maturities of
obligations under capital leases, all as set forth on the most recent
consolidated balance sheet of the Company and its consolidated Subsidiaries and
computed in accordance with generally accepted accounting principles and
practices as in effect on January 16, 1998.
"Conversion Event" means the cessation of use of (i) a Foreign Currency
both by the government of the country which issued such currency and for the
settlement of transactions by a central bank or other public institutions of or
within the international banking community, (ii) the ECU both within the
European Monetary System and for the settlement of transactions by public
institutions of or within the European Communities or (iii) any currency unit
(or composite currency) other than the ECU for the purposes for which it was
established.
3
<PAGE> 10
"Corporate Trust Office" means the office of the Trustee at which, at any
particular time, its corporate trust business shall be principally administered,
which office at the date hereof is located at Two International Place, Boston,
Massachusetts 02110, Attention:
Corporate Trust Department.
"corporation" includes corporations, associations, companies and business
trusts.
"coupon" means any interest coupon appertaining to a Bearer Security.
"Custodian" has the meaning specified in Section 501.
"Defaulted Interest" has the meaning specified in Section 307.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"ECU" means the European Currency Unit as defined and revised from time to
time by the Council of the European Communities.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, or its successor, as operator of the Euroclear System.
"European Communities" means the European Economic Community, the European
Coal and Steel Community and the European Atomic Energy Community.
"European Monetary System" means the European Monetary System established
by the Resolution of December 5, 1978 of the Council of the European
Communities.
"Event of Default" has the meaning specified in Article Five.
"Foreign Currency" means any currency, currency unit or composite
currency, including, without limitation, the ECU issued by the government of one
or more countries other than the United States of America or by any recognized
confederation or association of such governments.
"GAAP" means, except as otherwise provided herein, generally accepted
accounting principles, as in effect from time to time, as used in the United
States applied on a consistent basis.
"Global Security" means a Security evidencing all or a part of a series of
Securities issued to and registered in the name of the depository for such
series, or its nominee, in accordance with Section 305, and bearing the legend
prescribed in Section 203.
4
<PAGE> 11
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the government which issued the Foreign
Currency in which the Securities of a particular series are payable, for the
payment of which its full faith and credit is pledged or (ii) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality of
the United States of America or such government which issued the Foreign
Currency in which the Securities of such series are payable, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America or such other government, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and (iii) shall
also include a depository receipt issued by a bank or trust company as custodian
with respect to any such Government Obligation or a specific payment of interest
on or principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt.
"Guaranty" by any Person means any Obligation, contingent or otherwise, of
such Person guaranteeing any Indebtedness of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, and including, without
limitation, every Obligation of such Person (i) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Indebtedness or to purchase
(or to advance or supply funds for the purchase of) any security for the payment
of such Indebtedness, (ii) to purchase property, securities or services for the
purpose of assuring the holder of such Indebtedness of the payment of such
Indebtedness or (iii) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness; provided, however, that a
Guaranty by any Person shall not include endorsements by such Person for
collection or deposit, in either case in the ordinary course of business. The
terms "Guaranteed," "Guaranteeing" and "Guarantor" shall have meanings
correlative to the foregoing.
"Holder" means, in the case of a Registered Security, the Person in whose
name a Security is registered in the Security Register and, in the case of a
Bearer Security, the bearer thereof and, when used with respect to any coupon,
shall mean the bearer thereof.
"Indebtedness" means, with respect to any Person, without duplication, (i)
any Obligation of such Person relating to any indebtedness of such Person (A)
for borrowed money (whether or not the recourse of the lender is to the whole of
the assets, of such person or only to a portion thereof), (B) evidenced by
notes, debentures or similar instruments (including purchase money obligations)
given in connection with the acquisition of any property or assets (other than
trade accounts payable for inventory or similar property acquired in the
ordinary course of business), including securities, for the payment of which
such Person is liable, directly or indirectly, or the payment of which is
secured by a lien, charge or encumbrance on
5
<PAGE> 12
property or assets of such Person, (C) for goods, materials or services
purchased in the ordinary course of business (other than trade accounts payable
arising in the ordinary course of business), (D) with respect to letters of
credit or bankers acceptances issued for the account of such Person or
performance, surety or similar bonds, (E) for the payment of money relating to a
Capitalized Lease Obligation or (F) under interest rate swaps, caps or similar
agreements and foreign exchange contracts, currency swaps or similar agreements;
(ii) any liability of others of the kind described in the preceding clause (i),
which such Person has Guaranteed or which is otherwise its legal liability; and
(iii) any and all deferrals, renewals, extensions and refunding of, or
amendments, modifications or supplements to, any liability of the kind described
in any of the preceding clauses (i) or (ii).
"Indenture" means this instrument as originally executed or as it may be
supplemented or amended from time to time by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, and shall
include the terms of particular series of Securities established as contemplated
by Section 301; provided, however, that, if at any time more than one Person is
acting as Trustee under this instrument, "Indenture" shall mean, with respect to
any one or more series of Securities for which such Person is Trustee, this
instrument as originally executed or as it may be supplemented or amended from
time to time by one or more indentures supplemental hereto entered into pursuant
to the applicable provisions hereof and shall include the terms of the or those
particular series of Securities for which such Person is Trustee established as
contemplated by Section 301, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is
Trustee, regardless of when such terms or provisions were adopted, and exclusive
of any provisions or terms adopted by means of one or more indentures
supplemental hereto executed and delivered after such Person had become such
Trustee but to which such Person, as such Trustee, was not a party.
"Indexed Security" means a Security the terms of which provide that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"Interest," when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, shall mean interest
payable after Maturity.
"Interest Payment Date," when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Make-Whole Amount," when used with respect to any Security, means the
amount, if any, in addition to principal (and accrued interest thereon, if any)
which is required by a Security, under the terms and conditions specified
therein or as otherwise specified as contemplated by Section 301, to be paid by
the Company to the Holder thereof in connection with any optional redemption or
accelerated payment of such Security.
6
<PAGE> 13
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment or otherwise.
"Obligation" of any Person with respect to any specified Indebtedness
means any obligation of such Person to pay principal, premium, interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to such Person, whether or not a claim
for such post-petition interest is allowed in such Proceeding), penalties,
reimbursement or indemnification amounts, fees, expenses or other amounts
relating to such Indebtedness.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board of Directors, 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.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company or who may be an employee of or other counsel for the
Company and who shall be satisfactory to the Trustee.
"Original Issue Discount Security" means any Security which provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding," when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or
redemption (including repayment at the option of the Holder) money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent)
for the Holders of such Securities and any coupons appertaining thereto;
provided, however, that, if such Securities are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made;
(iii) Securities, except to the extent provided in Sections 1402 and
1403, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article Fourteen; and
7
<PAGE> 14
(iv) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities
in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company.
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 502, (ii) the principal amount of any Security denominated
in a Foreign Currency that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be equal
to the Dollar equivalent, determined pursuant to Section 301 as of the date such
Security is originally issued by the Company, of the principal amount (or, in
the case of an Original Issue Discount Security, the Dollar equivalent as of
such date of original issuance of the amount determined as provided in clause
(i) above) of such Security, (iii) the principal amount of any Indexed Security
that may be counted in making such determination or calculation and that shall
be deemed outstanding for such purpose shall be equal to the principal face
amount of such Indexed Security at original issuance, unless otherwise provided
with respect to such Security pursuant to Section 301, and (iv) Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in making such calculation or 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 owned as
provided in clause (iv) above 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. In case of a dispute as to
such right, the advice of counsel shall be full protection in respect of any
decision made by the Trustee in accordance with such advice.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium or Make-Whole Amount, if any) or interest on any
Securities or coupons on behalf of the Company.
8
<PAGE> 15
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Payment," when used with respect to the Securities of or within
any series, means the place or places where the principal of (and premium or
Make-Whole Amount, if any) and interest on such Securities are payable as
specified as contemplated by Sections 301 and 1002.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
"Preferred Stock" means, with respect to any Person, all capital stock
issued by such Person that are entitled to a preference or priority over any
other capital stock issued by such Person with respect to any distribution of
such Person's assets, whether by dividend or upon any voluntary or involuntary
liquidation, dissolution or winding up.
"Redemption Date," when used with respect to any Security to be redeemed,
in whole or in part, 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 specified in the related Officers' Certificate or supplemental
indenture contemplated by and pursuant to Section 301, at which it is to be
redeemed pursuant to this Indenture.
"Registered Security" shall mean any Security which is registered in the
Security Register.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Registered Securities of or within any series means the date
specified for that purpose as contemplated by Section 301, whether or not a
Business Day.
"Repayment Date" means, when used with respect to any Security to be
repaid at the option of the Holder, the date fixed for such repayment by or
pursuant to this Indenture.
"Repayment Price" means, when used with respect to any Security to be
repaid at the option of the Holder, the price at which it is to be repaid by or
pursuant to this Indenture.
9
<PAGE> 16
"Responsible Officer," when used with respect to the Trustee, means any
senior vice president, vice president (whether or not designated by a number or
a word or words added before or after the title "vice president"), assistant
vice president, assistant secretary, trust officer or assistant trust officer
working in its Corporate Trust Department, or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and working in its Corporate Trust Department, and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of such officer's knowledge and familiarity
with the particular subject.
"Security" has the meaning stated in the first recital of this Indenture
and, more particularly, means any Security or Securities authenticated and
delivered under this Indenture; provided, however, that, if at any time there is
more than one Person acting as Trustee under this Indenture, "Securities" with
respect to the Indenture as to which such Person is Trustee shall have the
meaning stated in the first recital of this Indenture and shall more
particularly mean Securities authenticated and delivered under this Indenture,
exclusive, however, of Securities of any series as to which such Person is not
Trustee.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" (as defined in Article I, Rule 1-02 of Regulation S-X, promulgated
under the Securities Act of 1933) of the Company.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of or within any series means a date fixed by the Company
pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" means, with respect to any Person, any corporation, limited
liability company, partnership or other entity of which a majority of (i) the
voting power of the voting equity securities or (ii) the outstanding equity
interests are owned, directly or indirectly, by such Person. For the purposes of
this definition, "voting equity securities" means equity securities having
voting power for the election of directors, whether at all times or only so long
as no senior class of security has such voting power by reason of any
contingency.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended and as in force at the date as of which this Indenture was executed,
except as provided in Section 905.
10
<PAGE> 17
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this Indenture 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; provided, however, that
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean only the Trustee with respect
to Securities of that series.
"United States" means, unless otherwise specified with respect to any
Securities pursuant to Section 301, the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"United States Person" means, unless otherwise specified with respect to
any Securities pursuant to Section 301, an individual who is a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or an estate or
trust the income of which is subject to United States Federal income taxation
regardless of its source.
"Yield to Maturity" means the yield to maturity, computed at the time of
issuance of a Security (or, if applicable, at the most recent redetermination of
interest on such Security) and as set forth in such Security in accordance with
generally accepted United States bond yield computation principles.
SECTION 102. Compliance Certificates and Opinions. Upon any application or
request by the Company to the Trustee to take any action under any provision of
this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (including certificates delivered
pursuant to Section 1008) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant 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;
11
<PAGE> 18
(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 condition or
covenant 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 an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of the Outstanding Securities of all series or one
or more series, as the case may be, may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Holders in person
or by agents duly appointed in writing. If Securities of a series are issuable
as Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting in favor
thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and held in
accordance with the provisions of Article Fifteen, or a combination of such
instruments and any such record. Except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments or record
or both are delivered to the Trustee
12
<PAGE> 19
and, where it is hereby expressly required, to the Company. Such instrument or
instruments and any such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments or so voting at any such meeting. Proof of
execution of any such instrument or of a writing appointing any such agent, or
of the holding by any Person of a Security, shall be sufficient for any purpose
of this Indenture and conclusive in favor of the Trustee and the Company and any
agent of the Trustee or the Company, if made in the manner provided in this
Section. The record of any meeting of Holders of Securities shall be proved in
the manner provided in Section 1506.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate 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 reasonable manner which the Trustee deems sufficient.
(c) The ownership of Registered Securities shall be proved by the
Security Register. As to any matter relating to beneficial ownership interests
in any Global Security, the appropriate depository's records shall be
dispositive for purposes of this Indenture.
(d) The ownership of Bearer Securities may be proved by the
production of such Bearer Securities or by a certificate executed, as
depository, by any trust company, bank, banker or other depository, wherever
situated, if such certificate shall be deemed by the Trustee to be satisfactory,
showing that at the date therein mentioned such Person had on deposit with such
depository, or exhibited to it, the Bearer Securities therein described; or such
facts may be proved by the certificate or affidavit of the Person holding such
Bearer Securities, if such certificate or affidavit is deemed by the Trustee to
be satisfactory. The Trustee and the Company may assume that such ownership of
any Bearer Security continues until (1) another certificate or affidavit bearing
a later date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the Trustee by some other Person, or (3)
such Bearer Security is surrendered in exchange for a Registered Security, or
(4) such Bearer Security is no longer Outstanding. The ownership of Bearer
Securities may also be proved in any other manner which the Trustee deems
sufficient.
(e) If the Company shall solicit from the Holders of Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, in or pursuant to a Board
Resolution, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do
13
<PAGE> 20
so. Notwithstanding TIA Section 316(c), such record date shall be the record
date specified in or pursuant to such Board Resolution, which shall be a date
not earlier than the date 30 days prior to the first solicitation of Holders
generally in connection therewith and not later than the date such solicitation
is completed. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of Outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the Outstanding Securities shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than eleven months after the
record date.
(f) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee, any
Security Registrar, any Paying Agent, any Authenticating Agent or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
SECTION 105. Notices, etc., to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(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 State Street Bank and Trust Company,
Two International Place, Boston MA 02110, Attention: Corporate Trust
Department; 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 Indenture or at any other address
previously furnished in writing to the Trustee by the Company, Attention:
Chief Financial Officer, or
(3) either the Trustee or the Company, by the other party,
shall be sufficient for every purpose hereunder if given by facsimile
transmission, receipt confirmed by telephone followed by an original copy
delivered by guaranteed overnight courier; if to the Trustee at facsimile
number (617) 664-5371; and if to the Company at facsimile number (408)
554-9780.
14
<PAGE> 21
SECTION 106. Notice to Holders: Waiver. Where this Indenture provides for
notice of any event to Holders of Registered Securities by the Company or the
Trustee, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each such 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 of Registered Securities is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders of Registered Securities or the sufficiency of any notice to
Holders of Bearer Securities given as provided herein. Any notice mailed to a
Holder in the manner herein prescribed shall be conclusively deemed to have been
received by such Holder, whether or not such Holder actually receives such
notice.
If by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification to Holders of Registered Securities as
shall be made with the approval of the Trustee shall constitute a sufficient
notification to such Holders for every purpose hereunder.
Except as otherwise expressly provided herein or otherwise specified with
respect to any Securities pursuant to Section 301, where this Indenture provides
for notice to Holders of Bearer Securities of any event, such notice shall be
sufficiently given if published in an Authorized Newspaper in The City of New
York and in such other city or cities as may be specified in such Securities on
a Business Day, such publication to be not later than the latest date, if any,
and not earlier than the earliest date, if any, prescribed for the giving of
such notice. Any such notice shall be deemed to have been given on the date of
such publication or, if published more than once, on the date of the first such
publication.
If by reason of the suspension of publication of any Authorized Newspaper
or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to any particular Holder of Bearer Securities as provided above, nor
any defect in any notice so published, shall affect the sufficiency of such
notice with respect to other Holders of Bearer Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
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
15
<PAGE> 22
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
SECTION 107. Counterparts; Effect of Headings and Table of Contents. This
Indenture 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 Indenture. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
SECTION 108. 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 109. Severability Clause. In case any provision in this Indenture
or in any Security or coupon shall be held invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
SECTION 110. Benefits of Indenture. Nothing in this Indenture or in the
Securities or coupons, express or implied, shall give to any Person, other than
the parties hereto, any Security Registrar, any Paying Agent, any Authenticating
Agent and their successors hereunder and the Holders any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law. This Indenture and the Securities and coupons
shall be governed by and construed in accordance with the law of the State of
New York. This Indenture is subject to the provisions of the TIA that are
required to be part of this Indenture and shall, to the extent applicable, be
governed by such provisions.
SECTION 112. Legal Holidays. In any case where any Interest Payment Date,
Redemption Date, Repayment Date, sinking fund payment date, Stated Maturity or
Maturity of any Security or the last date on which a Holder has the right to
exchange a Security shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or any Security or coupon
other than a provision in the Securities of any series which specifically states
that such provision shall apply in lieu hereof), payment of interest or
principal (and premium or Make-Whole Amount, if any) or exchange of such
security need not be made at such Place of Payment on such date, but (except as
otherwise provided in the supplemental indenture with respect to such Security)
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, Redemption
Date, Repayment Date or sinking fund payment date, or at the Stated Maturity or
Maturity, or on such last day for exchange, provided that no interest shall
accrue on the amount so payable for the period from and after such Interest
Payment Date, Redemption Date, Repayment Date, sinking fund payment date, Stated
Maturity or Maturity, as the case may be.
16
<PAGE> 23
SECTION 113. Immunity of Stockholders, Directors, Officers and Agents of
the Company. No recourse under or upon any obligation, covenant or agreement
contained in this Indenture, or in any Security, or because of any indebtedness
evidenced thereby, shall be had against any past, present or future stockholder,
employee, officer or director, as such, of the Company or of any successor,
either directly or through the Company or any successor, under any rule of law,
statute or constitutional provision or by the enforcement of any assessment or
by any legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance of the Securities by the Holders
and as part of the consideration for the issue of the Securities.
SECTION 114. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof which is required
or deemed to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required 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.
ARTICLE TWO - SECURITIES FORMS
SECTION 201. Forms of Securities. The Registered Securities, if any, of
each series and the Bearer Securities, if any, of each series and related
coupons shall be substantially in the form of Exhibit A hereto or in such other
form as shall be established in one or more indentures supplemental hereto or
approved from time to time by or pursuant to a Board Resolution in accordance
with Section 301, shall have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture or any indenture supplemental hereto, and may have such letters,
numbers or other marks of identification or designation and such legends or
endorsements placed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Indenture, 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 Securities may be
listed, or to conform to usage.
Unless otherwise specified as contemplated by Section 301, Bearer
Securities shall have interest coupons attached.
The definitive Securities and coupons shall be printed, lithographed or
engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or mechanically reproduced on safety paper or
may be produced in any other manner, all as determined by the officers executing
such Securities or coupons, as evidenced by their execution of such Securities
or coupons.
17
<PAGE> 24
SECTION 202. Form of Trustee's Certificate of Authentication. Subject to
Section 611, the Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
[__________________________________],
as Trustee
Dated: ______________ By:__________________________________________
Authorized Signatory
SECTION 203. Securities Issuable in Global Form. If Securities of or
within a series are issuable in the form of one or more Global Securities, then,
notwithstanding clause (8) of Section 301 and the provisions of Section 302, any
such Global Security or Securities may provide that it or they shall represent
the aggregate amount of all Outstanding Securities of such series (or such
lesser amount as is permitted by the terms thereof) from time to time endorsed
thereon and may also provide that the aggregate amount of Outstanding Securities
of such series represented thereby may from time to time be increased or
decreased to reflect exchanges. Any endorsement of any Global Security to
reflect the amount, or any increase or decrease in the amount, or changes in the
rights of Holders thereof, of Outstanding Securities represented thereby shall
be made (or caused to be made) by the Trustee in such manner or by such Person
or Persons as shall be specified therein or in the Company Order to be delivered
to the Trustee pursuant to Section 303 or 304. Subject to the provisions of
Section 303 and, if applicable, Section 304, the Trustee shall deliver and
redeliver any Global Security in permanent global form in the manner and upon
instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 303 or 304 has
been, or simultaneously is, delivered, any instructions by the Company with
respect to endorsement or delivery or redelivery of a Global Security shall be
in writing but need not comply with Section 102 and need not be accompanied by
an Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Global Security if such Security was never issued and
sold by the Company and the Company delivers to the Trustee the Global Security
together with written instructions (which need not comply with Section 102 and
need not be accompanied by an Opinion of Counsel) with regard to the reduction
in the principal amount of Securities represented thereby, together with the
written statement contemplated by the last sentence of Section 303.
Notwithstanding the provisions of Section 307, unless otherwise specified
as contemplated by Section 301, payment of principal of and any premium or
Make-Whole
18
<PAGE> 25
Amount, if any, and interest on any Global Security in permanent global form
shall be made to the registered Holder thereof.
