Exhibit 1.1
Execution
Copy
Brookdale Senior Living Inc.
2.75% Convertible Senior Notes due 2018
Underwriting Agreement
June 8, 2011
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
J.P. MORGAN SECURITIES LLC
as Representatives of the several Underwriters
named in Schedule I hereto
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
One Bryant Park
New York, New York 10036
c/o J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
Ladies and Gentlemen:
Brookdale Senior Living Inc., a Delaware corporation (the “
Company
”), proposes, upon the terms
and subject to the conditions set forth herein, to issue and sell to the underwriters listed on
Schedule I
hereto (the “
Underwriters
”) for whom you are acting as representatives (the
“
Representatives
”), $275 million aggregate
principal amount of its 2.75% Convertible Senior Notes
due 2018 (the “
Initial Securities
”) and, at the option of the Underwriters, up to an additional
$41.25 million principal amount of its 2.75% Convertible Senior Notes due 2018 (the “
Option
Securities
” and, together with the Initial Securities, the “
Securities
”) to cover over-allotments,
if any. The Securities will be convertible into shares of common stock (the “
Underlying
Securities
”) of the Company, par value $0.01 per share (the “
Common Stock
”). The Securities will
be issued pursuant to an indenture, together with any officers’ certificate or supplement thereto
establishing the terms of the Securities, each to be dated as of the Closing Date (as defined
below) (together, the “
Indenture
”), by and between the Company and American Stock Transfer & Trust
Company, LLC, as trustee (the “
Trustee
”).
The Company understands that the Underwriters propose to make a public offering of the
Securities as soon as the Representatives deem advisable after this Agreement has been executed
and delivered and the Indenture has been qualified under the Trust Indenture Act of 1939, as
amended (together with the rules and regulations promulgated thereunder, the “
1939 Act
”).
The Company hereby confirms its agreement with the Underwriters concerning the purchase and
sale of the Securities, as follows:
1.
Representations and Warranties.
The Company represents and warrants to, and agrees
with, the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-174766), which contains a base
prospectus (the “
Base Prospectus
”) relating to the registration of certain securities described
therein, including the Securities and the Underlying Securities, has been filed with the Securities
and Exchange Commission (the “
Commission
”); such registration statement, as amended, including the
financial statements, exhibits and schedules thereto, at each time of effectiveness under the
Securities Act of 1933 and the rules and regulations promulgated thereunder (collectively, the
“
Act
”), including any required information deemed to be a part thereof at the time of effectiveness
pursuant to Rule 430B under the Act or the Securities Exchange Act of 1934 and the rules and
regulations promulgated thereunder (collectively, the “
Exchange Act
”), is called the “
Registration
Statement
.” If the Company has filed an abbreviated registration statement pursuant to Rule 462(b)
under the Act (the “
Rule 462(b) Registration Statement
”), then any reference herein to the term
“Registration Statement” shall be deemed to include such Rule 462(b) Registration Statement;
provided, however, that “Registration Statement” without reference to a time means the Registration
Statement as of the time of the first contract of sale for the Securities, which time shall be
considered the “new effective date” of the Registration Statement with respect to the Underwriters
and the Securities (within the meaning of Rule 430B(f)(2) under the Act (“
Rule 430B(f)(2)
”)). The
term “
Preliminary Prospectus
” shall mean the Base Prospectus together with the preliminary
prospectus supplement relating to the Securities. The term “
Prospectus
” shall mean the final
prospectus relating to the Securities that is first filed pursuant to Rule 424(b) after the date
and time that this Agreement is executed and delivered by the parties hereto. Any reference herein
to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form
S-3 under the Act; any reference to any amendment or supplement to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include any documents filed after the date of such
Preliminary Prospectus or Prospectus, as the case may be, under the Exchange Act, and incorporated
by reference in such Preliminary Prospectus or Prospectus; and any reference to any amendment to
the Registration Statement shall be deemed to refer to and include any annual report of the Company
filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in the Registration Statement; any “issuer
free writing prospectus” as defined in Rule 433 under the Act relating to the Securities is
hereinafter called an “
Issuer Free Writing Prospectus;
”
(b) The Registration Statement is an “automatic shelf registration statement” (as defined in
Rule 405 under the Act) on Form S-3, which became effective under Rule 462(e) under the Act. No
stop order suspending the effectiveness of the Registration Statement is in effect, the Commission
has not issued any order or notice preventing or suspending the use of the Registration Statement,
any Preliminary Prospectus or the Prospectus and no proceedings for
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such purpose have been instituted or are pending or, to the knowledge of the Company, are
contemplated or threatened by the Commission;
(c) The Preliminary Prospectus conformed, and the Prospectus, when filed, will conform in all
material respects with the Act. Each of the Registration Statement and any post-effective