Notwithstanding the provisions of Section 308 and except as provided in
the preceding paragraph, the Company, the Trustee and any agent of the Company
and the Trustee shall treat as the Holder of such principal amount of
Outstanding Securities represented by a permanent Global Security (i) in the
case of a permanent Global Security in registered form, the Holder of such
permanent Global Security in registered form, or (ii) in the case of a permanent
Global Security in bearer form, Euroclear or CEDEL.
Any Global Security authenticated and delivered hereunder shall bear a
legend in substantially the following form:
"This Security is a Global Security within the meaning set forth in
the Indenture hereinafter referred to and is registered in the name
of a Depository or a nominee of a Depository. This Security is
exchangeable for Securities registered in the name of a person other
than the Depository or its nominee only in the limited circumstances
described in the Indenture, and may not be transferred except as a
whole by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of
the Depository or by the Depository or its nominee to a successor
Depository or its nominee."
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 one or more Board Resolutions or pursuant to authority granted by
one or more Board Resolutions and, subject to Section 303, set forth 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 such series from all other series of
Securities);
(2) Any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange
19
<PAGE> 26
for, or in lieu of, other Securities of the series pursuant to Section
304, 305, 306, 906, 1107 or 1305) and the minimum authorized denominations
with respect to the Securities of such series;
(3) The price (expressed as a percentage of the principal
amount thereof) at which such Securities will be issued and, if other than
the principal amount thereof, the portion of the principal amount thereof
payable upon declaration of acceleration of the maturity thereof;
(4) The date or dates, or the method for determining such date
or dates, on which the principal of such Securities will be payable;
(5) The rate or rates (which may be fixed or variable), or the
method by which such rate or rates shall be determined, at which such
Securities will bear interest, if any;
(6) The date or dates, or the method for determining such date
or dates, from which any such interest will accrue, the dates on which any
such interest will be payable, the record dates for such interest payment
dates, or the method by which such dates shall be determined, the persons
to whom such interest shall be payable, and the basis upon which interest
shall be calculated if other than that of a 360-day year of twelve 30-day
months;
(7) The Make-Whole Amount, if any, or method for determining
the Make-Whole Amount, if any, payable with respect to such Securities,
and the terms upon which such amount, if any, will be payable;
(8) The place or places where the principal of (and premium or
Make-Whole Amount, if any) and interest, if any, on such Securities will
be payable, where such Securities may be surrendered for registration of
transfer or exchange and where notices or demands to or upon the Company
in respect of such Securities and this Indenture may be served;
(9) The period or periods, if any, within which, the price or
prices at which and the other terms and conditions upon which such
Securities may, pursuant to any optional or mandatory redemption
provisions, be redeemed, as a whole or in part, at the option of the
Company;
(10) The obligation, if any, of the Company to redeem, repay
or purchase such Securities pursuant to any sinking fund or analogous
provision or at the option of a holder thereof, and the period or periods
within which, the price or prices at which and the other terms and
conditions upon which such Securities will be redeemed, repaid or
purchased, as a whole or in part, pursuant to such obligation;
20
<PAGE> 27
(11) If other than Dollars, the currency or currencies in
which such Securities are denominated and payable, which may be a foreign
currency or units of two or more foreign currencies or a composite
currency or currencies, the manner of determining the equivalent thereof
in Dollars for purposes of the definition of "Outstanding" in Section 101,
and the terms and conditions relating thereto;
(12) Whether the amount of payments of principal of (and
premium or Make-Whole Amount, if any, including any amount due upon
redemption, if any) or interest, if any, on such Securities may be
determined with reference to an index, formula or other method (which
index, formula or method may, but need not be, based on the yield on or
trading price of other securities, including United States Treasury
securities or on a currency, currencies, currency unit or units, or
composite currency or currencies) and the manner in which such amounts
shall be determined;
(13) Whether the principal of (and premium or Make-Whole
Amount, if any) or interest on the Securities of the series are to be
payable, at the election of the Company or a Holder thereof, in a currency
or currencies, currency unit or units or composite currency or currencies
other than that in which such Securities are denominated or stated to be
payable, the period or periods within which, and the terms and conditions
upon which, such election may be made, and the time and manner of, and
identity of the exchange rate agent with responsibility for, determining
the exchange rate between the currency or currencies, currency unit or
units or composite currency or currencies in which such Securities are
denominated or stated to be payable and the currency or currencies,
currency unit or units or composite currency or currencies in which such
Securities are to be so payable;
(14) Provisions, if any, granting special rights to the
Holders of Securities of the series upon the occurrence of such events as
may be specified;
(15) Any deletions from, modifications of or additions to the
Events of Default or covenants of the Company with respect to Securities
of the series, whether or not such Events of Default or covenants are
consistent with the Events of Default or covenants set forth herein;
(16) Whether and under what circumstances the Company will pay
any additional amounts on such Securities in respect of any tax,
assessment or governmental charge and, if so, whether the Company will
have the option to redeem such Securities in lieu of making such payment;
(17) Whether Securities of the series are to be issuable as
Registered Securities, Bearer Securities (with or without coupons) or
both, any restrictions applicable to the offer, sale or delivery of Bearer
Securities and the terms upon which Bearer Securities of the series may be
exchanged for Registered Securities of the series
21
<PAGE> 28
and vice versa (if permitted by applicable laws and regulations), whether
any Securities of the series are to be issuable initially in temporary
global form and whether any Securities of the series are to be issuable in
permanent global form with or without coupons and, if so, whether
beneficial owners of interests in any such permanent global Security may,
or shall be required to, exchange such interests for Securities of such
series and of like tenor of any authorized form and denomination and the
circumstances under which any such exchanges may, or shall be required to,
occur, if other than in the manner provided in the Indenture, and, if
Registered Securities of the series are to be issuable as a Global
Security, the identity of the depository for such series;
(18) The date as of which any Bearer Securities of the series
and any temporary Global Security representing outstanding Securities of
the series shall be dated if other than the date of original issuance of
the first Security of the series to be issued;
(19) The Person to whom any interest on any Registered
Security of the series shall be payable, if other than the Person in whose
name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest, the
manner in which, or the Person to whom, any interest on any Bearer
Security of the series shall be payable, if otherwise than upon
presentation and surrender of the coupons appertaining thereto as they
severally mature, and the extent to which, or the manner in which, any
interest payable on a temporary Global Security on an Interest Payment
Date will be paid if other than in the manner provided herein; provided,
however, in each case, that the manner of determining such Person or
making such payment shall be acceptable to the Trustee (as not imposing on
it any undue administrative burden or risk of liability);
(20) The applicability, if any, of the defeasance and covenant
defeasance provisions of Article Fourteen hereof to the Securities of the
series;
(21) If the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions, then
the form and/or terms of such certificates, documents or conditions;
(22) Designation of the Trustee, if different from the Trustee
under the Indenture, with respect to such series and the terms applicable
to such Trustee (which shall be accepted by such Trustee by its execution
and delivery of a supplemental indenture as provided therein); and
(23) Any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
22
<PAGE> 29
All Securities of any one series and the coupons appertaining to any
Bearer Securities of such series shall be substantially identical except, in the
case of Registered Securities, as to denomination and except as may otherwise be
provided in or pursuant to such Board Resolution (subject to Section 303) and
set forth in such Officers' Certificate or in any such indenture supplemental
hereto. All Securities of any one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened, without the consent of
the Holders, for issuances of additional Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions, a copy of an appropriate
record of such action(s) 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 Securities
of such series.
SECTION 302. Denominations. The Securities of each series shall be
issuable in such denominations as shall be specified as contemplated by Section
301. With respect to Securities of any series denominated in Dollars, in the
absence of any such provisions with respect to the Securities of any series, the
Securities of such series, other than Global Securities (which may be of any
denomination), shall be issuable in denominations of $1,000 and any integral
multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating. The
Securities and any coupons appertaining thereto shall be executed on behalf of
the Company by its Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon, and attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities and coupons may be manual or facsimile signatures of
the present or any future such authorized officer and may be imprinted or
otherwise reproduced on the Securities.
Securities or coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities or coupons.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series, together with any
coupon appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities (accompanied by a copy of the Board Resolution and
the Officers' Certificate or supplemental indenture contemplated by Section
301), and the Trustee in accordance with the Company Order shall authenticate
and deliver such Securities; provided, however, that, in connection with its
original issuance, no Bearer Security shall be mailed or otherwise delivered to
any location in the United States; and
23
<PAGE> 30
provided further that, unless otherwise specified with respect to any series of
Securities pursuant to Section 301, a Bearer Security may be delivered in
connection with its original issuance only if the Person entitled to receive
such Bearer Security shall have furnished a certificate to Euroclear or CEDEL,
as the case may be, in the form set forth in Exhibit B-1 to this Indenture or
such other certificate as may be specified by the Company with respect to any
series of Securities pursuant to Section 301, dated no earlier than 15 days
prior to the earlier of the date on which such Bearer Security is delivered and
the date on which any temporary Security first becomes exchangeable for such
Bearer Security in accordance with the terms of such temporary Security and this
Indenture. If any Security shall be represented by a permanent global Bearer
Security, then, for purposes of this Section and Section 304, the notation of a
beneficial owner's interest therein upon original issuance of such Security or
upon exchange of a portion of a temporary Global Security shall be deemed to be
delivery in connection with its original issuance of such beneficial owner's
interest in such permanent Global Security. Except as permitted by Section 306,
the Trustee shall not authenticate and deliver any Bearer Security unless all
appurtenant coupons for interest then matured have been detached and canceled.
If all the Securities of any series are not to be issued at one time and
if the Board Resolution or supplemental indenture establishing such series shall
so permit, such Company Order may set forth procedures acceptable to the Trustee
for the issuance of such Securities and determining the terms of particular
Securities of such series, such as interest rate or formula, maturity date, date
of issuance and date from which interest shall accrue. In authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to TIA Section 315(a) through 315(d)) shall be fully protected in
relying upon,
(i) an Opinion of Counsel stating that
(a) the form or forms of such Securities and any coupons have
been established in conformity with the provisions of this
Indenture;
(b) the terms of such Securities and any coupons have been
established in conformity with the provisions of this Indenture; and
(c) such Securities, together with any coupons appertaining
thereto, when completed by appropriate insertions and executed and
delivered by the Company to the Trustee for authentication in
accordance with this Indenture, authenticated and delivered by the
Trustee in accordance with this Indenture and issued by the Company
in the manner and subject to any conditions specified in such
Opinion of Counsel, will constitute legal, valid and legally binding
obligations of the Company, enforceable in accordance with their
terms, subject to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization and other similar laws of general
applicability relating to or affecting the
24
<PAGE> 31
enforcement of creditors' rights generally and to general equitable
principles; and
(ii) an Officers' Certificate stating that all conditions precedent
provided for in this Indenture relating to the issuance of the Securities
have been complied with and that, to the best of the knowledge of the
signers of such certificate, that no Event of Default with respect to any
of the Securities shall have occurred and be continuing.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities (or to enter into the related
supplemental indenture, if applicable) if the issue of such Securities pursuant
to this Indenture will affect the Trustee's own rights, duties, obligations 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 the Securities of any series are not to be issued at one time,
it shall not be necessary to deliver an Officers' Certificate otherwise required
pursuant to Section 301 or a Company Order, or an Opinion of Counsel or an
Officers' Certificate otherwise required pursuant to the preceding paragraph at
the time of issuance of each Security of such series, but such order, opinion
and certificates, with appropriate modifications to cover such future issuances,
shall be delivered at or before the time of issuance of the first Security of
such series.
Each Registered Security shall be dated the date of its authentication and
each Bearer Security shall be dated as of the date specified as contemplated by
Section 301.
No Security or coupon shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security or Security to which such coupon appertains a certificate of
authentication substantially in the form provided for herein duly executed by
the Trustee (subject to Section 611) by manual signature of an authorized
signatory, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder and is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Security (including a Global Security)
shall have been authenticated and delivered hereunder but never issued and sold
by the Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309 together with a written statement (which
need not comply with Section 102 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
25
<PAGE> 32
SECTION 304. Temporary Securities.
(a) 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, in registered form, or, if authorized, in bearer form with one or
more coupons or without coupons, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as conclusively evidenced by their execution of such
Securities. In the case of Securities of any series, such temporary Securities
may be in global form.
Except in the case of temporary Global Securities (which shall be
exchanged as otherwise provided herein or as otherwise provided in or pursuant
to a Board Resolution or supplemental indenture pursuant to Section 301), if
temporary Securities of any series are issued, the Company will cause definitive
Securities of that series to be prepared without unreasonable delay. After the
preparation of definitive Securities of such series, the temporary Securities of
such series shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or agency of
the Company in a Place of Payment for that series, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities of any
series (accompanied by any non-matured coupons appertaining thereto), the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Securities of the same series of
authorized denominations; provided, however, that no definitive Bearer Security
shall be delivered in exchange for a temporary Registered Security; and provided
further that a definitive Bearer Security shall be delivered in exchange for a
temporary Bearer Security only in compliance with the conditions set forth in
Section 303. 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.
(b) Unless otherwise provided in or pursuant to a Board Resolution or
supplemental indenture pursuant to Section 301, the following provisions of this
Section 304(b) shall govern the exchange of temporary Securities other than
through the facilities of The Depository Trust Company. If any such temporary
Security is issued in global form, then such temporary Global Security shall,
unless otherwise provided therein, be delivered to the London office of a
depository or common depository upon and pursuant to written direction of the
Company (the "Common Depository"), for the benefit of Euroclear and CEDEL, for
credit to the respective accounts of the beneficial owners of such Securities
(or to such other accounts as they may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary Global
Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities, in aggregate principal
26
<PAGE> 33
amount equal to the principal amount of such temporary Global Security, executed
by the Company. On or after the Exchange Date, such temporary Global Security
shall be surrendered by the Common Depository to the Trustee, as the Company's
agent for such purpose, to be exchanged, in whole or from time to time in part,
for definitive Securities without charge, and the Trustee shall authenticate and
deliver, in exchange for each portion of such temporary Global Security, an
equal aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such temporary
Global Security to be exchanged. The definitive Securities to be delivered in
exchange for any such temporary Global Security shall be in bearer form,
registered form, permanent global bearer form or permanent global registered
form, or any combination thereof, as specified as contemplated by Section 301,
and, if any combination thereof is so specified, as requested by the beneficial
owner thereof (as directed by or pursuant to information provided by the Common
Depository); provided, however, that, unless otherwise specified in such
temporary Global Security, upon such presentation by the Common Depository, such
temporary Global Security shall be accompanied by a certificate dated the
Exchange Date or a subsequent date and signed by Euroclear as to the portion of
such temporary Global Security held for its account then to be exchanged and a
certificate dated the Exchange Date or a subsequent date and signed by CEDEL as
to the portion of such temporary Global Security held for its account then to be
exchanged, each in the form set forth in Exhibit A-2 to this Indenture or in
such other form as may be established pursuant to Section 301; and provided
further that definitive Bearer Securities shall be delivered in exchange for a
portion of a temporary Global Security only in compliance with the requirements
of Section 303.
Unless otherwise specified in such temporary Global Security, the interest
of a beneficial owner of Securities of a series in a temporary Global Security
shall be exchanged for definitive Securities of the same series and of like
tenor following the Exchange Date when the account holder instructs Euroclear or
CEDEL, as the case may be, to request such exchange on his behalf and delivers
to Euroclear or CEDEL, as the case may be, a certificate in the form set forth
in Exhibit B-1 to this Indenture (or in such other form as may be established
pursuant to Section 301), dated no earlier than 15 days prior to the Exchange
Date, copies of which certificate shall be available from the offices of
Euroclear and CEDEL, the Trustee, any Authenticating Agent appointed for such
series of Securities and each Paying Agent. Unless otherwise specified in such
temporary Global Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary Global Security, except that a Person
receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like unless such Person takes delivery of such definitive
Securities in person at the offices of Euroclear or CEDEL. Definitive Securities
in bearer form to be delivered in exchange for any portion of a temporary Global
Security shall be delivered only to an address located outside the United
States.
Until exchanged in full as hereinabove provided, the temporary Securities
of any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and of like tenor
authenticated and delivered hereunder, except that, unless
27
<PAGE> 34
otherwise specified as contemplated by Section 301, interest payable on a
temporary Global Security on an Interest Payment Date for Securities of such
series occurring prior to the applicable Exchange Date shall be payable to
Euroclear and CEDEL on such Interest Payment Date upon delivery by Euroclear and
CEDEL to the Trustee of a certificate or certificates in the form set forth in
Exhibit B-2 to this Indenture (or in such other forms as may be established
pursuant to Section 301), for credit without further interest on or after such
Interest Payment Date to the respective accounts of Persons who are the
beneficial owners of such temporary Global Security on such Interest Payment
Date and who have each delivered to Euroclear or CEDEL, as the case may be, a
certificate dated no earlier than 15 days prior to the Interest Payment Date
occurring prior to such Exchange Date in the form set forth as Exhibit B-1 to
this Indenture (or in such other forms as may be established pursuant to Section
301). Notwithstanding anything to the contrary herein contained, the
certifications made pursuant to this paragraph shall satisfy the certification
requirements of the preceding two paragraphs of this Section 304(b) and of the
third paragraph of Section 303 of this Indenture and the interests of the
Persons who are the beneficial owners of the temporary Global Security with
respect to which such certification was made will be exchanged for definitive
Securities of the same series and of like tenor on the Exchange Date or the date
of certification if such date occurs after the Exchange Date, without further
act or deed by such beneficial owners. Except as otherwise provided in this
paragraph, no payments of principal or interest owing with respect to a
beneficial interest in a temporary Global Security will be made unless and until
such interest in such temporary Global Security shall have been exchanged for an
interest in a definitive Security. Any interest so received by Euroclear and
CEDEL and not paid as herein provided shall be returned to the Trustee prior to
the expiration of two years after such Interest Payment Date in order to be
repaid to the Company.
SECTION 305. Registration, Registration of Transfer and Exchange. The
Company shall cause to be kept at the Corporate Trust Office of the Trustee or
in any office or agency of the Company in a Place of Payment a register for each
series of Securities (the registers maintained in such office or in any such
office or agency of the Company in a Place of Payment being herein sometimes
referred to collectively as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Registered Securities and of transfers of Registered Securities.
The Security Register shall be in written form or any other form capable of
being converted into written form within a reasonable time. The Trustee, at its
Corporate Trust Office, is hereby initially appointed "Security Registrar" for
the purpose of registering Registered Securities and transfers of Registered
Securities on such Security Register as herein provided. In the event that the
Trustee shall cease to be Security Registrar, it shall have the right to
examine, and be provided a copy of, the Security Register at all reasonable
times.
Subject to the provisions of this Section 305, upon surrender for
registration of transfer of any Registered Security of any series at any office
or agency of the Company in a Place of Payment for that series, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Registered
28
<PAGE> 35
Securities of the same series, of any authorized denominations and of a like
aggregate principal amount, bearing a number not contemporaneously outstanding,
and containing identical terms and provisions.
Subject to the provisions of this Section 305, at the option of the
Holder, Registered Securities of any series may be exchanged for other
Registered Securities of the same series, of any authorized denomination or
denominations and of a like aggregate principal amount, containing identical
terms and provisions, upon surrender of the Registered Securities to be
exchanged at any such office or agency. Whenever any such Registered Securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Registered Securities which the Holder
making the exchange is entitled to receive. Unless otherwise specified with
respect to any series of Securities as contemplated by Section 301, Bearer
Securities may not be issued in exchange for Registered Securities.
If (but only if) permitted by the applicable Board Resolution and (subject
to Section 303) set forth in the applicable Officers' Certificate, or in any
indenture supplemental hereto, delivered as contemplated by Section 301, at the
option of the Holder, Bearer Securities of any series may be exchanged for
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in default, any such permitted exchange may be
effected if the Bearer Securities are accompanied by payment in funds acceptable
to the Company in an amount equal to the face amount of such missing coupon or
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there is furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to any Paying Agent any
such missing coupon in respect of which such a payment shall have been made,
such Holder shall be entitled to receive the amount of such payment; provided,
however, that, except as otherwise provided in Section 1002, interest
represented by coupons shall be payable only upon presentation and surrender of
those coupons at an office or agency located outside the United States.
Notwithstanding the foregoing, in case a Bearer Security of any series is
surrendered at any such office or agency in a permitted exchange for a
Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date for payment, as the case may be, and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in
29
<PAGE> 36
accordance with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent Global Security shall be exchangeable
only as provided in this paragraph. If the depository for any permanent Global
Security is The Depository Trust Company ("DTC"), then, unless the terms of such
Global Security expressly permit such Global Security to be exchanged in whole
or in part for definitive Securities, a Global Security may be transferred, in
whole but not in part, only to a nominee of DTC, or by a nominee of DTC to DTC,
or to a successor to DTC for such Global Security selected or approved by the
Company or to a nominee of such successor to DTC. If at any time DTC notifies
the Company that it is unwilling or unable to continue as depository for the
applicable Global Security or Securities or if at any time DTC ceases to be a
clearing agency registered under the Securities Exchange Act of 1934 if so
required by applicable law or regulation, the Company shall appoint a successor
depository with respect to such Global Security or Securities. If (x) a
successor depository for such Global Security or Securities is not appointed by
the Company within 90 days after the Company receives such notice or becomes
aware of such unwillingness, inability or ineligibility, (y) an Event of Default
has occurred and is continuing and the beneficial owners representing a majority
in principal amount of the applicable series of Securities represented by such
Global Security or Securities advise DTC to cease acting as depository for such
Global Security or Securities or (z) the Company, in its sole discretion,
determines at any time that all Outstanding Securities (but not less than all)
of any series issued or issuable in the form of one or more Global Securities
shall no longer be represented by such Global Security or Securities, then the
Company shall execute, and the Trustee shall authenticate and deliver definitive
Securities of like series, rank, tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of such Global Security
or Securities. If any beneficial owner of an interest in a permanent global
Security is otherwise entitled to exchange such interest for Securities of such
series and of like tenor and principal amount of another authorized form and
denomination, as specified as contemplated by Section 301 and provided that any
applicable notice provided in the permanent Global Security shall have been
given, then without unnecessary delay but in any event not later than the
earliest date on which such interest may be so exchanged, the Company shall
execute, and the Trustee shall authenticate and deliver definitive Securities in
aggregate principal amount equal to the principal amount of such beneficial
owner's interest in such permanent Global Security. On or after the earliest
date on which such interests may be so exchanged, such permanent Global Security
shall be surrendered for exchange by DTC or such other depository as shall be
specified in the Company Order with respect thereto to the Trustee, as the
Company's agent for such purpose; provided, however, that no such exchanges may
occur during a period beginning at the opening of business 15 days before any
selection of Securities to be redeemed and ending on the relevant Redemption
Date if the Security for which exchange is requested may be among those selected
for redemption; and provided further that no Bearer Security delivered in
exchange for a portion of a permanent Global Security shall be mailed or
30
<PAGE> 37
otherwise delivered to any location in the United States. If a Registered
Security is issued in exchange for any portion of a permanent Global Security
after the close of business at the office or agency where such exchange occurs
on (i) any Regular Record Date and before the opening of business at such office
or agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, interest or Defaulted Interest, as the
case may be, will not be payable on such Interest Payment Date or proposed date
for payment, as the case may be, in respect of such Registered Security, but
will be payable on such Interest Payment Date or proposed date for payment, as
the case may be, only to the Person to whom interest in respect of such portion
of such permanent Global Security is payable in accordance with the provisions
of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar) 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, 1107 or 1305 not involving any transfer.
The Company or the Trustee, as applicable, shall not be required (i) to
issue, register the transfer of or exchange any Security if such Security may be
among those selected for redemption during a period beginning at the opening of
business 15 days before selection of the Securities to be redeemed under Section
1103 and ending at the close of business on (A) if such Securities are issuable
only as Registered Securities, the day of the mailing of the relevant notice of
redemption and (B) if such Securities are issuable as Bearer Securities, the day
of the first publication of the relevant notice of redemption or, if such
Securities are also issuable as Registered Securities and there is no
publication, the mailing of the relevant notice of redemption, or (ii) to
register the transfer of or exchange any Registered Security so selected for
redemption in whole or in part, except, in the case of any Registered Security
to be redeemed in part, the portion thereof not to be redeemed, or (iii) to
exchange any Bearer Security so selected for redemption except that such a
Bearer Security may be exchanged for a Registered Security of that series and
like tenor, provided that such Registered Security shall be simultaneously
surrendered for redemption, or (iv) to issue, register the transfer of or
31
<PAGE> 38
exchange any Security which has been surrendered for repayment at the option of
the Holder, except the portion, if any, of such Security not to be so repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. If any
mutilated Security or a Security with a mutilated coupon appertaining to it is
surrendered to the Trustee or the Company, together with, in proper cases, such
security or indemnity as may be required by the Company or the Trustee to save
each of them or any agent of either of them harmless, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same series and principal amount, containing identical terms and
provisions and bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to the surrendered Security.
If there shall be delivered to the Company and to the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security or
coupon, and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security or coupon has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new Security of the same series and principal
amount, containing identical terms and provisions and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains.
Notwithstanding the provisions of the previous two paragraphs, in case any
such mutilated, destroyed, lost or stolen Security or coupon has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Security, with coupons corresponding to the coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the Security to
which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium or
Make-Whole Amount, if any), and any interest on, Bearer Securities shall, except
as otherwise provided in Section 1002, be payable only at an office or agency
located outside the United States and, unless otherwise specified as
contemplated by Section 301, any interest on Bearer Securities shall be payable
only upon presentation and surrender of the coupons appertaining thereto.
Upon the issuance of any new Security 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.
32
<PAGE> 39
Every new Security of any series with its coupons, if any, issued pursuant
to this Section in lieu of any destroyed, lost or stolen Security, or in
exchange for a Security to which a destroyed, lost or stolen coupon appertains,
shall constitute an original additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Security and its coupons, if any,
or the destroyed, lost or stolen coupon shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series and their
coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved. Except as
otherwise specified with respect to a series of Securities in accordance with
the provisions of Section 301, interest on any Registered Security that is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest at the office or agency of the Company maintained
for such purpose pursuant to Section 1002; provided, however, that each
installment of interest on any Registered Security may at the Company's option
be paid by (i) mailing a check for such interest, payable to or upon the written
order of the Person entitled thereto pursuant to Section 308, to the address of
such Person as it appears on the Security Register or (ii) transfer to an
account maintained by the payee located inside the United States.
Unless otherwise provided as contemplated by Section 301 with respect to
the Securities of any series, payment of interest may be made, in the case of a
Bearer Security, by transfer to an account maintained by the payee with a bank
located outside the United States.
Unless otherwise provided as contemplated by Section 301, every permanent
global Security will provide that interest, if any, payable on any Interest
Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the case may be,
with respect to that portion of such permanent global Security held for its
account by Cede & Co. or the Common Depository, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of the beneficial
owners thereof.
In case a Bearer Security of any series is surrendered in exchange for a
Registered Security of such series after the close of business (at an office or
agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
33
<PAGE> 40
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 301, any interest on any Registered
Security of any series that 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 registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities of such
series (or their respective Predecessor Securities) are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Registered Security of such series
and the date of the proposed payment (which shall not be less than 20 days
after such notice is received by the Trustee), and at the same time the
Company shall deposit with the Trustee an amount of money in the currency
or currencies, currency unit or units or composite currency or currencies
in which the Securities of such series are payable (except as otherwise
specified pursuant to Section 301 for the Securities of such series) 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 on or prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to
the date of the proposed payment and not less than 10 days after the
receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date and, in the
name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to
be mailed, first-class postage prepaid, to each Holder of Registered
Securities of such series at his address as it appears in the Security
Register not less than 10 days prior to such Special Record Date. The
Trustee may, in its discretion, in the name and at the expense of the
Company, cause a similar notice to be published at least once in an
Authorized Newspaper in each Place of Payment, but such publications shall
not be a condition precedent to the establishment of such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Persons in whose names the
Registered Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following clause (2).
In case a Bearer Security of any series is surrendered at the office or
agency in a Place of Payment for such series in exchange for a Registered
Security of such series after the close of business at such office or
agency on any Special Record Date and
34
<PAGE> 41
before the opening of business at such office or agency on the related
proposed date for payment of Defaulted Interest, such Bearer Security
shall be surrendered without the coupon relating to such proposed date of
payment and Defaulted Interest will not be payable on such proposed date
of payment in respect of the Registered Security issued in exchange for
such Bearer Security, but will be payable only to the Holder of such
coupon when due in accordance with the provisions of this Indenture.
(2) The Company may make payment of any Defaulted Interest on
the Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 305, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners. Prior to due presentment of a
Registered Security for registration of transfer, the Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name such
Registered Security is registered as the owner of such Security for the purpose
of receiving payment of principal of (and premium or Make-Whole Amount, if any),
and (subject to Sections 305 and 307) interest on, such Registered Security and
for all other purposes whatsoever, whether or not such Registered Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary. All such payments so
made to any such Person, or upon such Person's order, shall be valid, and, to
the extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for money payable upon any such Security.
Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the Holder of any Bearer Security and the Holder of any coupon
as the absolute owner of such Security or coupon for the purpose of receiving
payment thereof or on account thereof and for all other purposes whatsoever,
whether or not such Security or coupon be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by notice
to the contrary.
No holder of any beneficial interest in any Global Security held on its
behalf by a depository shall have any rights under this Indenture with respect
to such Global Security and such depository (which is the Holder of such
security) shall be treated by the Company, the Trustee, and any agent of the
Company or the Trustee as the owner of such Global Security for all purposes
whatsoever. None of the Company, the Trustee, any Paying Agent or the
35
<PAGE> 42
Security Registrar will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests of a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any Global Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by any depository, as a Holder, with respect to
such Global Security or impair, as between such depository and owners of
beneficial interests in such Global Security, the operation of customary
practices governing the exercise of the rights of such depository (or its
nominee) as Holder of such Global Security.
SECTION 309. Cancellation. All Securities and coupons surrendered for
payment, redemption, repayment at the option of the Holder, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee,
and any such Securities and coupons and Securities and coupons surrendered
directly to the Trustee for any such purpose shall be promptly cancelled by it.
The Company may at any time deliver to the Trustee for cancellation any
Securities 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. If
the Company shall so acquire any of the Securities, however, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless and until the same are surrendered to the
Trustee for cancellation. 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. Cancelled Securities and coupons held by
the Trustee shall be destroyed by the Trustee and the Trustee shall deliver a
certificate of such destruction to the Company, unless the Trustee is otherwise
directed by a Company Order.
SECTION 310. Computation of Interest. Except as otherwise specified as
contemplated by Section 301 with respect to Securities of any series, interest
on the Securities of each series shall be computed on the basis of a 360-day
year consisting of twelve 30-day months.
ARTICLE FOUR - SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture. This Indenture shall
upon Company Request cease to be of further effect with respect to any series of
Securities specified in such Company Request (except as to any surviving rights
of registration of transfer or
36
<PAGE> 43
exchange of Securities of such series herein expressly provided for), and the
Trustee, upon receipt of a Company Order, and at the expense of the Company,
shall execute instruments in form and substance satisfactory to the Trustee and
the Company acknowledging satisfaction and discharge of this Indenture as to
such series when
(1) either
(A) all Securities of such series theretofore authenticated
and delivered and all coupons, if any, appertaining thereto (other
than (i) coupons appertaining to Bearer Securities surrendered for
exchange for Registered Securities and maturing after such exchange,
whose surrender is not required or has been waived as provided in
Section 305, (ii) Securities and coupons of such series which have
been destroyed, lost or stolen and which have been replaced or paid
as provided in Section 306, (iii) coupons appertaining to Securities
called for redemption and maturing after the relevant Redemption
Date, whose surrender has been waived as provided in Section 1106,
and (iv) Securities and coupons of such series for whose payment
money has theretofore been deposited in trust or segregated and held
in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) all Securities of such series and, in the case of (i) or
(ii) below, any coupons appertaining thereto 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) if redeemable at the option of the Company, are to
be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for the purpose an amount in the currency or
currencies, currency unit or units or composite currency or
currencies in which the Securities of such series are payable,
sufficient to pay and discharge the entire indebtedness on such
Securities and such coupons not theretofore delivered to the Trustee
for cancellation, for principal (and premium or Make-Whole Amount,
if any) and interest to the date
37
<PAGE> 44
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 as to such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 606, the obligations of the Company to any Authenticating Agent under
Section 611 and, if money shall have been deposited with and held by 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.
SECTION 402. Application of Trust Funds. Subject to the provisions of the
last paragraph of Section 1003, all money deposited with the Trustee pursuant to
Section 401 shall be held in trust and applied by it, in accordance with the
provisions of the Securities, the coupons and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Persons entitled thereto,
of the principal (and premium or Make-Whole Amount, if any), and any interest
for whose payment such money has been deposited with or received by the Trustee,
but such money need not be segregated from other funds except to the extent
required by law.
ARTICLE FIVE - REMEDIES
SECTION 501. Events of Default. "Event of Default," wherever used herein
with respect to any particular series of Securities, means any one of the
following events (whatever the reason for such Event of Default and whether or
not it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) default in the payment of any interest on any Security of
that series or of any coupon appertaining thereto, when such interest or
coupon becomes due and payable, and continuance of such default for a
period of 30 days; or
38
<PAGE> 45
(2) default in the payment of the principal of (or premium or
Make-Whole Amount, if any, on) any Security of that series when it becomes
due and payable at its Maturity; or
(3) default in the deposit of any sinking fund payment, when
and as due by the terms of any Security of that series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture with respect to any Security of
that series (other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a period of 60
days after there has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of
at least 25% in principal amount of the Outstanding Securities of that
series a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(5) default under any bond, debenture, note, mortgage,
indenture or instrument under which there may be issued or by which there
may be secured or evidenced any indebtedness for money borrowed by the
Company (or by any Subsidiary, the repayment of which the Company has
guaranteed or for which the Company is directly responsible or liable as
obligor or guarantor), having an aggregate principal amount outstanding of
at least $25,000,000, whether such indebtedness now exists or shall
hereafter be created, which default 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 such
indebtedness having been discharged, or such acceleration having been
rescinded or annulled, 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 and stating that such notice is a "Notice of Default"
hereunder; or
(6) the Company or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against
it in an involuntary case,
39
<PAGE> 46
(C) consents to the appointment of a Custodian of it or
for all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors; or
(7) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or any
Significant Subsidiary or for all or substantially all of either of
its property, or
(C) orders the liquidation of the Company or any
Significant Subsidiary, and the order or decree remains unstayed and
in effect for 90 days; or
(8) any other Event of Default provided with respect to
Securities of that series.
As used in this Section 501, the term "Bankruptcy Law" means title 11, U.S. Code
or any similar Federal or state law for the relief of debtors and the term
"Custodian" means any receiver, trustee, assignee, liquidator or other similar
official under any Bankruptcy Law.
SECTION 502. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and 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 Securities of
that Series are Original Issue Discount Securities or Indexed Securities, such
portion of the principal as may be specified in the terms thereof) of all 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 the Holders), and upon
any such declaration such principal or specified portion thereof shall become
immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of 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 of acceleration and its
consequences if:
40
<PAGE> 47
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay in the currency, currency unit or composite currency in
which the Securities of such series are payable (except as otherwise
specified pursuant to Section 301 for the Securities of such series):
(A) all overdue installments of interest on all
Outstanding Securities of that series and any related coupons,
(B) the principal of (and premium or Make-Whole Amount,
if any, on) any Outstanding Securities of that series which have
become due otherwise than by such declaration of acceleration and
interest thereon at the rate or rates borne by or provided for in
such Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue installments of interest at the rate
or rates borne by or provided for in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that
series, other than the nonpayment of the principal of (or premium or
Make-Whole Amount, if any) or interest on 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 installment of
interest on any Security of any series and any related coupon 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 or Make-Whole Amount, if any, on) any Security of any series at
its Maturity,
then the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities of such series and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium or Make-Whole Amount, if any) and interest, with interest upon any
overdue principal (and premium or Make-Whole Amount, if any) and, to the extent
that payment of such interest shall be legally enforceable, upon any
41
<PAGE> 48
overdue installments of interest at the rate or rates borne by or provided for
in such Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities of such series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such Securities
of such series, wherever situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series and any
related coupons by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Securities of any series shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment of
overdue principal, premium or Make-Whole Amount, if any, or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount, or
such lesser amount as may be provided for in the Securities of such
series, of principal (and premium or Make-Whole Amount, if any) and
interest owing and unpaid in respect of the Securities and to file such
other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(ii) 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 of Securities of
42
<PAGE> 49
such series and coupons to make such payments to the Trustee, and in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee and any
predecessor Trustee, their agents and counsel, and any other amounts due the
Trustee or any predecessor Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the Holders
of the Securities, and it shall not be necessary to make any Holders of the
Securities parties to any such proceedings.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities
or Coupons. All rights of action and claims under this Indenture or any of the
Securities or coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or coupons or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, 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 and
coupons in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected. Any money collected by the
Trustee pursuant to this Article shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium or Make-Whole Amount, if any) or
interest, upon presentation of the Securities or coupons, or both, as the case
may be, and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities and coupons for principal (and premium or Make-Whole Amount, if
any) and interest, 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 aggregate amounts due and payable on such
Securities and coupons for principal (and premium or Make-Whole Amount, if
any) and interest, respectively; and
43
<PAGE> 50
THIRD: To the payment of the remainder, if any, to the Company.
SECTION 507. Limitation on Suits. No Holder of any Security of any series
or any related coupon 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
indemnity reasonably satisfactory to the Trustee against the costs,
expenses and liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee 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 such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
or Make-Whole Amount, if any, and Interest. Notwithstanding any other provision
in this Indenture, the Holder of any Security or coupon shall have the right
which is absolute and unconditional to receive payment of the principal of (and
premium or Make-Whole Amount, if any) and (subject to Sections 305 and 307)
interest on such Security or payment of such coupon on the respective due dates
expressed in such Security or coupon (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.
44
<PAGE> 51
SECTION 509. Restoration of Rights and Remedies. If the Trustee or any
Holder of a Security or coupon 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, the Company, the Trustee and the
Holders of Securities and coupons shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities or coupons in the last paragraph of Section 306, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders of
Securities or coupons 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 Security or coupon 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 of Securities or coupons, as the
case may be.
SECTION 512. Control by Holders of Securities. The Holders of not less
than a majority in principal amount of the Outstanding Securities of any series
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Securities of such series,
provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve
it in personal liability or be unduly prejudicial to the Holders of
Securities of such series not joining therein.
45
<PAGE> 52
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction by Holders.
SECTION 513. Waiver of Past Defaults. The Holders of not less than a
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all the Securities of such series and any related
coupons waive any past default hereunder with respect to such series and its
consequences, except a default
(1) in the payment of the principal of (or premium or
Make-Whole Amount, if any) or interest on any Security of such series or
any related coupons, 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; or
(3) in respect of a covenant or provision hereof for the
benefit or protection of the Trustee, without its express written consent.
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 Event of Default or impair any right consequent thereon.
SECTION 514. 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.
SECTION 515. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Security by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount of the
46
<PAGE> 53
Outstanding Securities of any series, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of (or premium or Make-Whole
Amount, if any) or interest on any Security on or after the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date).
ARTICLE SIX - THE TRUSTEE
SECTION 601. Notice of Defaults. Within 90 days after the occurrence of
any default hereunder with respect to the Securities of any series, the Trustee
shall transmit in the manner and to the extent provided in TIA Section 313(c),
notice of such default hereunder known to the Trustee, unless such default shall
have been cured or waived; provided, however, that, except in the case of a
default in the payment of the principal of (or premium or Make-Whole Amount, if
any) or interest on any Security of such series, or in the payment of any
sinking or purchase fund installment with respect to the Securities of such
series, the Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee, or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determine
that the withholding of such notice is in the interests of the Holders of the
Securities and coupons of such series; and provided further that in the case of
any default or breach of the character specified in Section 501(4) with respect
to the Securities and coupons of such series, no such notice to Holders shall be
given until at least 60 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 the
Securities of such series.
SECTION 602. Certain Rights of Trustee. Subject to the provisions of TIA
Section 315(a) through 315(d):
(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, coupon or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
(other than delivery of any Security, together with any coupons
appertaining thereto, to the Trustee for authentication and delivery
pursuant to Section 303 which shall be sufficiently evidenced as provided
therein) and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or
47
<PAGE> 54
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 of Securities of any series or any related
coupons pursuant to this Indenture, unless such Holders shall have offered
to the Trustee security or indemnity reasonably satisfactory to the
Trustee 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, coupon or other paper or document,
unless requested in writing so to do by the Holders of not less than a
majority in aggregate principal amount of the Outstanding Securities of
any series; provided that, if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the
terms of this Indenture, the Trustee may require reasonable indemnity
against such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such examination shall be paid by the Holders
or, if paid by the Trustee, shall be repaid by the Holders upon demand.