amendment thereto, at the time it became effective and at the date hereof, conformed and will
conform in all material respects with the Act and did not and will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading. The Prospectus (including any Prospectus
wrapper), as amended or supplemented, as of its date, at the date hereof, at the time of any filing
pursuant to Rule 424(b) under the Act and at the applicable Time of Delivery (as defined herein),
did not and will not contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The representations and warranties set forth in the two
immediately preceding sentences do not apply to (i) the Statement of Eligibility (Form T-1) of the
Trustee under the 1939 Act or (ii) statements in or omissions from the Registration Statement or
any post-effective amendment thereto, or the Prospectus, or any amendments or supplements thereto,
made in reliance upon and in conformity with information furnished in writing to the Company by or
on behalf of an Underwriter expressly for use in the Registration Statement or the Prospectus, it
being understood and agreed that the only such information furnished by the Underwriters consists
of the information described as such in
Section 7(b)
. There is no contract or other
document required to be described in the Prospectus or to be filed as an exhibit to the
Registration Statement that has not been described or filed as required;
(d) The documents incorporated by reference in any Preliminary Prospectus and the Prospectus,
when they became effective or were filed with the Commission, as the case may be, conformed in all
material respects to the requirements of the Exchange Act. Any further documents so filed and
incorporated by reference in any Preliminary Prospectus and the Prospectus or any further amendment
or supplement thereto, when such documents become effective or are filed with the Commission, as
the case may be, will conform in all material respects to the requirements of the Act or the
Exchange Act, as applicable;
(e) For
purposes of this Agreement, the “
Applicable Time
” is
6:00 p.m., New York City time, on
the date hereof. At or prior to the Applicable Time, the Company had prepared the following
information (collectively, the “
Pricing Disclosure Package
”): a Preliminary Prospectus dated June
7, 2011 and each Issuer Free Writing Prospectus listed on
Schedules II(a)
and
II(b)
hereto. As of the Applicable Time, the Pricing Disclosure Package did not include any untrue
statement of a material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading;
and each Issuer Free Writing Prospectus listed on
Schedule II(a)
or
Schedule II(b)
hereto does not conflict with the information contained in the Registration Statement that has not
been superseded or modified, including any prospectus or prospectus supplement that is or becomes
part of the Registration Statement, and each such Issuer Free Writing Prospectus, as supplemented
by and taken together with the Pricing Disclosure Package as of the Applicable Time, did not
include any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the
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circumstances under which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to (i) the Statement of Eligibility (Form T-1) of the
Trustee under the 1939 Act or (ii) statements or omissions made in an Issuer Free Writing
Prospectus in reliance upon and in conformity with information furnished in writing to the Company
by the Underwriters, it being understood and agreed that the only such information furnished by the
Underwriters consists of the information described as such in
Section 7(b)
;
(f) Neither the Company nor any of its subsidiaries has sustained since the date of the latest
audited financial statements included or incorporated by reference in the Pricing Disclosure
Package and the Prospectus, any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set forth or contemplated in
the Pricing Disclosure Package and the Prospectus, and, since the respective dates as of which
information is given in the Registration Statement and the Pricing Disclosure Package and the
Prospectus, there has not been any change in the capital stock or long-term debt of the Company or
any of its subsidiaries or any material adverse change, or any development that would reasonably be
expected to involve a prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders’ equity, assets or results of operations of the
Company and its subsidiaries taken as a whole, otherwise than as set forth or contemplated in the
Pricing Disclosure Package and the Prospectus;
(g) The Company and its subsidiaries have good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned by them, in each case free
and clear of all liens, encumbrances and defects except such as (A) are described in the Pricing
Disclosure Package and the Prospectus, (B) do not, individually or in the aggregate, result in a
material adverse effect on the current or future consolidated financial position, stockholders’
equity, assets or results of operations of the Company and its subsidiaries (a “
Material Adverse
Effect
”), or (C) would not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect; and any real property and buildings held under lease by the Company and
its subsidiaries are held by them under valid, subsisting and enforceable leases with such
exceptions as are described in the Pricing Disclosure Package and the Prospectus or as would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect;
(h) The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with power and authority (corporate and other) to
own its properties and conduct its business as described in the Pricing Disclosure Package and the
Prospectus, and has been duly qualified as a foreign corporation for the transaction of business