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, relevant to the facts or matters that are the subject of its
inquiry, personally or by agent or attorney;
(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;
(8) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and reasonably believed by it to
be authorized or within the discretion or rights or powers conferred upon
it by this Indenture;
48
<PAGE> 55
(9) any permissive right or power available to the Trustee
under this Indenture or any supplement hereto shall not be construed to be
a mandatory duty or obligation;
(10) the Trustee shall not be charged with knowledge of any
matter (including any default, other than as described in Section 501(1),
(2) or (3)) unless and except to the extent actually known to a
Responsible Officer of the Trustee or to the extent written notice thereof
is received by the Trustee at the Corporate Trust Office; and
(11) the Trustee shall have no liability for the selection of
any Independent Investment Banker; and shall have no liability for any
inaccuracy in the books and records of, or for any actions or omissions
of, DTC, Euroclear or CEDEL or any depository acting on behalf of any of
them.
The Trustee shall not be required 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.
Except during the continuance of an Event of Default, the Trustee
undertakes to perform only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
SECTION 603. Not Responsible for Recitals or Issuance of Securities. The
recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, and in any coupons shall be taken as the
statements of the Company, and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 604. May Hold Securities. The Trustee, any Paying Agent, Security
Registrar, Authenticating Agent or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee of Securities
and coupons and, subject to TIA Sections 310(b) and 311, may otherwise deal with
the Company with the same rights it would have if it were not Trustee, Paying
Agent, Security Registrar, Authenticating Agent or such other agent.
SECTION 605. 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
49
<PAGE> 56
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.
SECTION 606. 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 each of the Trustee and any predecessor 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 reasonable 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 each of the Trustee and any predecessor
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.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(7) or Section 501(8), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a lien prior to the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of (or premium or Make-Whole Amount, if
any) or interest on particular Securities or any coupons.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
Interests. There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and shall have at all
times a combined capital and surplus of at least $50,000,000. If the Trustee
publishes reports of condition at least annually, pursuant to law or the
requirements of Federal, state, territorial or District of Columbia supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of the Trustee shall be deemed to be its combined capital
and surplus as set forth in its most recent report of
50
<PAGE> 57
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. Neither
the Company nor any Person directly or indirectly controlling, controlled by, or
under common control with the Company shall serve as Trustee.
SECTION 608. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 609.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If an instrument of acceptance by a successor Trustee 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.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of
TIA Section 310(b) after written request therefor by the Company or by any
Holder of a Security 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 607
and shall fail to resign after written request therefor by the Company or
by any Holder of a Security who has been a bona fide Holder of a Security
for at least six months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by or pursuant to a Board Resolution may
remove the Trustee and appoint a successor Trustee with respect to all
Securities, or (ii) subject to TIA Section 315(e), any Holder of a Security 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.
51
<PAGE> 58
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Securities of one or more series, the Company, by or pursuant to
a Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Securities of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series). 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, 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 of Securities
and accepted appointment in the manner hereinafter provided, any Holder of a
Security 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 Securities of such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
in the manner provided for notices to the Holders of Securities 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 609. Acceptance of Appointment by Successor. (a) In case of the
appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder, subject nevertheless to its claim, if any, provided for in
Section 606.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver
52
<PAGE> 59
an indenture supplemental hereto, pursuant to Article Nine hereof, 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.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section 609, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 610. 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 of 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 or coupons 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 or coupons so authenticated with
the same effect as if such successor Trustee had itself authenticated such
53
<PAGE> 60
Securities or coupons. In case any Securities or coupons shall not have been
authenticated by such predecessor Trustee, any such successor Trustee may
authenticate and deliver such Securities or coupons, in either its own name or
that of its predecessor Trustee, with the full force and effect which this
Indenture provides for the certificate of authentication of the Trustee.
SECTION 611. Appointment of Authenticating Agent. At any time when any of
the Securities remain Outstanding, 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 exchange, registration of transfer or partial redemption or
repayment thereof, 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. Any such appointment shall be
evidenced by an instrument in writing signed by a Responsible Officer of the
Trustee, a copy of which instrument shall be promptly furnished to the Company.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a bank or trust company or corporation organized and doing business and in
good standing under the laws of the United States of America or of any state 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 authorities. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or the requirements of the aforesaid 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. In case 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 further act
on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Company. The Trustee for any series of Securities may at any time
terminate the agency of an Authenticating Agent by
54
<PAGE> 61
giving written notice of termination 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 for such series may
appoint a successor Authenticating Agent which shall be acceptable to the
Company and shall give notice of such appointment to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve in the
manner set forth in Section 106. 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 herein. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation including reimbursement of its reasonable expenses for
its services under this Section.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
[_____________________________________]
as Trustee
Dated: ____________ By:____________________________________
as Authenticating Agent
Dated: ____________ By:____________________________________
Authorized Signatory
SECTION 612. Certain Duties and Responsibilities of the Trustee.
(a) With respect to the Securities of any series, except during the
continuance of an Event of Default with respect to the Securities of such
series:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
55
<PAGE> 62
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture; but
in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture, but shall not be
under any duty to verify the contents or accuracy thereof.
(b) In case an Event of Default with respect to the Securities of any
series has occurred and is continuing, the Trustee shall, with respect to
Securities of such series, exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities of any series relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Securities of such series; and
(4) 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.
(d) 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
612.
56
<PAGE> 63
(e) The Trustee shall not be liable for interest on any money or assets
held by it except to the extent the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
ARTICLE SEVEN - HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders. Every Holder of
Securities or coupons, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any
Authenticating Agent nor any Paying Agent nor any Security Registrar shall be
held accountable by reason of the disclosure of any information as to the names
and addresses of the Holders of Securities in accordance with TIA Section 312,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under TIA Section 312(b).
SECTION 702. Reports by Trustee. The Trustee shall transmit to Holders
such reports concerning the Trustee and its actions under this Indenture as may
be required by TIA Section 313 at the times and in the manner provided by the
TIA, which shall initially be not less than every twelve months commencing on
January ___, 1998. A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange, if
any, 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 703. Reports by Company. The Company will:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) which the Company may be required
to file with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Company is not required to
file information, documents or reports pursuant to either of such
Sections, then it will file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information, documents
and reports which may be required pursuant to Section 13 of the Securities
Exchange Act of 1934 in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in
such rules and regulations;
(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the Commission,
such additional information, documents and reports with respect to
compliance by the Company with
57
<PAGE> 64
the conditions and covenants of this Indenture as may be required from
time to time by such rules and regulations; and
(3) transmit by mail to the Holders of Securities, within 30
days after the filing thereof with the Trustee, in the manner and to the
extent provided in TIA Section 313(c), such summaries of any information,
documents and reports required to be filed by the Company pursuant to
paragraphs (1) and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
SECTION 704. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semiannually, not later than 15 days after the Regular Record
Date for interest for each series of Securities, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders of
Registered Securities of such series as of such Regular Record Date, or if there
is no Regular Record Date for interest for such series of Securities,
semiannually, upon such dates as are set forth in the Board Resolution or
indenture supplemental hereto authorizing such series, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished,
provided, however, that, so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
ARTICLE EIGHT - CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Company and Sales, Leases and
Conveyances Permitted Subject to Certain Conditions. The Company may consolidate
with, or sell, lease or convey all or substantially all of its assets to, or
merge with or into any other corporation, provided that in any such case, (1)
either the Company shall be the continuing corporation, or the successor
corporation shall be a corporation organized and existing under the laws of the
United States or a State thereof and such successor corporation shall expressly
assume the due and punctual payment of the principal of (and premium or
Make-Whole Amount, if any) and any interest on all of the Securities, according
to their tenor, and the due and punctual performance and observance of all of
the covenants and conditions of this Indenture to be performed by the Company by
supplemental indenture, complying with Article Nine hereof, satisfactory to the
Trustee, executed and delivered to the Trustee by such corporation and (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 thereof as having been incurred by the Company or such Subsidiary at the
time of such
58
<PAGE> 65
transaction, no Event of Default, and no event which, after notice or the lapse
of time, or both, would become an Event of Default, shall have occurred and be
continuing.
SECTION 802. Rights and Duties of Successor Corporation. In case of any
such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it had
been named herein as the party of the first part, and the predecessor
corporation, except in the event of a lease, shall be relieved of any further
obligation under this Indenture and the Securities. Such successor 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 Securities issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor corporation, instead of the
Company, and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any
Securities which previously shall have been signed and delivered by the officers
of the Company to the Trustee for authentication, and any Securities which such
successor corporation thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Securities had been issued at the date of the execution
hereof.
In case of any such consolidation, merger, sale, lease or conveyance, such
changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
SECTION 803. Officers' Certificate and Opinion of Counsel. Any
consolidation, merger, sale, lease or conveyance permitted under Section 801 is
also subject to the condition that the Trustee receive an Officers' Certificate
and an Opinion of Counsel to the effect that any such consolidation, merger,
sale, lease or conveyance, and the assumption by any successor corporation,
complies with the provisions of this Article and that all conditions precedent
herein provided for relating to such transaction have been complied with.
ARTICLE NINE - SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders. Without
the consent of any Holders of Securities or coupons, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
59
<PAGE> 66
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of the
Company contained 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 for the benefit of
the Holders of all or any series of Securities (and if such Events of
Default are to be for the benefit of less than all series of Securities,
stating that such Events of Default are expressly being included solely
for the benefit of such series); provided, however, that in respect of any
such additional Events of Default such supplemental indenture may provide
for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such default or may limit the
remedies available to the Trustee upon such default or may limit the right
of the Holders of a majority in aggregate principal amount of that or
those series of Securities to which such additional Events of Default
apply to waive such default; or
(4) to add to or change any of the provisions of this
Indenture to provide that Bearer Securities may be registrable as to
principal, to change or eliminate any restrictions on the payment of
principal of or premium or Make-Whole Amount, if any, or interest on
Bearer Securities, to permit Bearer Securities to be issued in exchange
for Registered Securities, to permit Bearer Securities to be issued in
exchange for Bearer Securities of other authorized denominations or to
permit or facilitate the issuance of Securities in uncertificated form,
provided that any such action shall not adversely affect the interests of
the Holders of Securities of any series or any related coupons in any
material respect; or
(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Security Outstanding of any series created
prior to the execution of such supplemental indenture which is entitled to
the benefit of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series
and any related coupons as permitted or contemplated by Sections 201 and
301; or
60
<PAGE> 67
(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; 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 which shall not be inconsistent
with the provisions of this Indenture, provided such provisions shall not
adversely affect the interests of the Holders of Securities of any series
or any related coupons in any material respect; or
(10) to supplement any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the defeasance
and discharge of any series of Securities pursuant to Sections 401, 1402
and 1403; provided that any such action shall not adversely affect the
interests of the Holders of Securities of such series and any related
coupons or any other series of Securities 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 all
Outstanding Securities affected by such supplemental indenture, by Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by or pursuant to a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities and any related coupons 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 premium
or Make-Whole Amount, if any, on) or any installment of principal of or
interest on, any Security; or reduce the principal amount thereof or the
rate or amount of interest thereon, or any premium or Make-Whole Amount
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 the amount thereof provable in bankruptcy pursuant to Section 504,
or adversely affect any right of repayment at the option of the Holder of
any Security, or change any Place of Payment where, or the currency or
currencies, currency unit or units or composite currency or currencies in
which, any Security or any premium or Make-Whole Amount or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption or repayment at the option of the Holder,
on or after the Redemption Date or the Repayment Date, as the case may
be), or
61
<PAGE> 68
(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 with respect to such series (or
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences) provided for in this Indenture, or
reduce the requirements of Section 1504 for quorum or voting, or
(3) modify any of the provisions of this Section, Section 513
or Section 1009, except to increase the required percentage to effect such
action 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 902 and Section 1009, or the deletion of this proviso, in
accordance with the requirements of Sections 609(b) and 901(11).
It shall not be necessary for any Act of Holders under this Section 902 to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
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.
SECTION 903. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and 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 and of any coupon appertaining
thereto shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
62
<PAGE> 69
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 or Make-Whole Amount, if any;
and Interest. The Company covenants and agrees for the benefit of the Holders of
each series of Securities that it will duly and punctually pay the principal of
(and premium or Make-Whole Amount, if any) and interest on the Securities of
that series in accordance with the terms of such series of Securities, any
coupons appertaining thereto and this Indenture. Unless otherwise specified as
contemplated by Section 301 with respect to any series of Securities, any
interest due on Bearer Securities on or before Maturity shall be payable only
upon presentation and surrender of the several coupons for such interest
installments as are evidenced thereby as they severally mature. Unless otherwise
specified with respect to Securities of any series pursuant to Section 301, at
the option of the Company (upon written notice to the Trustee), all payments of
principal may be paid by check to the registered Holder of the Registered
Security or other person entitled thereto against surrender of such Security.
SECTION 1002. Maintenance of Office or Agency. If Securities of a series
are issuable only as Registered Securities, the Company shall 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. If Securities of a
series are issuable as Bearer Securities, the Company will maintain: (A) in the
Borough of Manhattan, The City of New York, an office or agency where any
Registered Securities of that series may be presented or surrendered for
payment, where any Registered Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered for
exchange, where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served and where Bearer
Securities of that series and related coupons may be presented or surrendered
for payment in the circumstances described in the following paragraph (and not
otherwise); (B) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series which is located outside the United States, an
office or agency where Securities of that series and related coupons may be
presented and surrendered for payment; provided, however, that if the Securities
of that series are listed on any stock exchange located outside the United
States and such stock exchange shall so require,
63
<PAGE> 70
the Company will maintain a Paying Agent for the Securities of that series in
any required city located outside the United States, as the case may be, so long
as the Securities of that series are listed on such exchange; and (C) subject to
any laws or regulations applicable thereto, in a Place of Payment for that
series located outside the United States an office or agency where any
Registered Securities of that series may be surrendered for registration of
transfer, where Securities of that series may be surrendered for exchange and
where notices and demands to or upon the Company in respect of the Securities of
that series and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of each such office or agency. If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, except that Bearer
Securities of that series and the related coupons may be presented and
surrendered for payment at the offices specified in the Security, in London,
England, and the Company hereby appoints the same as its agent to receive such
respective presentations, surrenders, notices and demands, and the Company
hereby appoints the Trustee its agent to receive all such presentations,
surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, no payment of principal, premium or Make-Whole Amount or interest
on Bearer Securities shall be made at any office or agency of the Company in the
United States or by check mailed to any address in the United States or by
transfer to an account maintained with a bank located in the United States;
provided, however, that, if the Securities of a series are payable in Dollars,
payment of principal of and any premium or Make-Whole Amount and interest on any
Bearer Security shall be made at the office of the Company's Paying Agent in the
Borough of Manhattan, The City of New York, if (but only if) payment in Dollars
of the full amount of such principal, premium or Make-Whole Amount, or interest,
as the case may be, at all offices or agencies outside the United States
maintained for the purpose by the Company in accordance with this Indenture, is
illegal or effectively precluded by exchange controls or other similar
restrictions.
The Company may 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 of 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 accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency. Unless otherwise specified with respect to
any Securities pursuant to Section 301 with respect to a series of Securities,
the Company hereby designates as a Place of Payment for each series of
Securities, each of (i) the office or agency of the Company in the Borough of
Manhattan, The City of New York, and (ii) the Corporate Trust Office of the
Trustee (as Paying Agent); and the Company hereby initially appoints the Trustee
at its Corporate Trust Office as Paying Agent in such city; and the Company
hereby initially appoints as its agent to
64
<PAGE> 71
receive all such presentations, surrenders, notices and demands each of the
Trustee, at its Corporate Trust Office, and State Street Bank and Trust Company,
N.A. at its offices at 61 Broadway, New York, NY 10005.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, if and so long as the Securities of any series (i) are denominated
in a Foreign Currency or (ii) may be payable in a Foreign Currency, or so long
as it is required under any other provision of the Indenture, then the Company
will maintain with respect to each such series of Securities, or as so required,
at least one exchange rate agent (of which it shall give written notice to the
Trustee).
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 any Securities and any related coupons, it will, on or before each due date
of the principal of (and premium or Make-Whole Amount, if any), or interest on
any of the Securities of that series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum in the currency or currencies,
currency unit or units or composite currency or currencies in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series) sufficient to pay the principal
(and premium or Make-Whole Amount, if any) or interest so becoming due until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided, and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities and any related coupons, it will, on or before each due date of
the principal of (and premium or Make-Whole Amount, if any), or interest on any
Securities of that series, deposit with a Paying Agent a sum (in the currency or
currencies, currency unit or units or composite currency or currencies described
in the preceding paragraph) sufficient to pay the principal (and premium or
Make-Whole Amount, if any) or interest so becoming due, such sum to be held in
trust for the benefit of the Persons entitled to such principal, premium or
Make-Whole Amount, if any, or interest and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will
(1) hold all sums held by it for the payment of principal of
(and premium or Make-Whole Amount, if any) or interest on Securities in
trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities) in the making of any such payment
of principal (and
65
<PAGE> 72
premium or Make-Whole Amount, if any) or interest on the Securities of
that series; and
(3) at any time during the continuance of any such default
upon the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
sums.
Except as otherwise provided in the Securities of any series, and subject
to applicable laws, any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of (and
premium or Make-Whole Amount, if any) or interest on any Security of any series
and remaining unclaimed for two years after such principal (and premium or
Make-Whole Amount, if any) or interest has become due and payable shall be paid
to the Company upon 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 of such
principal of (and premium or Make-Whole Amount, if any) or interest on any
Security, without interest thereon, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; provided, however, that the Trustee
or such Paying Agent, before being required to make any such repayment, may at
the expense of the Company cause to be published once, in an Authorized
Newspaper, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.
SECTION 1004. Existence. Subject to Article Eight, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence, all material rights (by articles of
incorporation, by-laws and statute) and material 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.
SECTION 1005. Maintenance of Properties. The Company will cause all of its
material 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,
66
<PAGE> 73
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 the Company and its Subsidiaries shall not be prevented from
selling or otherwise disposing of their properties for value in the ordinary
course of business.
SECTION 1006. Insurance. The Company will cause each of its and its
Subsidiaries' insurable properties to be insured against loss or damage in an
amount deemed reasonable by the Board of Directors with insurers of recognized
responsibility.
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 it 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. Statement as to Compliance. The Company will deliver to the
Trustee, within 120 days after the end of each fiscal year, a brief certificate
from the principal executive officer, principal financial officer or principal
accounting officer as to his or her knowledge of the Company's compliance with
all conditions and covenants under this Indenture and, in the event of any
noncompliance, specifying such noncompliance and the nature and status thereof.
For purposes of this Section 1008, such compliance shall be determined without
regard to any period of grace or requirement of notice under this Indenture.
SECTION 1009. Waiver of Certain Covenants. The Company may omit in any
particular instance to comply with any term, provision or condition set forth in
Sections 1004 to 1008, inclusive, if before or after the time for such
compliance the Holders of at least a majority in principal amount of all
outstanding Securities of such series, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such 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
67
<PAGE> 74
(except as otherwise specified as contemplated by Section 301 for Securities of
any series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee. The election of the
Company to redeem any Securities shall be evidenced by or pursuant to a Board
Resolution. In case of any redemption at the election of the Company of less
than all of the Securities of any series, the Company shall, at least 45 days
prior to the giving of the notice of redemption in Section 1104 (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed. In the case of any redemption of Securities prior to the expiration of
any restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed. If less
than all the Securities of any series issued on the same day with the same terms
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 issued on such date with the same terms
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.
The Trustee shall promptly notify the Company and the Security Registrar
(if other than itself) in writing of the Securities selected for redemption and,
in the case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Security redeemed or to be redeemed only in part, to the portion of
the principal amount of such Security which has been or is to be redeemed.
SECTION 1104. Notice of Redemption. Notice of redemption shall be given in
the manner provided in Section 106, not less than 30 days nor more than 60 days
prior to the Redemption Date, unless a shorter period is specified by the terms
of such series established pursuant to Section 301, to each Holder of Securities
to be redeemed, but failure to give such notice in the manner herein provided to
the Holder of any Security designated for redemption as a whole or in part, or
any defect in the notice to any such Holder, shall not affect the validity of
the proceedings for the redemption of any other such Security or portion
thereof.
68
<PAGE> 75
Any notice that is mailed to the Holders of Registered Securities in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price, accrued interest to the Redemption
Date payable as provided in Section 1106, if any,
(3) if less than all Outstanding Securities of any series are
to be redeemed, the identification (and, in the case of partial
redemption, the principal amount) of the particular Security or Securities
to be redeemed,
(4) in case any Security is to be redeemed in part only, the
notice which relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the holder will receive,
without a charge, a new Security or Securities of authorized denominations
for the principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price and
accrued interest to the Redemption Date payable as provided in Section
1106, if any, will become due and payable upon each such Security, or the
portion thereof, to be redeemed and, if applicable, that interest thereon
shall cease to accrue on and after said date,
(6) the Place or Places of Payment where such Securities,
together in the case of Bearer Securities with all coupons appertaining
thereto, if any, maturing after the Redemption Date, are to be surrendered
for payment of the Redemption Price and accrued interest, if any,
(7) that the redemption is for a sinking fund, if such is the
case,
(8) that, unless otherwise specified in such notice, Bearer
Securities of any series, if any, surrendered for redemption must be
accompanied by all coupons maturing subsequent to the date fixed for
redemption or the amount of any such missing coupon or coupons will be
deducted from the Redemption Price, unless security or indemnity
satisfactory to the Company, the Trustee for such series and any Paying
Agent is furnished,
(9) if Bearer Securities of any series are to be redeemed and
any Registered Securities of such series are not to be redeemed, and if
such Bearer
69
<PAGE> 76
Securities may be exchanged for Registered Securities not subject to
redemption on this Redemption Date pursuant to Section 305 or otherwise,
the last date, as determined by the Company, on which such exchanges may
be made, and
(10) the CUSIP number of such Security, if any.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price. On or prior to any Redemption
Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, which it may not do in the case
of a sinking fund payment under Article Twelve, segregate and hold in trust as
provided in Section 1003) an amount of money in the currency or currencies,
currency unit or units or composite currency or currencies in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series) sufficient to pay on the
Redemption Date the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities or
portions thereof which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date. Notice of redemption
having been given as aforesaid, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price therein
specified in the currency or currencies, currency unit or units or composite
currency or currencies in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the Securities of
such series) (together with accrued interest, if any, to the Redemption Date),
and from and after such date (unless the Company shall default in the payment of
the Redemption Price and accrued interest) such Securities shall, if the same
were interest-bearing, cease to bear interest and the coupons for such interest
appertaining to any Bearer Securities so to be redeemed, except to the extent
provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, together with all coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest, if
any, to the Redemption Date; provided, however, that installments of interest on
Bearer Securities whose Stated Maturity is on or prior to the Redemption Date
shall be payable only at an office or agency located outside the United States
(except as otherwise provided in Section 1002) and, unless otherwise specified
as contemplated by Section 301, only upon presentation and surrender of coupons
for such interest; and provided further that installments of interest on
Registered Securities whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.
70
<PAGE> 77
If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant coupons maturing after the Redemption Date, such Security may
be paid after deducting from the Redemption Price an amount equal to the face
amount of all such missing coupons, or the surrender of such missing coupon or
coupons may be waived by the Company and the Trustee if there be furnished to
them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall surrender
to the Trustee or any Paying Agent any such missing coupon in respect of which a
deduction shall have been made from the Redemption Price, such Holder shall be
entitled to receive the amount so deducted; provided, however, that interest
represented by coupons shall be payable only at an office or agency located
outside the United States (except as otherwise provided in Section 1002) and,
unless otherwise specified as contemplated by Section 301, only upon
presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium or Make-Whole Amount, if any)
shall, until paid, bear interest from the Redemption Date at the rate borne by
the Security.
SECTION 1107. Securities Redeemed in Part. Any Registered Security which
is to be redeemed only in part (pursuant to the provisions of this Article or of
Article Twelve) 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, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered. If a Global Security is so
surrendered, the Company shall execute and the Trustee shall authenticate and
deliver to the depository, without service charge, a new Global Security in a
denomination equal to and in exchange for the unredeemed portion of the
principal of the Global Security so surrendered.
ARTICLE TWELVE - SINKING FUNDS
SECTION 1201. Applicability of Article. The provisions of this Article
shall be applicable to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 301 for
Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of such Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of any Securities of any
series, the cash amount of any mandatory sinking fund payment
71
<PAGE> 78
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 may, in satisfaction of all or any part of any mandatory sinking fund
payment with respect to the Securities of a series, (1) deliver Outstanding
Securities of such series (other than any previously called for redemption)
together in the case of any Bearer Securities of such series with all unmatured
coupons appertaining thereto and (2) apply as a credit Securities of such 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, as provided for
by the terms of such Securities, or which have otherwise been acquired by the
Company; provided that such Securities so delivered or applied as a credit have
not been previously so credited. Such Securities shall be received and credited
for such purpose by the Trustee at the applicable Redemption Price specified in
such Securities for redemption through operation of the sinking fund and the
amount of such mandatory 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 Securities of any series, the
Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing mandatory sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash in the currency or currencies, currency unit or
units or composite currency or currencies in which the Securities of such series
are payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities of that series pursuant to
Section 1202, and the optional amount, if any, to be added in cash to the next
ensuing mandatory sinking fund payment, and will also deliver to the Trustee any
Securities to be so delivered and credited. If such Officers' Certificate shall
specify an optional amount to be added in cash to the next ensuing mandatory
sinking fund payment, the Company shall thereupon be obligated to pay the amount
therein specified. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 1103 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 1104. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN - REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article. Repayment of Securities of any
series before their Stated Maturity at the option of Holders thereof shall be
made in accordance with
72
<PAGE> 79
the terms of such Securities, if any, and (except as otherwise specified by the
terms of such series established pursuant to Section 301) in accordance with
this Article.
SECTION 1302. Repayment of Securities. Securities of any series subject to
repayment in whole or in part at the option of the Holders thereof will, unless
otherwise provided in the terms of such Securities, be repaid at a price equal
to the principal amount thereof, together with interest, if any, thereon accrued
to the Repayment Date specified in or pursuant to the terms of such Securities.
The Company covenants that on or prior to the Repayment Date it will deposit
with the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an amount
of money in the currency or currencies, currency unit or units or composite
currency or currencies in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the Securities of
such series) sufficient to pay the principal (or, if so provided by the terms of
the Securities of any series, a percentage of the principal) of, and (except if
the Repayment Date shall be an Interest Payment Date) accrued interest on, all
the Securities or portions thereof, as the case may be, to be repaid on such
date.
SECTION 1303. Exercise of Option. Securities of any series subject to
repayment at the option of the Holders thereof will contain an "Option to Elect
Repayment" form on the reverse of such Securities. In order for any Security to
be repaid at the option of the Holder, the Trustee must receive at the Place of
Payment therefor specified in the terms of such Security (or at such other place
or places of which the Company shall from time to time notify the Holders of
such Securities) not earlier than 60 days nor later than 30 days prior to the
Repayment Date (1) the Security so providing for such repayment together with
the "Option to Elect Repayment" form on the reverse thereof duly completed by
the Holder (or by the Holder's attorney duly authorized in writing) or (2) a
telegram, telex, facsimile transmission or a letter from a member of a national
securities exchange, or the National Association of Securities Dealers, Inc.
("NASD"), or a commercial bank or trust company in the United States setting
forth the name of the Holder of the Security, the principal amount of the
Security, the principal amount of the Security to be repaid, the CUSIP number,
if any, or a description of the tenor and terms of the Security, a statement
that the option to elect repayment is being exercised thereby and a guarantee
that the Security to be repaid, together with the duly completed form entitled
"Option to Elect Repayment" on the reverse of the Security, will be received by
the Trustee not later than the fifth Business Day after the date of such
telegram, telex, facsimile transmission or letter; provided, however, that such
telegram, telex, facsimile transmission or letter shall only be effective if
such Security and form duly completed are received by the Trustee by such fifth
Business Day. If less than the entire principal amount of such Security is to be
repaid in accordance with the terms of such Security, the principal amount of
such Security to be repaid, in increments of the minimum denomination for
Securities of such series, and the denomination or denominations of the Security
or Securities to be issued to the Holder for the portion of the principal amount
of such Security surrendered that is not to be repaid, must be specified. The
principal amount of any Security providing for repayment at the option of the
Holder thereof may not be repaid in part
73
<PAGE> 80
if, following such repayment, the unpaid principal amount of such Security would
be less than the minimum authorized denomination of Securities of the series of
which such Security to be repaid is a part. Except as otherwise may be provided
by the terms of any Security providing for repayment at the option of the Holder
thereof, exercise of the repayment option by the Holder shall be irrevocable
unless waived by the Company.
SECTION 1304. When Securities Presented for Repayment Become Due and
Payable. If Securities of any series providing for repayment at the option of
the Holders thereof shall have been surrendered as provided in this Article and
as provided by or pursuant to the terms of such Securities, such Securities or
the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Company on the Repayment Date therein
specified, and on and after such Repayment Date (unless the Company shall
default in the payment of such Securities on such Repayment Date) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
repaid, except to the extent provided below, shall be void. Upon surrender of
any such Security for repayment in accordance with such provisions, together
with all coupons, if any, appertaining thereto maturing after the Repayment
Date, the principal amount of such Security so to be repaid shall be paid by the
Company, together with accrued interest, if any, to the Repayment Date;
provided, however, that coupons whose Stated Maturity is on or prior to the
Repayment Date shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 1002) and, unless
otherwise specified pursuant to Section 301, only upon presentation and
surrender of such coupons; and provided further that, in the case of Registered
Securities, installments of interest, if any, whose Stated Maturity is on or
prior to the Repayment Date shall be payable (but without interest thereon,
unless the Company shall default in the payment thereof) 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 Bearer Security surrendered for repayment shall not be accompanied
by all appurtenant coupons maturing after the Repayment Date, such Security may
be paid after deducting from the amount payable therefor as provided in Section
1302 an amount equal to the face amount of all such missing coupons, or the
surrender of such missing coupon or coupons may be waived by the Company and the
Trustee if there be furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If thereafter the
Holder of such Security shall surrender to the Trustee or any Paying Agent any
such missing coupon in respect of which a deduction shall have been made as
provided in the preceding sentence, such Holder shall be entitled to receive the
amount so deducted; provided, however, that interest represented by coupons
shall be payable only at an office or agency located outside the United States
(except as otherwise provided in Section 1002) and, unless otherwise specified
as contemplated by Section 301, only upon presentation and surrender of those
coupons.
74
<PAGE> 81
If the principal amount of any Security surrendered for repayment shall
not be so repaid upon surrender thereof, such principal amount (together with
interest, if any, thereon accrued to such Repayment Date) shall, until paid,
bear interest from the Repayment Date at the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) set forth in such
Security.
SECTION 1305. Securities Repaid in Part. Upon surrender of any Registered
Security which is to be repaid in part only, the Company shall execute and the
Trustee shall authenticate and deliver to the Holder of such Security, without
service charge and at the expense of the \Company, a new Registered Security or
Securities of the same series, of any authorized denomination specified by the
Holder, in an aggregate principal amount equal to and in exchange for the
portion of the principal of such Security so surrendered which is not to be
repaid.
ARTICLE FOURTEEN - DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article: Company's Option to Effect
Defeasance or Covenant Defeasance. If, pursuant to Section 301, provision is
made for either or both of (a) defeasance of the Securities of or within a
series under Section 1402 or (b) covenant defeasance of the Securities of or
within a series under Section 1403, then the provisions of such Section or
Sections, as the case may be, together with the other provisions of this Article
(with such modifications thereto as may be specified pursuant to Section 301
with respect to any Securities), shall be applicable to such Securities and any
coupons appertaining thereto, and the Company may at its option by Board
Resolution, at any time, with respect to such Securities and any coupons
appertaining thereto, elect to have Section 1402 (if applicable) or Section 1403
(if applicable) be applied to such Outstanding Securities and any coupons
appertaining thereto upon compliance with the conditions set forth below in this
Article.
SECTION 1402. Defeasance and Discharge. Upon the Company's exercise of the
above option applicable to this Section with respect to any Securities of or
within a series, the Company shall be deemed to have been discharged from its
obligations with respect to such Outstanding Securities and any coupons
appertaining thereto on the date the conditions set forth in Section 1404 are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Outstanding Securities and any coupons
appertaining thereto, which shall thereafter be deemed to be "Outstanding" only
for the purposes of Section 1405 and the other Sections of this Indenture
referred to in clauses (A) and (B) below, and to have satisfied all of its other
obligations under such Securities and any coupons appertaining thereto and this
Indenture insofar as such Securities and any coupons appertaining thereto are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of such Outstanding Securities
75
<PAGE> 82
and any coupons appertaining thereto to receive, solely from the trust fund
described in Section 1404 and as more fully set forth in such Section, payments
in respect of the principal of (and premium or Make-Whole Amount, if any) and
interest, if any, on such Securities and any coupons appertaining thereto when
such payments are due, (B) the Company's obligations with respect to such
Securities under Sections 305, 306, 1002 and 1003, and the Company's obligations
under Section 606 hereof (C) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and (D) this Article. Subject to compliance with this
Article Fourteen, the Company may exercise its option under this Section
notwithstanding the prior exercise of its option under Section 1403 with respect
to such Securities and any coupons appertaining thereto.
SECTION 1403. Covenant Defeasance. Upon the Company's exercise of the
above option applicable to this Section with respect to any Securities of or
within a series, the Company shall be released from its obligations under
Sections 1004 to 1009, inclusive, and, if specified pursuant to Section 301, its
obligations under any other covenant contained herein or in any indenture
supplemental hereto, with respect to such Outstanding Securities and any coupons
appertaining thereto on and after the date the conditions set forth in Section
1404 are satisfied (hereinafter, "covenant defeasance"), and such Securities and
any coupons appertaining thereto shall thereafter be deemed to be not
"Outstanding" for the purposes of any direction, waiver, consent or declaration
or Act of Holders (and the consequences of any thereof) in connection with
Sections 1004 to 1009, inclusive, or such other covenant, but shall continue to
be deemed "Outstanding" for all other purposes hereunder. For this purpose, such
covenant defeasance means that, with respect to such Outstanding Securities and
any coupons appertaining thereto, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such Section or such other covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such Section or such other
covenant or by reason of reference in any such Section or such other covenant to
any other provision herein or in any other document and such omission to comply
shall not constitute a default or an Event of Default under Section 501(4) or
501(8) or otherwise, as the case may be, but, except as specified above, the
remainder of this Indenture and such Securities and any coupons appertaining
thereto shall be unaffected thereby.
SECTION 1404. Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to application of Section 1402 or Section 1403
to any Outstanding Securities of or within a series and any coupons appertaining
thereto:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 607 who shall agree to comply with the provisions of this Article
Fourteen applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities and any coupons appertaining
thereto, (1) an amount in such currency, currencies or currency unit in which
such Securities and any coupons appertaining thereto are then specified as
payable at Stated Maturity, or (2)
76
<PAGE> 83
Government Obligations applicable to such Securities and coupons appertaining
thereto (determined on the basis of the currency, currencies or currency unit in
which such Securities and coupons appertaining thereto are then specified as
payable at Stated Maturity) which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than the due date of any payment of principal of (and premium or
Make-Whole Amount, if any) and interest, if any, on such Securities and any
coupons appertaining thereto, money in an amount, or (3) a combination thereof,
in any case, in an amount, sufficient, without consideration of any reinvestment
of such principal and interest, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied by
the Trustee (or other qualifying trustee) to pay and discharge, (i) the
principal of (and premium or Make-Whole Amount, if any) and interest, if any, on
such Outstanding Securities and any coupons appertaining thereto on the Stated
Maturity of such principal or installment of principal or interest and (ii) any
mandatory sinking fund payments or analogous payments applicable to such
Outstanding Securities and any coupons appertaining thereto on the day on which
such payments are due and payable in accordance with the terms of this Indenture
and of such Securities and any coupons appertaining thereto.
(b) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company is a party or by
which it is bound.
(c) No Event of Default or event which with notice or lapse of time
or both would become an Event of Default with respect to such Securities and any
coupons appertaining thereto shall have occurred and be continuing on the date
of such deposit or, insofar as Sections 501(6) and 501(7) are concerned, at any
time during the period ending on the 91st day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied until the
expiration of such period).
(d) In the case of an election under Section 1402, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the Company
has received from, or there has been published by, the Internal Revenue Service
a ruling, or (ii) since the date of execution of this Indenture, there has been
a change in the applicable Federal income tax law, in either case to the effect
that, and based thereon such opinion shall confirm that, the Holders of such
Outstanding Securities and any coupons appertaining thereto will not recognize
income, gain or loss for Federal income tax purposes as a result of such
defeasance and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such defeasance
had not occurred.
(e) In the case of an election under Section 1403, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Outstanding Securities and any coupons appertaining thereto will
not recognize income, gain or loss for Federal income tax purposes as a result
of such covenant defeasance and will be
77
<PAGE> 84
subject to Federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such covenant defeasance had not
occurred.
(f) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 1402 or the covenant defeasance under
Section 1403 (as the case may be) have been complied with and an Opinion of
Counsel to the effect that either (i) as a result of a deposit pursuant to
subsection (a) above and the related exercise of the Company's option under
Section 1402 or Section 1403 (as the case may be), registration is not required
under the Investment Company Act of 1940, as amended, by the Company, with
respect to the trust funds representing such deposit or by the Trustee for such
trust funds or (ii) all necessary registrations under said Act have been
effected.
(g) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be imposed
on the Company in connection therewith pursuant to Section 301.
(h) The payment of amounts payable to the Trustee pursuant to this
Indenture shall be paid or provided for to the reasonable satisfaction of the
Trustee.
SECTION 1405. Deposited Money and Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions. Subject to the provisions of the last
paragraph of Section 1003, all money and Government Obligations (or other
property as may be provided pursuant to Section 301) (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 1405, the "Trustee") pursuant to Section 1404 in
respect of any Outstanding Securities of any series and any coupons appertaining
thereto shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and any coupons appertaining thereto 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 Holders of such Securities and any coupons appertaining
thereto of all sums due and to become due thereon in respect of principal (and
premium or Make-Whole Amount, if any) and interest, but such money need not be
segregated from other funds except to the extent required by law.
Unless otherwise specified with respect to any Security pursuant to
Section 301, if, after a deposit referred to in Section 1404(a) has been made,
(a) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 301 or the terms of such
Security to receive payment in a currency or currency unit other than that in
which the deposit pursuant to Section 1404(a) has been made in respect of such
Security, or (b) a Conversion Event occurs in respect of the currency or
currency unit in which the deposit pursuant to Section 1404(a) has been made,
the indebtedness represented by such Security and any coupons appertaining
thereto shall be deemed to have been, and will be, fully discharged
78
<PAGE> 85
and satisfied through the payment of the principal of (and premium or Make-Whole
Amount, if any), and interest, if any, on such Security as the same becomes due
out of the proceeds yielded by converting (from time to time as specified below
in the case of any such election) the amount or other property deposited in
respect of such Security into the currency or currency unit in which such
Security becomes payable as a result of such election or Conversion Event based
on the applicable market exchange rate for such currency or currency unit in
effect on the second Business Day prior to each payment date, except, with
respect to a Conversion Event, for such currency or currency unit in effect (as
nearly as feasible) at the time of the Conversion Event.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 1404 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of such Outstanding Securities and any coupons
appertaining thereto.
Anything in this Article to the contrary notwithstanding, subject to
Section 606, the Trustee shall deliver or pay to the Company from time to time
upon Company Request any money or Government Obligations (or other property and
any proceeds therefrom) held by it as provided in Section 1404 which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect a defeasance or covenant defeasance, as applicable, in accordance with
this Article.
ARTICLE FIFTEEN - MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called. A meeting of
Holders of Securities of any series may be called at any time and from time to
time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.
SECTION 1502. Call, Notice and Place of Meetings. (a) The Trustee may at
any time call a meeting of Holders of Securities of any series for any purpose
specified in Section 1501, to be held at such time and at such place as the
Trustee shall determine. Notice of every meeting of Holders of Securities of any
series, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be given, in the
manner provided in Section 106, not less than 20 nor more than 180 days prior to
the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution,
or the Holders of at least 25% in principal amount of the Outstanding Securities
of any series shall
79
<PAGE> 86
have requested the Trustee to call a meeting of the Holders of Securities of
such series for any purpose specified in Section 1501, by written request
setting forth in reasonable detail the action proposed to be taken at the
meeting, and the Trustee shall not have made the first publication of the notice
of such meeting within 20 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein, then the
Company or the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the place for such
meeting and may call such meeting for such purposes by giving notice thereof as
provided in subsection (a) of this Section.