and is in good standing under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such qualification, except to the extent that
the failure to be so qualified would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect; and each subsidiary of the Company that is listed on
Schedule III
to this Agreement has been duly organized, is validly existing and is in good
standing under the laws of its jurisdiction of incorporation or formation, as applicable;
(i) The Company has an authorized capitalization as set forth in the Pricing Disclosure
Package and the Prospectus, and all of the issued shares of capital stock of the
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Company have been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the description of the Common Stock contained in the Pricing Disclosure Package and
the Prospectus; and all of the issued shares of capital stock of each subsidiary of the Company
have been duly and validly authorized and issued, are fully paid and non-assessable and (except for
directors’ qualifying shares) are owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims;
(j) This Agreement has been duly authorized, executed and delivered by the Company;
(k) The compliance by the Company with all of the provisions of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default under, (x) any
indenture, mortgage, deed of trust, loan agreement, lease, sublease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by which the Company or
any of its subsidiaries is bound or to which any of the property or assets of the Company or any of
its subsidiaries is subject, (y) the Amended and Restated Certificate of Incorporation or Amended
and Restated Bylaws of the Company or (z) any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or
any of their properties, except in the case of clauses (x) and (z) for such conflicts, breaches,
defaults or violations that would not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect; and no consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or body or any other third party
is required for the offer and sale of the Securities by the Company or the consummation by the
Company of the transactions contemplated by this Agreement, except for such consents, approvals,
authorizations, registrations or qualifications as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of the Securities by the Underwriters;
(l) Neither the Company nor any of its subsidiaries is (x) in violation of its certificate of
incorporation, by-laws, limited liability company operating agreement or partnership agreement, as
applicable, or (y) in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by which it or any of its properties may be
bound, except in the case of clause (x), but only with respect to subsidiaries of the Company, and
clause (y) for such violations or defaults that would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect;
(m) The Securities, the Underlying Securities and the Indenture will conform in all material
respects to the respective statements relating thereto contained in the Registration Statement, the
Pricing Disclosure Package and the Prospectus and will be in substantially the respective forms
filed or incorporated by reference, as the case may be, as exhibits to the Registration Statement.
The statements set forth in the Pricing Disclosure Package and the Prospectus under the captions
“Description of Capital Stock,” “Description of Debt Securities” and “Description of the Notes”,
insofar as they purport to constitute a summary of the terms of the Securities, the Underlying
Securities and the Indenture, and the statements set forth under the captions “Certain U.S. Federal
Income Tax Considerations”, “Business — Government
5
Regulation”, “Business — Environmental Matters” and “Underwriting”, insofar as they purport
to describe the provisions of the laws and documents referred to therein, are accurate, complete
and fair;
(n) Other than as set forth in the Pricing Disclosure Package and the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any of its subsidiaries is a
party or of which any property of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company, any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect; and, to the Company’s knowledge, no such proceedings or
any investigations are threatened or contemplated by governmental authorities or threatened by
others;
(o) The Company is not and, after giving effect to the offering and sale of the Securities,
will not be an “investment company”, as such term is defined in the Investment Company Act of 1940,
as amended (the “
Investment Company Act
”);
(p) The financial statements included or incorporated by reference in the Pricing Disclosure
Package and the Prospectus (taken together with the related notes and schedules thereto) present
fairly, in all material respects, the financial position of the Company and its subsidiaries as of
the dates shown and their results of operations and cash flows for the periods shown, and such
financial statements have been prepared in conformity with the generally accepted accounting
principles in the United States applied on a consistent basis and the schedules included in each
Registration Statement present fairly, in all material respects, the information required to be
stated therein;
(q) Ernst & Young LLP, who have certified certain financial statements of the Company and its
subsidiaries included or incorporated by reference in the Registration Statement and included or
incorporated by reference in the Pricing Disclosure Package and the Prospectus, are independent
public accountants as required by the Act and the Exchange Act;
(r) The Company maintains a system of internal control over financial reporting (as such term