SECTION 1503. Persons Entitled to Vote at Meetings. To be entitled to vote
at any meeting of Holders of Securities of any series, a Person shall be (1) a
Holder of one or more Outstanding Securities of such series, or (2) a Person
appointed by an instrument in writing as proxy for a Holder or Holders of one or
more Outstanding Securities of such series by such Holder or Holders. The only
Persons who shall be entitled to be present or to speak at any meeting of
Holders of Securities of any series shall be the Persons entitled to vote at
such meeting and their counsel, any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
SECTION 1504. Quorum; Action. The Persons entitled to vote a majority in
principal amount of the Outstanding Securities of a series shall constitute a
quorum for a meeting of Holders of Securities of such series; provided, however,
that if any action is to be taken at such meeting with respect to a consent or
waiver which this Indenture expressly provides may be given by the Holders of
not less than a specified percentage in principal amount of the Outstanding
Securities of a series, the Persons entitled to vote such specified percentage
in principal amount of the Outstanding Securities of such series shall
constitute a quorum. In the absence of a quorum within 30 minutes after the time
appointed for any such meeting, the meeting shall, if convened at the request of
Holders of Securities of such series, be dissolved. In any other case the
meeting may be adjourned for a period of not less than 10 days as determined by
the chairman of the meeting prior to the adjournment of such meeting. In the
absence of a quorum at the reconvening of any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10
days; at the reconvening of any meeting adjourned or further adjourned for lack
of a quorum, the persons entitled to vote 25% in aggregate principal amount of
the then Outstanding Securities shall constitute a quorum for the taking of any
action set forth in the notice of the original meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided in Section
1502(a), except that such notice need be given only once not less than five days
prior to the date on which the meeting is scheduled to be reconvened.
Except as limited by the proviso to Section 902, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted by the affirmative vote of the persons entitled to
vote a majority in aggregate principal amount of the Outstanding Securities
represented at such meeting; provided, however, that, except as limited by the
proviso to Section 902, any resolution with respect to any request,
80
<PAGE> 87
demand, authorization, direction, notice, consent, waiver or other action which
this Indenture expressly provides may be made, given or taken by the Holders of
a specified percentage, which is less than a majority, in principal amount of
the Outstanding Securities of a series may be adopted at a meeting or an
adjourned meeting duly reconvened and at which a quorum is present as aforesaid
by the affirmative vote of the Holders of such specified percentage in principal
amount of the Outstanding Securities of that series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 1504, if any
action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage in principal amount of all
Outstanding Securities affected thereby, or of the Holders of such series and
one or more additional series:
(i) there shall be no minimum quorum requirement for such
meeting; and
(ii) the principal amount of the Outstanding Securities of
such series that vote in favor of such request, demand, authorization,
direction, notice, consent, waiver or other action shall be taken into
account in determining whether such request, demand, authorization,
direction, notice, consent, waiver or other action has been made, given or
taken under this Indenture.
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of
Meetings. (a) Notwithstanding any provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holding
of Securities shall be proved in the manner specified in Section 104 and the
appointment of any proxy shall be proved in the manner specified in Section 104
or by having the signature of the Person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by Section 104 to
certify to the holding of Bearer Securities. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 104 or other proof.
81
<PAGE> 88
(b) The Trustee shall, by an instrument in writing appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities as provided in Section 1502(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or proxy
shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Securities of such series held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect of any
Security challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1502 at which a quorum is present may be adjourned from time
to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting, and the
meeting may be held as so adjourned without further notice.
SECTION 1506. Counting Votes and Recording Action of Meetings. The vote
upon any resolution submitted to any meeting of Holders of Securities of any
series shall be by written ballots on which shall be subscribed the signatures
of the Holders of Securities of such series or of their representatives by proxy
and the principal amounts and serial numbers of the Outstanding Securities of
such series held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record, at least in duplicate, of the proceedings
of each meeting of Holders of Securities of any Series shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the fact, setting forth a
copy of the notice of the meeting and showing that said notice was given as
provided in Section 1502 and, if applicable, Section 1504. Each copy shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one such copy shall be delivered to the Company and another to
the Trustee to be preserved by the Trustee, the latter to have attached thereto
the ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
82
<PAGE> 89
SIGNATURES AND SEALS
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
BAY APARTMENT COMMUNITIES, INC.
By: /s/ Gilbert M. Meyer
Name: Gilbert M. Meyer
Title: President
Attest: /s/ Jeffrey B. Van Horn
_________________________________
Title: Chief Financial Officer
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: /s/ Robert J. Dunn
Name: Robert J. Dunn
Title: Vice President
Attest: /s/ Paul G. Grenier
_________________________________
Title: Vice President
83
<PAGE> 90
ACKNOWLEDGMENT
STATE OF CALIFORNIA
) ss:
COUNTY OF SANTA CLARA
On the 15th day of January, 1998, before me personally came Gilbert M. Meyer, to
me known, who, being by me duly sworn, did depose and say that he is the
President of BAY APARTMENT COMMUNITIES, INC., one of the parties described in
and which executed the foregoing instrument, and that he signed his name thereto
by authority of the Board of Directors.
[Notarial Seal]
/s/ Anna Maria Kintzer
________________________________
Notary Public
Commission Expires 1/18/98
STATE OF MASSACHUSETTS
) ss:
COUNTY OF SUFFOLK
On the 16th day of January, 1998, before me personally came Robert J. Dunn, to
me known, who, being by me duly sworn, did depose and say that he is a Vice
President of STATE STREET BANK AND TRUST COMPANY, one of the parties described
in and which executed the foregoing instrument, and that he signed his name
thereto by authority of the Board of Directors.
[Notarial Seal]
/s/ Eugenia B. Bettencourt
________________________________
Notary Public
Commission Expires 8/18/00
84
<PAGE> 91
EXHIBIT A
FORM OF REDEEMABLE OR NON-REDEEMABLE SENIOR SECURITY
[Face of Security]
[If the Holder of this Security (as indicated below) is The Depository Trust
Company ("DTC") or a nominee of DTC, this Security is a Global Security and the
following two legends apply:
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC"), 55 WATER STREET, NEW YORK, NEW YORK TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND SUCH
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL THIS SECURITY IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES
IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
DTC TO A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF
DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH
SUCCESSOR.]
[If this Security is an Original Issue Discount Security, insert -- FOR PURPOSES
OF SECTION 1273 and 1275 OF THE UNITED STATES INTERNAL REVENUE CODE, THE AMOUNT
OF ORIGINAL ISSUE DISCOUNT ON THIS SECURITY IS ___% OF ITS PRINCIPAL AMOUNT, THE
ISSUE DATE IS _______, 19__ [AND] THE YIELD TO MATURITY IS ___%. [THE METHOD
USED TO DETERMINE THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE SHORT
ACCRUAL PERIOD OF _______, 19__ TO _________, 19__, IS ___% OF THE PRINCIPAL
AMOUNT OF THIS SECURITY.]
BAY APARTMENT COMMUNITIES, INC.
[Designation of Series]
No. _______ $_______
BAY APARTMENT COMMUNITIES, INC., a Maryland corporation (herein referred to as
the "Company," which term includes any successor corporation under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
to ______________________________ or registered assigns the principal sum of
_______ Dollars on _____________________ (the "Stated Maturity Date") [or insert
date fixed for
A-1
<PAGE> 92
earlier redemption (the "Redemption Date," and together with the Stated Maturity
Date with respect to principal repayable on such date, the "Maturity Date.")]
[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 (each, an "Interest Payment Date"),
commencing __________, at the rate of __% per annum, until the principal hereof
is paid or duly provided for. 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 Holder in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the ________ or ______ (whether or
not a Business Day), as the case may be, next preceding such Interest Payment
Date [at the office or agency of the Company maintained for such purpose;
provided, however, that such interest may be paid, at the Company's option, by
mailing a check to such Holder at its registered address or by transfer of funds
to an account maintained by such Holder within the United States]. Any such
interest not so punctually paid or duly provided for shall forthwith cease to be
payable to the Holder on such Regular Record Date, and may be paid to the Holder
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 may 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 the Indenture. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.]
[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 the
[Stated] Maturity Date and in such case the overdue principal of this Security
shall bear interest at the rate of ___% per annum (to the extent that the
payment of such interest shall be legally enforceable), which shall accrue from
the date of such default in payment to the date payment of such principal has
been made or duly provided for. Interest on any overdue principal shall be
payable on demand. Any such interest on any overdue principal that is not so
paid on demand shall bear interest at the rate of ___% per annum (to the extent
that the payment of such interest shall be legally enforceable), which shall
accrue from the date of such demand for payment to the date payment of such
interest has been made or duly provided for, and such interest shall also be
payable on demand.]
The principal of this Security payable on the Stated Maturity Date [or the
principal of, premium or Make-Whole Amount, if any, and, if the Redemption Date
is not an Interest Payment Date, interest on this Security payable on the
Redemption Date] will be paid against presentation of this Security at the
office or agency of the Company maintained for that
A-2
<PAGE> 93
purpose in ___________________, in such coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and
private debts.
Interest payable on this Security on any Interest Payment Date and on the
[Stated] Maturity Date [or Redemption Date, as the case may be,] will include
interest accrued from and including the next preceding Interest Payment Date in
respect of which interest has been paid or duly provided for (or from and
including ____________, if no interest has been paid on this Security) to but
excluding such Interest Payment Date or the [Stated] Maturity Date [or
Redemption Date, as the case may be.] If any Interest Payment Date or the
[Stated] Maturity Date or [Redemption Date] falls on a day that is not a
Business Day, as defined below, principal, premium or Make-Whole Amount, if any,
and/or interest payable with respect to such Interest Payment Date or [Stated]
Maturity Date [or Redemption Date, as the case may be,] will be paid on the next
succeeding Business Day with the same force and effect as if it were paid on the
date such payment was due, and no interest shall accrue on the amount so payable
for the period from and after such Interest Payment Date or [Stated] Maturity
Date [or Redemption Date, as the case may be.] "Business Day" means any day,
other than a Saturday or Sunday, on which banks in __________________ are not
required or authorized by law or executive order to close.
[If this Security is a Global Security, insert -- All payments of principal,
premium or Make-Whole Amount, if any, and interest in respect of this Security
will be made by the Company in immediately available funds.]
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
by manual signature of one of its authorized signatories, 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 facsimile corporate seal.
Dated:________________ BAY APARTMENT COMMUNITIES, INC.
By:_________________________________
Attest:
______________________
Secretary
A-3
<PAGE> 94
[Reverse of Security]
BAY APARTMENT COMMUNITIES, INC.
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 with respect to the series of which this Security is a part), 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 duly authorized series of Securities
designated on the face hereof (collectively, the "Securities"), [if applicable,
insert -- and the aggregate principal amount of the Securities to be issued
under such series is limited to $______ (except for Securities authenticated and
delivered upon transfer of, or in exchange for, or in lieu of other
Securities).] All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
If an Event of Default, as defined in the Indenture, 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 applicable, insert -- The Securities may not be redeemed prior to the Stated
Maturity Date.]
[If applicable, insert -- The Securities are subject to redemption [ (l) (If
applicable, insert -- 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) ] [If
applicable, insert -- at any time [on or after ___________], 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 on or before _______, __% and if redeemed during the 12-month
period beginning _______ of the years indicated at the Redemption Prices
indicated below.
Year Redemption Price Year Redemption Price
A-4
<PAGE> 95
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; provided, however, that installments of interest on this
Security whose Stated Maturity is on or prior to such Redemption Date will be
payable to the Holder of this Security, 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 are subject to redemption (1) on
_______ in any year commencing with the year ____ and ending with the year ____
through operation of the sinking fund for this series at the Redemption Prices
for redemption through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below, and (2) at any time [on
or after _______], as a whole or in part, at the election of the Company, at the
Redemption Prices for redemption otherwise than through operation of the sinking
fund (expressed as percentages of the principal amount) set forth in the table
below: If redeemed during the 12-month period beginning ________ of the years
indicated,
Redemption Price for Redemption Price for
Redemption Through Redemption Otherwise
Operation of the Than Through Operation
Year Sinking Fund of the Sinking Fund
---- ------------ -------------------
and thereafter at a Redemption Price equal to ____% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date;
provided, however, that installments of interest on this Security whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holder of
this Security, 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 as contemplated by [Clause (2) of]
the preceding paragraph as a part of, or in anticipation of, any refunding
operation by the application, directly or indirectly, of moneys borrowed having
an interest cost to the Company (calculated in accordance with generally
accepted financial practice) of less than __% per annum.]
[If applicable, insert -- The sinking fund for the Securities provides for
the redemption on _______ in each year, beginning with the year ____ and ending
with the year ____, of [not less than] $_______] [("mandatory sinking fund") and
not more than $_______] aggregate principal amount of the Securities. [The
Securities acquired or redeemed by the Company otherwise than through
[mandatory] sinking fund payments may be credited against subsequent
A-5
<PAGE> 96
[mandatory] sinking fund payments otherwise required to be made in the [describe
order] order in which they become due.]]
Notice of redemption will be given by mail to Holders of Securities, not
less than 30 nor more than 60 days prior to the Redemption Date, all as provided
in the Indenture.
In the event of redemption of this Security in part only, a new Security
or Securities for the unredeemed portion hereof shall be issued in the name of
the Holder hereof upon the cancellation hereof.
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 under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority of the aggregate principal amount of all Securities issued
under the Indenture at the time Outstanding and affected thereby. The Indenture
also contains provisions permitting the Holders of not less than a majority of
the aggregate principal amount of the Outstanding Securities, on behalf of the
Holders of all such Securities, to waive compliance by the Company with certain
provisions of the Indenture. Furthermore, provisions in the Indenture permit the
Holders of not less than a majority of the aggregate principal amount, in
certain instances, of the Outstanding Securities of any series to waive, on
behalf of all of the Holders of Securities of such series, 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 other Securities issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium or Make-Whole
Amount, if any) and interest on this Security at the times, places and rate, and
in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
[and herein] set forth, the transfer of this Security is registrable in the
Security Register of the Company 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 premium or Make-Whole Amount, if any) 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 by his attorney duly authorized
in writing, and thereupon one or more new Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
A-6
<PAGE> 97
As provided in the Indenture and subject to certain limitations therein
[and herein] set forth, this Security is exchangeable for a like aggregate
principal amount of Securities of different authorized denominations but
otherwise having the same terms and conditions, as requested by the Holder
hereof surrendering the same.
The Securities of this series are issuable only in registered form
[without coupons] in denominations of $_______ and any integral multiple
thereof.
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.
No recourse shall be had for the payment of the principal of or premium or
Make-Whole Amount, if any, or the interest on this Security, or for any claim
based hereon, or otherwise in respect hereof, or based on or in respect of the
Indenture or any indenture supplemental thereto, against any past, present or
future stockholder, employee, officer or director, as such, of the Company or of
any successor, either directly or through the Company or any successor, whether
by virtue of any constitution, statute or rule of law or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
The Indenture and the Securities shall be governed by and construed in
accordance with the laws of [the State of New York] applicable to agreements
made and to be performed entirely in such State.
A-7
<PAGE> 98
EXHIBIT B
FORMS OF CERTIFICATION
EXHIBIT B-1
FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, as of the date hereof, and except as set forth
below, the above-captioned Securities held by you for our account (i) are owned
by person(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States Federal income taxation regardless of its source
("United States person(s)"), (ii) are owned by United States person(s) that are
(a) foreign branches of United States financial institutions (financial
institutions, as defined in United States Treasury Regulations Section
2.165-12(c)(1)(v) are herein referred to as "financial institutions") purchasing
for their own account or for resale, or (b) United States person(s) who acquired
the Securities through foreign branches of United States financial institutions
and who hold the Securities through such United States financial institutions on
the date hereof (and in either case (a) or (b), each such United States
financial institution hereby agrees, on its own behalf or through its agent,
that you may advise Bay Apartment Communities, Inc. or its agent that such
financial institution will comply with the requirements of Section 165(j)(3)(A),
(B) or (C) of the United States Internal Revenue Code of 1986, as amended, and
the regulations thereunder), or (iii) are owned by United States or foreign
financial institution(s) for purposes of resale during the restricted period (as
defined in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)),
and, in addition, if the owner is a United States or foreign financial
institution described in clause (iii) above (whether or not also described in
clause (i) or (ii)), this is to further certify that such financial institution
has not acquired the Securities for purposes of resale directly or indirectly to
a United States person or to a person within the United States or its
possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
B-1
<PAGE> 99
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the
above-captioned Securities held by you for our account in accordance with your
Operating Procedures if any applicable statement herein is not correct on such
date, and in the absence of any such notification it may be assumed that this
certification applies as of such date.
This certificate excepts and does not relate to [U.S.$] of such interest
in the above-captioned Securities in respect of which we are not able to certify
and as to which we understand an exchange for an interest in a permanent Global
Security or an exchange for and delivery of definitive Securities (or, if
relevant, collection of any interest) cannot be made until we do so certify.
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: ________, ____
[To be dated no earlier than the 15th day prior to (i) the Exchange Date or (ii)
the relevant Interest Payment Date occurring prior to the Exchange Date, as
applicable]
[Name of Person Making Certification]
____________________________________
(Authorized Signature)
Name:
Title:
B-2
<PAGE> 100
EXHIBIT B-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO
OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, based solely on written certifications that we
have received in writing, by tested telex or by electronic transmission from
each of the persons appearing in our records as persons entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
in the form attached hereto, as of the date hereof, [U.S.$] principal amount of
the above-captioned Securities (i) is owned by person(s) that are not citizens
or residents of the United States, domestic partnerships, domestic corporations
or any estate or trust the income of which is subject to United States Federal
income taxation regardless of its source ("United States person(s)"), (ii) is
owned by United States person(s) that are (a) foreign branches of United States
financial institutions (financial institutions, as defined in U.S. Treasury
Regulations Section 1.165-12(c)(1)(v) are herein referred to as "financial
institutions") purchasing for their own account or for resale, or (b) United
States person(s) who acquired the Securities through foreign branches of United
States financial institutions and who hold the Securities through such United
States financial institutions on the date hereof (and in either case (a) or (b),
each such financial institution has agreed, on its own behalf or through its
agent, that we may advise Bay Apartment Communities, Inc. or its agent that such
financial institution 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), or (iii) is owned by United States or foreign financial
institution(s) for purposes of resale during the restricted period (as defined
in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and, to
the further effect, that financial institutions described in clause (iii) above
(whether or not also described in clause (i) or (ii)) have certified that they
have not acquired the Securities for purposes of resale directly or indirectly
to a United States person or to a person within the United States or its
possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "Possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any portion of the
temporary Global Security representing the above-captioned Securities excepted
in the above-referenced certificates of Member
B-3
<PAGE> 101
Organizations and (ii) as of the date hereof we have not received any
notification from any of our Member Organizations to the effect that the
statements made by such Member Organizations with respect to any portion of the
part submitted herewith for exchange (or, if relevant, collection of any
interest) are no longer true and cannot be relied upon as of the date hereof.
We understand that this certification is required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: _______ ____
[To be dated no earlier than the Exchange Date or the relevant Interest Payment
Date occurring prior to the Exchange Date, as applicable]
[Morgan Guaranty Trust Company of New York,
Brussels Office,] as Operator of the Euroclear
System [CEDEL S.A.]
By:___________________________________________
B-4
<PAGE> 1
EXHIBIT 4.2
------------------------------------------------------------------------------
BAY APARTMENT COMMUNITIES, INC.
Issuer
to
STATE STREET BANK AND TRUST COMPANY
Trustee
-------------------------
First Supplemental Indenture
Dated as of January 20, 1998
-------------------------
$50,000,000
of
6.250% Senior Notes due 2003
$50,000,000
of
6.500% Senior Notes due 2005
$50,000,000
of
6.625% Senior Notes due 2008
------------------------------------------------------------------------------
<PAGE> 2
FIRST SUPPLEMENTAL INDENTURE, dated as of January 20, 1998 (the
"Supplemental Indenture"), between BAY APARTMENT COMMUNITIES, INC., a
corporation duly organized and existing under the laws of the State of Maryland
(herein called the "Company"), and STATE STREET BANK AND TRUST COMPANY, a trust
company organized and existing under the laws of The Commonwealth of
Massachusetts, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has heretofore delivered to the Trustee an Indenture dated as
of January 16, 1998 (the "Senior Indenture"), a form of which has been filed
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, as an exhibit to the Company's Registration Statement on Form S-3, as
amended (File No. 333-41511), providing for the issuance from time to time of
Senior Debt Securities of the Company (the "Securities").
Section 301 of the Senior Indenture provides for various matters with
respect to any series of Securities issued under the Senior Indenture to be
established in an indenture supplemental to the Senior Indenture.
Section 901(7) of the Senior Indenture provides for the Company and the
Trustee to enter into an indenture supplemental to the Senior Indenture to
establish the form or terms of Securities of any series as provided by Sections
201 and 301 of the Senior Indenture.
The Board of Directors of the Company has duly adopted resolutions
authorizing the Company to execute and deliver this Supplemental Indenture.
All the conditions and requirements necessary to make this Supplemental
Indenture, when duly executed and delivered, a valid and binding agreement in
accordance with its terms and for the purposes herein expressed, have been
performed and fulfilled.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of each of the
series of Securities provided for herein by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders of
the Notes or for either thereof, as follows:
ARTICLE ONE - RELATION TO SENIOR INDENTURE; DEFINITIONS.
SECTION 1.1. Relation to Senior Indenture. This Supplemental Indenture
constitutes an integral part of the Senior Indenture.
2
<PAGE> 3
SECTION 1.2. Definitions. For all purposes of this Supplemental Indenture,
except as otherwise expressly provided for or unless the context otherwise
requires:
(1) Capitalized terms used but not defined herein shall have the
respective meanings assigned to them in the Senior Indenture;
(2) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this Supplemental
Indenture; and
(3) In the event that any of the following definitions differs from
its respective definition set forth in the Senior Indenture, the definition set
forth herein shall control.
"Acquired Indebtedness" means Indebtedness of a Person (i) existing
at the time such Person becomes a Subsidiary or (ii) assumed in connection with
the acquisition of assets from such Person, in each case, other than
Indebtedness incurred in connection with, or in contemplation of, such Person
becoming a Subsidiary or such acquisition. Acquired Indebtedness shall be deemed
to be incurred on the date of the related acquisition of assets from any Person
or the date the acquired Person becomes a Subsidiary.
"Annual Service Charge" for any period means the maximum amount
which is payable during such period for interest on, and original issue discount
of, Indebtedness of the Company and its Subsidiaries and the amount of dividends
which are payable during such period in respect of any Disqualified Stock.
"Business Day" means any day, other than a Saturday or Sunday, that
is neither a legal holiday nor a day on which banking institutions in the City
of New York or in the City of Chicago are authorized or required by law,
regulation or executive order to close.
"Capital Stock" means, with respect to any Person, any capital stock
(including preferred stock), shares, interests, participations or other
ownership interests (however designated) of such Person and any rights (other
than debt securities convertible into or exchangeable for corporate stock),
warrants or options to purchase any thereof.
"Consolidated Income Available for Debt Service" for any period
means Earnings from Operations of the Company and its Subsidiaries, plus amounts
which have been deducted, and minus amounts which have been added, for the
following (without duplication): (i) interest on Indebtedness of the Company and
its Subsidiaries, (ii) provision for taxes of the Company and its Subsidiaries
based on income, (iii) amortization of debt discount and other deferred
financing costs, (iv) provisions for gains and losses on properties and property
depreciation and amortization, (v) the effect of any noncash charge resulting
from a change in accounting principles in determining Earnings from Operations
for such period and (vi) amortization of deferred charges.
3
<PAGE> 4
"Corporate Trust Office" means the office of the Trustee at which,
at any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at Two International
Place, Boston, Massachusetts 02110 and, for purposes of the Place of Payment
provisions of Sections 305 and 1002 of the Senior Indenture, is located at the
office of State Street Bank and Trust Company, N.A., 61 Broadway, New York, New
York 10005.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which by the terms of such Capital Stock (or by the terms
of any security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (i) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise
(other than Capital Stock which is redeemable solely in exchange for common
stock), (ii) is convertible into or exchangeable or exercisable for Indebtedness
or Disqualified Stock or (iii) is redeemable at the option of the holder
thereof, in whole or in part (other than Capital Stock which is redeemable
solely in exchange for Capital Stock which is not Disqualified Stock), in each
case on or prior to the Stated Maturity of the Notes.
"Earnings from Operations" for any period means net earnings
excluding gains and losses on sales of investments, extraordinary items, and
property valuation losses, net as reflected in the financial statements of the
Company and its Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP.
"Encumbrance" means any mortgage, lien, charge, pledge or security
interest of any kind.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder by the Commission.
"GAAP" means generally accepted accounting principles as used in the
United States applied on a consistent basis as in effect from time to time;
provided that solely for purposes of any calculation required by the financial
covenants contained herein, "GAAP" shall mean generally accepted accounting
principles as used in the United States on the date hereof, applied on a
consistent basis.
"Indebtedness" of the Company or any Subsidiary means, without
duplication, any indebtedness of the Company or any Subsidiary, whether or not
contingent, in respect of (i) borrowed money or evidenced by bonds, notes,
debentures or similar instruments, (ii) indebtedness for borrowed money secured
by any Encumbrance existing on property owned by the Company or any Subsidiary,
(iii) the reimbursement obligations, contingent or otherwise, in connection with
any letters of credit actually issued (other than letters of credit issued to
provide credit enhancement or support with respect to other indebtedness of the
Company or any Subsidiary otherwise reflected as Indebtedness hereunder) or
amounts representing the balance deferred and unpaid of the purchase price of
any property or services, except any such
4
<PAGE> 5
balance that constitutes an accrued expense or trade payable, or all conditional
sale obligations or obligations under any title retention agreement, (iv) the
principal amount of all obligations of the Company or any Subsidiary with
respect to redemption, repayment or other repurchase of any Disqualified Stock,
(v) any lease of property by the Company or any Subsidiary as lessee which is
reflected on the Company's consolidated balance sheet as a capitalized lease in
accordance with GAAP, or (vi) interest rate swaps, caps or similar agreements
and foreign exchange contracts, currency swaps or similar agreements, to the
extent, in the case of items of indebtedness under (i) through (iii) above, that
any such items (other than letters of credit) would appear as a liability on the
Company's consolidated balance sheet in accordance with GAAP, and also includes,
to the extent not otherwise included, any obligation by the Company or any
Subsidiary to be liable for, or to pay, as obligor, guarantor or otherwise
(other than for purposes of collection in the ordinary course of business),
Indebtedness of another Person (other than the Company or any Subsidiary) (it
being understood that Indebtedness shall be deemed to be incurred by the Company
or any Subsidiary whenever the Company or such Subsidiary shall create, assume,
guarantee or otherwise become liable in respect thereof).
"Make-Whole Amount" means, in connection with any optional
redemption or accelerated payment of any 2003 Note, 2005 Note or 2008 Note, as
the case may be, the excess, if any, of (i) the aggregate present value as of
the date of such redemption or accelerated payment of each dollar of principal
being redeemed or paid and the amount of interest (exclusive of interest accrued
to the date of redemption or accelerated payment) that would have been payable
in respect of such dollar if such redemption or accelerated payment had not been
made, determined by discounting, on a semi-annual basis, such principal and
interest at the Reinvestment Rate (determined on the third Business Day
preceding the date such notice of Redemption is given or declaration of
acceleration is made) from the respective dates on which such principal and
interest would have been payable if such redemption or accelerated payment had
not been made, over (ii) the aggregate principal amount of the Notes being
redeemed or paid.
"Notes" has the meaning specified in Section 2.1 hereof.
"Reinvestment Rate" means .25% (twenty-five one hundredths of one
percent) plus the arithmetic mean of the yields under the respective headings
"This Week" and "Last Week" published in the Statistical Release under the
caption "Treasury Constant Maturities" for the maturity (rounded to the nearest
month) corresponding to the remaining life to maturity, as of the payment date
of the principal being redeemed or paid. If no maturity exactly corresponds to
such maturity, yields for the two published maturities most closely
corresponding to such maturity shall be calculated pursuant to the immediately
preceding sentence and the Reinvestment Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding in each of such
relevant periods to the nearest month. For such purposes of calculating the
Reinvestment Rate, the most recent Statistical Release published prior to the
date of determination of the Make-Whole Amount shall be used.
5
<PAGE> 6
"Statistical Release" means the statistical release designated
"H.15(519)" or any successor publication which is published weekly by the
Federal Reserve System and which establishes yields on actively traded United
States government securities adjusted to constant maturities or, if such
statistical release is not published at the time of any determination of the
Make-Whole Amount, then such other reasonably comparable index which shall be
designated by the Company.
"Subsidiary" means, with respect to any Person, any corporation,
limited liability company, partnership or other entity of which a majority of
(i) the voting power of the voting equity securities or (ii) the outstanding
equity interests are owned, directly or indirectly, by such Person. For the
purposes of this definition, "voting equity securities" means equity securities
having voting power for the election of directors, whether at all times or only
so long as no senior class of security has such voting power by reason of any
contingency.
"Total Assets" as of any date means the sum of (i) the Undepreciated
Real Estate Assets and (ii) all other assets of the Company and its Subsidiaries
determined in accordance with GAAP (but excluding accounts receivable and
intangibles).
"Total Unencumbered Assets" means the sum of (i) those Undepreciated
Real Estate Assets not subject to an Encumbrance for borrowed money and (ii) all
other assets of the Company and its Subsidiaries not subject to an Encumbrance
for borrowed money, determined in accordance with GAAP (but excluding accounts
receivable and intangibles).
"2003 Notes" has the meaning specified in Section 2.1 hereof.
"2005 Notes" has the meaning specified in Section 2.1 hereof.
"2008 Notes" has the meaning specified in Section 2.1 hereof.
"Undepreciated Real Estate Assets" as of any date means the cost
(original cost plus capital improvements) of real estate assets of the Company
and its Subsidiaries on such date, before depreciation and amortization,
determined on a consolidated basis in accordance with GAAP.
"Unsecured Indebtedness" means Indebtedness which is not secured by
any Encumbrance upon any of the properties of the Company or any Subsidiary.
6
<PAGE> 7
ARTICLE TWO - THE SERIES OF NOTES.
The following provisions of this Article Two are made pursuant to Section
301 of the Senior Indenture in order to establish and set forth the terms of the
series of Securities described in Section 2.1.
SECTION 2.1. Title of the Securities. There shall be a series of
Securities designated the "6.250% Senior Notes due 2003" (the "2003 Notes"), a
series of Securities designated the "6.500% Senior Notes due 2005" (the "2005
Notes") and a series of Securities designated the "6.625% Senior Notes due 2008"
(the "2008 Notes" and, together with the 2003 Notes and the 2005 Notes, the
"Notes").
SECTION 2.2. Limitation on Aggregate Principal Amount.
(1) The aggregate principal amount of the 2003 Notes shall be limited to
$50,000,000, and, except as provided in this Section and in Section 306 of the
Senior Indenture, the Company shall not execute and the Trustee shall not
authenticate or deliver 2003 Notes in excess of such aggregate principal amount.
(2) The aggregate principal amount of the 2005 Notes shall be limited to
$50,000,000, and, except as provided in this Section and in Section 306 of the
Senior Indenture, the Company shall not execute and the Trustee shall not
authenticate or deliver 2005 Notes in excess of such aggregate principal amount.
(3) The aggregate principal amount of the 2008 Notes shall be limited to
$50,000,000, and, except as provided in this Section and in Section 306 of the
Senior Indenture, the Company shall not execute and the Trustee shall not
authenticate or deliver 2008 Notes in excess of such aggregate principal amount.
Nothing contained in this Section 2.2 or elsewhere in this Supplemental
Indenture, or in the Notes, is intended to or shall limit execution by the
Company or authentication or delivery by the Trustee of Notes under the
circumstances contemplated by Sections 303, 304, 305, 306, 906, 1107 and 1305 of
the Senior Indenture.
SECTION 2.3. Interest and Interest Rates; Maturity Date of Notes. The 2003
Notes will bear interest at a rate of 6.250% per annum, the 2005 Notes will bear
interest at a rate of 6.500% per annum and the 2008 Notes will bear interest at
a rate of 6.625% per annum, in each case, from January 15, 1998 or from the
immediately preceding Interest Payment Date to which interest has been paid or
duly provided for, payable semi-annually in arrears on January 15 and July 15 of
each year, commencing July 15, 1998 (each, an "Interest Payment Date"), to the
Person in whose name such Note is registered at the close of business on
December 31 or June 30 (whether or not a Business Day), as the case may be, next
7
<PAGE> 8
preceding such Interest Payment Date (each, a "Regular Record Date"). Interest
will be computed on the basis of a 360-day year comprised of twelve 30-day
months. The interest so payable on any Note which is not punctually paid or duly
provided for on any Interest Payment Date shall forthwith cease to be payable to
the Person in whose name such Note is registered on the relevant Regular Record
Date, and such defaulted interest shall instead be payable to the Person in
whose name such Note is registered on the Special Record Date or other specified
date determined in accordance with the Senior Indenture.
If any Interest Payment Date or Maturity falls on a day that is not a
Business Day, the required payment shall be made on the next Business Day as if
it were made on the date such payment was due and no interest shall accrue on
the amount so payable for the period from and after such Interest Payment Date
or Maturity, as the case may be.
The 2003 Notes will mature on January 15, 2003, the 2005 Notes will mature
on January 15, 2005 and the 2008 Notes will mature on January 15, 2008.
SECTION 2.4. Limitations on Incurrence of Indebtedness.
(1) The Company will not, and will not permit any Subsidiary to,
incur any Indebtedness if, immediately after giving effect to the incurrence of
such additional Indebtedness and the application of the proceeds thereof, the
aggregate principal amount of all outstanding Indebtedness of the Company and
its Subsidiaries on a consolidated basis determined in accordance with GAAP is
greater than 60% of the sum of (without duplication) (i) the Total Assets of the
Company and its Subsidiaries as of the end of the calendar quarter covered in
the Company's Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as
the case may be, most recently filed with the Commission (or, if such filing is
not permitted under the Exchange Act, with the Trustee) prior to the incurrence
of such additional Indebtedness and (ii) the purchase price of any real estate
assets or mortgages receivable acquired, and the amount of any securities
offering proceeds received (to the extent that such proceeds were not used to
acquire real estate assets or mortgages receivable or used to reduce
Indebtedness), by the Company or any Subsidiary since the end of such calendar
quarter, including those proceeds obtained in connection with the incurrence of
such additional Indebtedness.
(2) In addition to the limitation set forth in subsection (1) of
this Section 2.4, the Company will not, and will not permit any Subsidiary to,
incur any Indebtedness if the ratio of Consolidated Income Available for Debt
Service to the Annual Service Charge for the four consecutive fiscal quarters
most recently ended prior to the date on which such additional Indebtedness is
to be incurred shall have been less than 1.5:1, on a pro forma basis after
giving effect thereto and to the application of the proceeds therefrom, and
calculated on the assumption that (i) such Indebtedness and any other
Indebtedness incurred by the Company and its Subsidiaries since the first day of
such four-quarter period and the application of the proceeds therefrom,
including to refinance other Indebtedness, had occurred at the beginning
8
<PAGE> 9
of such period; (ii) the repayment or retirement of any other Indebtedness by
the Company and its Subsidiaries since the first day of such four-quarter period
had been repaid or retired at the beginning of such period (except that, in
making such computation, the amount of Indebtedness under any revolving credit
facility shall be computed based upon the average daily balance of such
Indebtedness during such period); (iii) in the case of Acquired Indebtedness or
Indebtedness incurred in connection with any acquisition since the first day of
such four-quarter period, the related acquisition had occurred as of the first
day of such period with the appropriate adjustments with respect to such
acquisition being included in such pro forma calculation; and (iv) in the case
of any acquisition or disposition by the Company or its Subsidiaries of any
asset or group of assets since the first day of such four-quarter period,
whether by merger, stock purchase or sale, or asset purchase or sale, such
acquisition or disposition or any related repayment of Indebtedness had occurred
as of the first day of such period with the appropriate adjustments with respect
to such acquisition or disposition being included in such pro forma calculation.
(3) In addition to the limitations set forth in subsections (1) and
(2) of this Section 2.4, the Company will not, and will not permit any
Subsidiary to, incur any Indebtedness secured by any Encumbrance upon any of the
property of the Company or any Subsidiary if, immediately after giving effect to
the incurrence of such additional Indebtedness and the application of the
proceeds thereof, the aggregate principal amount of all outstanding Indebtedness
of the Company and its Subsidiaries on a consolidated basis which is secured by
any Encumbrance on property of the Company or any Subsidiary is greater than 40%
of the sum of (without duplication) (i) the Total Assets of the Company and its
Subsidiaries as of the end of the calendar quarter covered in the Company's
Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be,
most recently filed with the Commission (or, if such filing is not permitted
under the Exchange Act, with the Trustee) prior to the incurrence of such
additional Indebtedness and (ii) the purchase price of any real estate assets or
mortgages receivable acquired, and the amount of any securities offering
proceeds received (to the extent that such proceeds were not used to acquire
real estate assets or mortgages receivable or used to reduce Indebtedness), by
the Company or any Subsidiary since the end of such calendar quarter, including
those proceeds obtained in connection with the incurrence of such additional
Indebtedness.
(4) The Company and its Subsidiaries may not at any time own Total
Unencumbered Assets equal to less than 150% of the aggregate outstanding
principal amount of the Unsecured Indebtedness of the Company and its
Subsidiaries on a consolidated basis.
(5) For purposes of this Section 2.4, Indebtedness shall be deemed
to be "incurred" by the Company or a Subsidiary whenever the Company or such
Subsidiary shall create, assume, guarantee or otherwise become liable in respect
thereof.
SECTION 2.5. Redemption. The Notes may be redeemed at any time at the
option of the Company, in whole or in part, at a redemption price equal to the
sum of (i) the
9
<PAGE> 10
principal amount of the Notes being redeemed plus accrued interest thereon to
the Redemption Date and (ii) the Make-Whole Amount, if any, with respect to such
Notes (the "Redemption Price").
SECTION 2.6. Places of Payment. The Places of Payment where the Notes may
be presented or surrendered for payment, where the Notes may be surrendered for
registration of transfer or exchange and where notices and demands to and upon
the Company in respect of the Notes and the Senior Indenture may be served shall
be in (i) the Borough of Manhattan, The City of New York, New York, and the
office or agency for such purpose shall initially be located at the office of
State Street Bank and Trust Company, 61 Broadway, New York, New York 10005, and
(ii) the City of Boston, Massachusetts and the office or agency for such purpose
shall initially be located at the Corporate Trust Office.
SECTION 2.7. Method of Payment. Payment of the principal of and interest
on the Notes will be made at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, The City of New York (which shall
initially be an office or agency of the Trustee), in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts; provided, however, that at the option of
the Company, payments of principal and interest on the Notes (other than
payments of principal and interest due at Maturity) may be made (i) by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register or (ii) by wire transfer to an account
maintained by the Person entitled thereto located within the United States.
SECTION 2.8. Currency. Principal and interest on the Notes shall be
payable in U.S. dollars.
SECTION 2.9. Registered Securities; Global Form. The Notes shall be
issuable and transferable in fully registered form as Registered Securities,
without coupons. The 2003 Notes, the 2005 Notes and the 2008 Notes each shall be
issued in the form of one or more permanent Global Securities. The depository
for the Notes shall be The Depository Trust Company ("DTC"). The Notes shall not
be issuable in definitive form except as provided in Section 305 of the Senior
Indenture.
SECTION 2.10. Form of Notes. The 2003 Notes shall be substantially in the
form attached hereto as Exhibit A. The 2005 Notes shall be substantially in the
form attached hereto as Exhibit B. The 2008 Notes shall be substantially in the
form attached hereto as Exhibit C.
SECTION 2.11. Registrar and Paying Agent. The Trustee shall initially
serve as Registrar and Paying Agent for the Notes.
10
<PAGE> 11
SECTION 2.12. Defeasance. The provisions of Sections 1402 and 1403 of the
Senior Indenture, together with the other provisions of Article Fourteen of the
Senior Indenture, shall be applicable to the Notes. The provisions of Section
1403 of the Senior Indenture shall apply to the covenants set forth in Sections
2.4 and 2.15 of this Supplemental Indenture and to those covenants specified in
Section 1403 of the Senior Indenture.
SECTION 2.13. Events of Default. The provisions of clause (5) of Section
501 of the Senior Indenture as applicable with respect to the Notes shall be
deemed to be amended and restated in their entirety to read as follows:
(5) default under any bond, debenture, note, mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by the Company (or by any
Subsidiary, the repayment of which the Company has guaranteed or for which the
Company is directly responsible or liable as obligor or guarantor), having an
aggregate principal amount outstanding of at least $10,000,000, whether such
indebtedness now exists or shall hereafter be created, which default 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
such indebtedness having been discharged, or such acceleration having been
rescinded or annulled, within a period of 10 days after there shall have been
given written notice, 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 and stating
that such notice is a "Notice of Default" hereunder; provided, however, that
such a default on indebtedness which constitutes tax-exempt financing having an
aggregate principal amount outstanding not exceeding $25,000,000 that results
solely from a failure of an entity providing credit support for such
indebtedness to honor a demand for payment on a letter of credit shall not
constitute an Event of Default.