is defined in Rule 13a-15(f) under the Exchange Act) that complies with the requirements of the
Exchange Act and has been designed by the Company’s principal executive officer and principal
financial officer, or under their supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. The Company’s internal
control over financial reporting is effective and the Company is not aware of any material
weaknesses in its internal control over financial reporting. Since the date of the latest audited
financial statements of the Company included or incorporated by reference in the Pricing Disclosure
Package and the Prospectus, there has been no change in the Company’s internal control over
financial reporting that has materially affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting;
(s) The Company maintains disclosure controls and procedures (as such term is defined in Rule
13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such
disclosure controls and procedures have been designed to ensure that material information relating
to the Company and its subsidiaries is made known to the
6
Company’s principal executive officer and principal financial officer by others within those
entities; and such disclosure controls and procedures are effective;
(t) Each of the Company and its subsidiaries (x) has all certificates, consents, exemptions,
orders, permits, licenses, authorizations, or other approvals (each, an “
Authorization
”) of and
from, and has made all declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts and other tribunals,
necessary or required to engage in the business currently conducted by it in the manner described
in the Pricing Disclosure Package and the Prospectus; (y) all such Authorizations are valid and in
full force and effect; and (z) each of the Company and its subsidiaries is in compliance with the
terms and conditions of all such Authorizations and with the rules and regulations of the
regulatory authorities and governing bodies having jurisdiction with respect thereto, except, with
respect to (x), (y) and (z), as would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect; and there are no proceedings pending or, to the best of the
Company’s knowledge, threatened, to revoke, cancel or terminate such Authorizations and
applications and the Company is not aware of any basis on which such Authorizations could not be
renewed or, in the case of applications, will not be issued without contest;
(u) Each of the Company and its subsidiaries owns or possesses or has the right to use the
licenses, material copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures), domain names,
trademarks, service marks and trade names (collectively, the “
Intellectual Property
”) presently
employed by it in connection with its operations, except where the failure to own or possess or
have the right to use such Intellectual Property would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of infringement of or conflict with asserted rights of others
with respect to the foregoing. To the knowledge of the Company and its subsidiaries, the use of
such Intellectual Property in connection with the business and operations of the Company and its
subsidiaries as described in the Pricing Disclosure Package does not infringe on the rights of any
person;
(v) All tax returns required to be filed by the Company and its subsidiaries in all
jurisdictions have been timely and duly filed, other than those filings being contested in good
faith and except where the failure to file would not, individually or in the aggregate, have a
Material Adverse Effect. There are no tax returns of the Company or its subsidiaries that are
currently being audited by state, local or federal taxing authorities or agencies (and with respect
to which the Company or its subsidiaries has received notice), where the findings of such audit
could reasonably be expected to result in a Material Adverse Effect. All taxes, including
withholding taxes, penalties and interest, assessments, fees and other charges due or claimed to be
due from such entities, have been paid, other than those being contested in good faith and for
which adequate reserves have been provided or those currently payable without penalty or interest
or those that could not reasonably be expected to result in a Material Adverse Effect;
(w) Except as disclosed in the Pricing Disclosure Package and the Prospectus, each of the
Company and its subsidiaries maintains insurance covering its properties, operations, personnel and
businesses which insures against such losses and risks as are adequate in
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accordance with its reasonable business judgment to protect the Company and its subsidiaries
and their businesses;
(x) Except as disclosed in the Pricing Disclosure Package and the Prospectus, there are no
material business relationships or related party transactions that would be required to be
disclosed therein by Item 404 of Regulation S-K of the Commission and such business relationship or
related party transaction described therein is a fair and accurate description in all material
respects of the relationships and transactions so described;
(y) Each of the Company and its subsidiaries is in compliance in all material respects with
all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations thereunder (“
ERISA
”); no
“reportable event” (as defined in ERISA) has occurred with respect to any “pension plan” (as
defined in ERISA) for which the Company or any of its subsidiaries would have any material
liability; each of the Company and its subsidiaries has not incurred and does not reasonably expect
to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from,