SECTION 2.14. Acceleration of Maturity; Rescission and Annulment. The
provisions of the first paragraph of Section 502 of the Senior Indenture as
applicable with respect to the Notes shall be deemed to be amended and restated
in their entirety to read as follows:
If an Event of Default with respect to Securities of any series at
the time Outstanding occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
Securities of that series are Original Issue Discount Securities or Indexed
Securities, such portion of the principal as may be specified in the terms
thereof) of, and the Make-Whole Amount, if any, on, all 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 the Holders), and upon any such declaration such
principal or specified portion thereof shall
11
<PAGE> 12
become immediately due and payable. If an Event of Default with respect to the
Securities of any series set forth in Section 501(6) of the Senior Indenture
occurs and is continuing, then in every such case all the Securities of that
series shall become immediately due and payable, without notice to the Company,
at the principal amount thereof (or, if any Securities are Original Issue
Discount Securities or Indexed Securities, such portion of the principal as may
be specified in the terms thereof) plus accrued interest to the date the
Securities of that series are paid, plus the Make-Whole Amount, if any, on the
Securities of that series.
SECTION 2.15. Provision of Financial Information. Whether or not the
Company is subject to Section 13 or 15(d) of the Exchange Act, the Company will,
to the extent permitted under the Exchange Act, file with the Commission the
annual reports, quarterly reports and other documents which the Company would
have been required to file with the Commission pursuant to such Section 13 or
15(d) if the Company were so subject, such documents to be filed with the
Commission on or prior to the respective dates (the "Required Filing Dates") by
which the Company would have been required so to file such documents if the
Company were so subject.
The Company will also in any event (x) within 15 days of each Required
Filing Date (i) if the Company is not then subject to Section 13 or 15(d) of the
Exchange Act, transmit by mail to all Holders, as their names and addresses
appear in the Security Register, without cost to such Holders, copies of the
annual reports, quarterly reports and other documents which the Company would
have been required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act if the Company were subject to such Sections and (ii) file
with the Trustee copies of annual reports, quarterly reports and other documents
which the Company is required to file with the Commission or would have been
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act if the Company were subject to such Sections and (y) supply,
promptly upon written request and payment of the reasonable cost of duplication
and delivery, copies of such documents to any prospective Holder.
The Trustee shall not be required to examine any of the reports and other
documents filed therewith pursuant to the provisions of this Section 2.15 or
Section 7.03 of the Senior Indenture in order to determine whether the Company
is in compliance with the provisions of Section 2.4 of this Supplemental
Indenture.
SECTION 2.16. Waiver of Certain Covenants. Notwithstanding the provisions
of Section 1009 of the Senior Indenture, the Company may omit in any particular
instance to comply with any term, provision or condition set forth in Sections
1004 to 1008, inclusive, of the Senior Indenture, with Sections 2.4 and 2.15 of
this Supplemental Indenture and with any other term, provision or condition with
respect to the Notes (except any such term, provision or condition which could
not be amended without the consent of all Holders of the Notes or such series
thereof, as applicable), if before or after the time for such compliance the
Holders of at least a majority in principal amount of all outstanding Notes, by
Act of such Holders, either waive such compliance in such instance or generally
waive compliance with such
12
<PAGE> 13
covenant or condition. Except to the extent so expressly waived, and until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
ARTICLE THREE - MISCELLANEOUS PROVISIONS.
SECTION 3.1. Ratification of Senior Indenture. Except as expressly
modified or amended hereby, the Senior Indenture continues in full force and
effect and is in all respects confirmed and preserved.
SECTION 3.2. Governing Law. This Supplemental Indenture and the Notes
shall be governed by and construed in accordance with the laws of the State of
New York. This Supplemental Indenture is subject to the provisions of the Trust
Indenture Act of 1939, as amended, and shall, to the extent applicable, be
governed by such provisions.
SECTION 3.3. Counterparts. This Supplemental Indenture 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.
[Remainder of Page Intentionally Left Blank.]
13
<PAGE> 14
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed by their respective officers hereunto duly
authorized, all as of the day and year first written above.
BAY APARTMENT COMMUNITIES, INC.
By: /s/ Gilbert M. Meyer
-----------------------------------------------
Name: Gilbert M. Meyer
Title: Chairman of the Board, President and
Chief Executive Officer
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: /s/ Robert J. Dunn
-----------------------------------------------
Name: Robert J. Dunn
Title: Vice President
14
<PAGE> 1
EXHIBIT 4.3
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), 55 WATER STREET, NEW
YORK, NEW YORK, TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING SET FORTH IN THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF DTC OR A NOMINEE OF
DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A
NOMINEE OF DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ITS NOMINEE TO A SUCCESSOR
DEPOSITORY OR ITS NOMINEE.
BAY APARTMENT COMMUNITIES, INC.
6.250% SENIOR NOTE DUE 2003
Registered No. 1 PRINCIPAL AMOUNT
CUSIP No.: 072012 AA 5 $50,000,000
BAY APARTMENT COMMUNITIES, INC., a corporation duly organized and existing
under the laws of the State of Maryland (herein referred to as the "Company"
which term shall include any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, upon presentation, the principal sum of $50,000,000
on January 15, 2003 and to pay interest on the outstanding principal amount
thereon from January 15, 1998, or from the immediately preceding Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
in arrears on January 15 and July 15 in each year, commencing July 15, 1998, at
the
<PAGE> 2
rate of 6.250% per annum, until the entire principal hereof is paid or made
available for payment. The interest so payable and punctually paid or duly
provided for on any Interest Payment Date will, as provided in the Indenture, be
paid to the Holder in whose name this Security is registered at the close of
business on the Regular Record Date for such interest which shall be December 31
or June 30 (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 shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may either be paid to the Holder in whose name this Security 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 the Holder of this Security not more than 15 days and not less than 10
days prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which this Security may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture. Payment of the
principal of and interest on this Security will be made at the office or agency
maintained for that purpose in the City of New York, New York, or elsewhere as
provided in the Indenture, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Company payments of
principal and interest on the Notes (other than payments of principal and
interest due at Maturity) may be made (i) by check mailed to the address of the
Holder entitled thereto as such address shall appear in the Security Register or
(ii) by wire transfer to an account of the Holder entitled thereto located
within the United States.
Securities of this series are 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 January 16, 1998, as supplemented
by the First Supplemental Indenture, dated as of January 20, 1998 (as so
supplemented, herein called the "Indenture"), between the Company and State
Street Bank and Trust Company (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 authenticated and delivered. This Security is one of
the series designated in the first page hereof, limited in aggregate principal
amount to $50,000,000.
Securities of this series may be redeemed at any time at the option of the
Company, in whole or in part, upon notice of not more than 60 nor less than 30
days prior to the Redemption Date, at a redemption price equal to the sum of (i)
the principal amount of the Securities being redeemed plus accrued interest
thereon to the Redemption Date and (ii) the Make-Whole Amount, if any, with
respect to such Securities.
<PAGE> 3
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company on this Security and (b) certain restrictive
covenants and the related defaults and Events of Default applicable to the
Company, in each case, upon compliance by the Company with certain conditions
set forth in the Indenture, which provisions apply to this Security.
If an Event of Default with respect to the Securities shall occur and be
continuing, the principal of the Securities may be declared due and payable in
the manner and with the effect provided in the Indenture.
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
written notice to the Trustee of a continuing Event of Default with respect to
the Securities, 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
the 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 interest on or
after the respective due dates expressed herein.
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 not less than a majority in principal amount of all
outstanding Securities. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of the Securities of each
series at the time outstanding, on behalf of the Holders of all Securities of
such series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and Make-Whole Amount, if
any) and interest on this Security at the times, place and rate, and in the coin
or currency, herein prescribed.
<PAGE> 4
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any Place of Payment where the principal of
(and Make-Whole Amount, if any) 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, 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 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.
No recourse under or upon any obligation, covenant or agreement contained
in the Indenture or in this Security, or because of any indebtedness evidenced
hereby or thereby, shall be had against any promoter, as such, or against any
past, present or future shareholder, officer or director, as such, of the
Company or of any successor, either directly or through the Company or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of this Security by the Holder thereof and as part of the
consideration for the issue of the Securities of this series.
All capitalized terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES, INCLUDING THIS SECURITY, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
<PAGE> 5
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused "CUSIP" numbers to be
printed on the Securities of this series as a convenience to the Holders of such
Securities. No representation is made as to the correctness or accuracy of such
CUSIP numbers as printed on the Securities, and reliance may be placed only on
the other identification numbers printed hereon.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee by manual signature, this Security shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.
<PAGE> 6
IN WITNESS WHEREOF, BAY APARTMENT COMMUNITIES, INC. has caused this
instrument to be duly executed under its corporate seal.
Dated:
BAY APARTMENT COMMUNITIES, INC.
/S/ Gilbert M. Meyer
By:_______________________________________________
Name: Gilbert M. Meyer
Title: Chairman of the Board, President and
Chief Executive Officer
[Corporate Seal]
Attest:
/S/ Jeffrey B. Van Horn
____________________________
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
/s/ Robert J. Dunn
By:_______________________________________________
Name: Robert J. Dunn
Title: Vice President
<PAGE> 7
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
..................................
...........................................................................
(Please Print or Typewrite Name and Address including
Zip Code of Assignee)
........................................................................... the
within Security of Bay Apartment Communities, Inc. and hereby does irrevocably
constitute and appoint
.................................................................. Attorney to
transfer said Security on the books of the within-named Company with full power
of substitution in the premises.
Dated: .............. ...................................................
...................................................
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Security in every particular, without
alteration or enlargement or any change whatever.
<PAGE> 1
EXHIBIT 4.4
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), 55 WATER STREET, NEW
YORK, NEW YORK, TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING SET FORTH IN THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF DTC OR A NOMINEE OF
DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A
NOMINEE OF DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ITS NOMINEE TO A SUCCESSOR
DEPOSITORY OR ITS NOMINEE.
BAY APARTMENT COMMUNITIES, INC.
6.500% SENIOR NOTE DUE 2005
Registered No. 1 PRINCIPAL AMOUNT
CUSIP No.: 072012 AB 3 $50,000,000
BAY APARTMENT COMMUNITIES, INC., a corporation duly organized and existing
under the laws of the State of Maryland (herein referred to as the "Company"
which term shall include any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, upon presentation, the principal sum of $50,000,000
on January 15, 2005 and to pay interest on the outstanding principal amount
thereon from January 15, 1998, or from the immediately preceding Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
in arrears on January 15 and July 15 in each year, commencing July 15, 1998, at
the rate of 6.500% per annum, until the entire principal hereof is paid or made
available for payment. The interest so payable and punctually paid or duly
provided for on any Interest
<PAGE> 2
Payment Date will, as provided in the Indenture, be paid to the Holder in whose
name this Security is registered at the close of business on the Regular Record
Date for such interest which shall be December 31 or June 30 (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 shall forthwith
cease to be payable to the Holder on such Regular Record Date, and may either be
paid to the Holder in whose name this Security 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 the Holder of this
Security not more than 15 days and not less than 10 days prior to such Special
Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which this
Security may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture. Payment of the principal
of and interest on this Security will be made at the office or agency maintained
for that purpose in the City of New York, New York, or elsewhere as provided in
the Indenture, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payments of principal and
interest on the Notes (other than payments of principal and interest due at
Maturity) may be made (i) by check mailed to the address of the Holder entitled
thereto as such address shall appear in the Security Register or (ii) by wire
transfer to an account of the Holder entitled thereto located within the United
States.
Securities of this series are 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 January 16, 1998, as supplemented
by the First Supplemental Indenture, dated as of January 20, 1998 (as so
supplemented, herein called the "Indenture"), between the Company and State
Street Bank and Trust Company (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 authenticated and delivered. This Security is one of
the series designated in the first page hereof, limited in aggregate principal
amount to $50,000,000.
Securities of this series may be redeemed at any time at the option of the
Company, in whole or in part, upon notice of not more than 60 nor less than 30
days prior to the Redemption Date, at a redemption price equal to the sum of (i)
the principal amount of the Securities being redeemed plus accrued interest
thereon to the Redemption Date and (ii) the Make-Whole Amount, if any, with
respect to such Securities.
<PAGE> 3
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company on this Security and (b) certain restrictive
covenants and the related defaults and Events of Default applicable to the
Company, in each case, upon compliance by the Company with certain conditions
set forth in the Indenture, which provisions apply to this Security.
If an Event of Default with respect to the Securities shall occur and be
continuing, the principal of the Securities may be declared due and payable in
the manner and with the effect provided in the Indenture.
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
written notice to the Trustee of a continuing Event of Default with respect to
the Securities, 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
the 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 interest on or
after the respective due dates expressed herein.
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 not less than a majority in principal amount of all
outstanding Securities affected thereby. The Indenture also contains provisions
permitting the Holders of specified percentages in principal amount of the
Securities of each series at the time outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and Make-Whole Amount, if
any) and interest on this Security at the times, place and rate, and in the coin
or currency, herein prescribed.
<PAGE> 4
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any Place of Payment where the principal of
(and Make-Whole Amount, if any) 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, 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 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.
No recourse under or upon any obligation, covenant or agreement contained
in the Indenture or in this Security, or because of any indebtedness evidenced
hereby or thereby, shall be had against any promoter, as such, or against any
past, present or future shareholder, officer or director, as such, of the
Company or of any successor, either directly or through the Company or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of this Security by the Holder thereof and as part of the
consideration for the issue of the Securities of this series.
All capitalized terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES, INCLUDING THIS SECURITY, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
<PAGE> 5
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused "CUSIP" numbers to be
printed on the Securities of this series as a convenience to the Holders of such
Securities. No representation is made as to the correctness or accuracy of such
CUSIP numbers as printed on the Securities, and reliance may be placed only on
the other identification numbers printed hereon.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee by manual signature, this Security shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.
<PAGE> 6
IN WITNESS WHEREOF, BAY APARTMENT COMMUNITIES, INC. has caused this
instrument to be duly executed under its corporate seal.
Dated:
BAY APARTMENT COMMUNITIES, INC.
By: /s/ Gilbert M. Meyer
_______________________________________________
Name: Gilbert M. Meyer
Title: Chairman of the Board, President and
Chief Executive Officer
[Corporate Seal]
Attest:
/s/ Jeffrey B. Van Horn
__________________________________
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: /s/ Robert J. Dunn
_______________________________________________
Name: Robert J. Dunn
Title: Vice President
<PAGE> 7
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
..................................
...........................................................................
(Please Print or Typewrite Name and Address including
Zip Code of Assignee)
........................................................................... the
within Security of Bay Apartment Communities, Inc. and hereby does irrevocably
constitute and appoint
.................................................................. Attorney to
transfer said Security on the books of the within-named Company with full power
of substitution in the premises.
Dated: .............. ...................................................
...................................................
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Security in every particular, without
alteration or enlargement or any change whatever.
<PAGE> 1
Exhibit 4.5
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), 55 WATER STREET, NEW
YORK, NEW YORK, TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING SET FORTH IN THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF DTC OR A NOMINEE OF
DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A
NOMINEE OF DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ITS NOMINEE TO A SUCCESSOR
DEPOSITORY OR ITS NOMINEE.
BAY APARTMENT COMMUNITIES, INC.
6.625% SENIOR NOTE DUE 2008
Registered No. 1 PRINCIPAL AMOUNT
CUSIP No.: 072012 AC 1 $50,000,000
BAY APARTMENT COMMUNITIES, INC., a corporation duly organized and existing
under the laws of the State of Maryland (herein referred to as the "Company"
which term shall include any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, upon presentation, the principal sum of $50,000,000
on January 15, 2008 and to pay interest on the outstanding principal amount
thereon from January 15, 1998, or from the immediately preceding Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
in arrears on January 15 and July 15 in each year, commencing July 15, 1998, at
the rate of 6.625% per annum, until the entire principal hereof is paid or made
available for payment. The interest so payable and punctually paid or duly
provided for on any Interest
<PAGE> 2
Payment Date will, as provided in the Indenture, be paid to the Holder in whose
name this Security is registered at the close of business on the Regular Record
Date for such interest which shall be December 31 or June 30 (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 shall forthwith
cease to be payable to the Holder on such Regular Record Date, and may either be
paid to the Holder in whose name this Security 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 the Holder of this
Security not more than 15 days and not less than 10 days prior to such Special
Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which this
Security may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture. Payment of the principal
of and interest on this Security will be made at the office or agency maintained
for that purpose in the City of New York, New York, or elsewhere as provided in
the Indenture, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payments of principal and
interest on the Notes (other than payments of principal and interest due at
Maturity) may be made (i) by check mailed to the address of the Holder entitled
thereto as such address shall appear in the Security Register or (ii) by wire
transfer to an account of the Holder entitled thereto located within the United
States.
Securities of this series are 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 January 16, 1998, as supplemented
by the First Supplemental Indenture, dated as of January 20, 1998 (as so
supplemented, herein called the "Indenture"), between the Company and State
Street Bank and Trust Company (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 authenticated and delivered. This Security is one of
the series designated in the first page hereof, limited in aggregate principal
amount to $50,000,000.
Securities of this series may be redeemed at any time at the option of the
Company, in whole or in part, upon notice of not more than 60 nor less than 30
days prior to the Redemption Date, at a redemption price equal to the sum of (i)
the principal amount of the Securities being redeemed plus accrued interest
thereon to the Redemption Date and (ii) the Make-Whole Amount, if any, with
respect to such Securities.
<PAGE> 3
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company on this Security and (b) certain restrictive
covenants and the related defaults and Events of Default applicable to the
Company, in each case, upon compliance by the Company with certain conditions
set forth in the Indenture, which provisions apply to this Security.
If an Event of Default with respect to the Securities shall occur and be
continuing, the principal of the Securities may be declared due and payable in
the manner and with the effect provided in the Indenture.
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
written notice to the Trustee of a continuing Event of Default with respect to
the Securities, 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
the 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 interest on or
after the respective due dates expressed herein.
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 not less than a majority in principal amount of all
outstanding Securities affected thereby. The Indenture also contains provisions
permitting the Holders of specified percentages in principal amount of the
Securities of each series at the time outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and Make-Whole Amount, if
any) and interest on this Security at the times, place and rate, and in the coin
or currency, herein prescribed.
<PAGE> 4
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any Place of Payment where the principal of
(and Make-Whole Amount, if any) 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, 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 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.
No recourse under or upon any obligation, covenant or agreement contained
in the Indenture or in this Security, or because of any indebtedness evidenced
hereby or thereby, shall be had against any promoter, as such, or against any
past, present or future shareholder, officer or director, as such, of the
Company or of any successor, either directly or through the Company or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of this Security by the Holder thereof and as part of the
consideration for the issue of the Securities of this series.
All capitalized terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES, INCLUDING THIS SECURITY, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
<PAGE> 5
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused "CUSIP" numbers to be
printed on the Securities of this series as a convenience to the Holders of such
Securities. No representation is made as to the correctness or accuracy of such
CUSIP numbers as printed on the Securities, and reliance may be placed only on
the other identification numbers printed hereon.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee by manual signature, this Security shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.
<PAGE> 6
IN WITNESS WHEREOF, BAY APARTMENT COMMUNITIES, INC. has caused this
instrument to be duly executed under its corporate seal.
Dated:
BAY APARTMENT COMMUNITIES, INC.
By: /s/ Gilbert M. Meyer
-------------------------------------------
Name: Gilbert M. Meyer
Title: Chairman of the Board,
President and Chief Executive Officer
[Corporate Seal]
Attest:
/s/ Jeffrey B. Van Horn
- ---------------------------------------
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: /s/ Robert J. Dunn
-------------------------------------------
Name: Robert J. Dunn
Title: Vice President
<PAGE> 7
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
..................................
...........................................................................
(Please Print or Typewrite Name and Address including
Zip Code of Assignee)
........................................................................... the
within Security of Bay Apartment Communities, Inc. and hereby does irrevocably
constitute and appoint
.................................................................. Attorney to
transfer said Security on the books of the within-named Company with full power
of substitution in the premises.
Dated: .............. ...................................................
...................................................
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Security in every particular, without
alteration or enlargement or any change whatever.