any “pension plan” or (ii) Section 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the “
Code
”); and each “pension
plan” for which the Company or any of its subsidiaries would have any material liability, that is
intended to be qualified under Section 401(a) of the Code is so qualified in all material respects
and nothing has occurred, whether by action or by failure to act, which would cause the loss of
such qualification;
(z) Each of the Company and its subsidiaries is and has been in compliance with all applicable
Environmental Laws (as defined below), except where failure to comply would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. To the best of the
Company’s knowledge, there has been no material seepage, leak, escape, leach, discharge, injection,
release, emission, spill, pumping, pouring, emptying, dumping, disposing, or migrating or any
threat thereof of any Hazardous Material (as defined below) on, in, under, or from any real
property referred to in the Pricing Disclosure Package and the Prospectus which requires any
disclosure, investigation, cleanup, remediation, monitoring, maintenance, abatement or deed or use
restriction, or which will give rise to any other costs or liabilities to the Company or its
subsidiaries under any Environmental Laws. There are no past, present or, to the Company’s
knowledge, reasonably anticipated future events, conditions, circumstances, activities, practices,
actions, omissions or plans that could reasonably be expected to interfere with or prevent
compliance by the Company or its subsidiaries with Environmental Laws, or that could reasonably be
expected to give rise to any material costs or liabilities, which could reasonably be expected to,
either individually or in the aggregate, have a Material Adverse Effect. There are no judicial or
administrative proceedings of an environmental nature pending, or to the best of the Company’s
knowledge, threatened against the Company or its subsidiaries which could reasonably be expected to
be material to the business or financial condition of the Company and its subsidiaries to involve
potential damages, monetary sanctions, capital expenditures, deferred charges or charges to income
exceeding ten percent of the current assets of the Company and its subsidiaries or to involve
potential monetary sanctions of $100,000.00 or more. None of the Company or its subsidiaries has
received notice from any governmental agency or body or other person of any actual or alleged
violation of or actual or alleged liability under any Environmental Law, and does not otherwise
have knowledge of, any occurrence,
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condition or circumstance which, with notice, passage of time, or failure to act, would give
rise to any claim or liability under or pursuant to any Environmental Law. The Company or its
subsidiaries, has not arranged for the disposal of any Hazardous Material at, or transported any
Hazardous Material to, any site which could result in material liability for the Company or its
subsidiaries. The Company or its subsidiaries has not entered into any agreement relating to any
alleged violation of any Environmental Law or any actual or alleged release or threatened release
or cleanup at any location of any Hazardous Materials. As used herein, “
Environmental Law
” means
any federal, state, local or foreign law, statute, ordinance, rule, regulation, order, decree,
judgment, injunction, permit, license, authorization or other binding requirement, or common law,
relating to health, safety or the protection, cleanup or restoration of the environment or natural
resources, including, but not limited to, those relating to the distribution, processing,
generation, treatment, storage, disposal, transportation, other handling or release or threatened
release of Hazardous Materials, and “
Hazardous Materials
” means any material (including, without
limitation, pollutants, contaminants, hazardous or toxic substances or wastes, asbestos, silica,
mixed dust, petroleum or constituents thereof, bacteria, radon, mold or fungi) that is regulated by
or may give rise to liability under any Environmental Law. The Company has provided you copies of
all materials and potentially material environmental studies, investigations, reports or
assessments concerning the Company, or any currently or previously owned or leased properties
within its possession or control. In the ordinary course of its business, the Company conducts a
periodic review of the effect of the 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 cleanup, closure
of properties or compliance with the Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to third parties);
(aa) At the time of filing the Registration Statement the Company was not, and as of the date
hereof, is not, an “ineligible issuer,” as defined under Rule 405 under the Act;
(bb) There are no persons with registration or other similar rights to have any securities
registered for sale under the Registration Statement or included in the offering contemplated by
this Agreement;
(cc) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any
director, officer or employee of the Company or any of its subsidiaries is aware of or has taken
any action, directly or indirectly, that would result in a violation by such persons of the Foreign
Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “
FCPA
”),
including, without limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization
of the payment of any money, or other property, gift, promise to give, or authorization of the
giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for foreign political office, in
contravention of the FCPA, and the Company, its subsidiaries and, to the knowledge of the Company,
its affiliates have conducted their businesses in compliance with the FCPA and have instituted and
maintain policies and procedures designed to ensure, and which are reasonably expected to continue
to ensure, continued compliance therewith;
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(dd) The operations of the Company and its subsidiaries are and have been conducted at all
times in compliance with applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes
of all applicable jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines issued, administered or enforced by any governmental agency
(collectively, the “
Money Laundering Laws
”) and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator involving the Company or any of
its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the
Company, threatened;
(ee) Neither the Company nor any of its subsidiaries nor, to the knowledge of the Company, any
director, officer or employee of the Company or any of its subsidiaries, is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“
OFAC
”);
(ff) The Indenture has been duly authorized by the Company and as of the effectiveness of the
Registration Statement and on the Closing Date and on any Additional Closing Date, as the case may
be, was or will have been duly qualified under the 1939 Act, and, when duly executed and delivered
in accordance with its terms by each of the parties thereto, will constitute a valid and legally
binding agreement of the Company, enforceable against the Company in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting enforcement of creditors’ rights generally or by general
principles of equity;
(gg) The Securities have been duly authorized by the Company and, when duly executed,
authenticated, issued and delivered as provided in the Indenture (assuming due authentication of
the Securities by the Trustee) and paid for as provided herein, will be duly and validly issued and
outstanding, will be entitled to the benefits of the Indenture and will constitute valid and
legally binding obligations of the Company, enforceable against the Company in accordance with
their terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally or
by general principles of equity; and
(hh) Upon issuance and delivery of the Securities in accordance with this Agreement and the
Indenture, the Securities will be convertible in accordance with the terms thereof into the
Underlying Securities in accordance with the terms of the Securities; the Underlying Securities
reserved for issuance upon conversion of the Securities have been duly authorized and reserved and,
when issued upon conversion of the Securities in accordance with the terms of the Securities and
the Indenture, will be validly issued, fully paid and non-assessable. The issuance of the
Underlying Securities will not be subject to any preemptive or similar rights.
Any certificate or other instrument signed by any officer of the Company or any of its
subsidiaries and delivered to the Underwriters or counsel to the Underwriters shall be deemed a
representation and warranty by the Company, as to the matters covered thereby, to each Underwriter.
10
2.
Sale and Delivery to Underwriters; Closing
.
(a) The Company agrees to issue and sell the Initial Securities to the Underwriters as
provided in this Agreement, and each Underwriter, on the basis of the representations, warranties
and agreements set forth herein and subject to the conditions set forth herein, agrees, severally
and not jointly, to purchase from the Company the respective principal amount of Initial Securities
set forth opposite such Underwriter’s name in
Schedule I
hereto, together with any
additional principal amount of Initial Securities which such Underwriter may become obligated to
purchase pursuant to the provisions of Section 10 hereof, at a
price equal to 97.5% of the principal
amount thereof (the “
Purchase Price
”), plus accrued
interest, if any, from June 14, 2011 to the
Closing Date, subject to such adjustments as the Underwriters in their discretion shall make to
ensure that any sales or purchases of the Initial Securities are in authorized denominations.
(b) In addition, the Company agrees to issue and sell the Option Securities to the several
Underwriters as provided in this Agreement, and the Underwriters, on the basis of the
representations, warranties and agreements set forth herein and subject to the conditions set forth
herein, shall have the option to purchase, severally and not jointly, from the Company the Option
Securities at the Purchase Price plus accrued interest, if any, from the Closing Date to the date
of payment and delivery.
(c) The option hereby granted may be exercised for 13 days after the date hereof and may be
exercised in whole or in part from time to time only for the purpose of covering overallotments
made in connection with the offering and distribution of the Initial Securities upon notice by the
Representatives to the Company setting forth the amount of Option Securities as to which the
several Underwriters are then exercising the option and the time and date of payment and delivery
for such Option Securities. Any such time and Additional Closing Date (an “
Additional Closing
Date
”) shall be determined by the Representatives, but shall not be later than seven full business
days after the exercise of said option, nor in any event prior to the Closing Date. If the option
is exercised as to all or any portion of the Option Securities, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total principal amount of Option
Securities then being purchased which the number of Initial Securities set forth in
Schedule
I
hereto opposite the name of such Underwriter bears to the total principal amount of Initial
Securities, subject in each case to such adjustments as the Representatives in their discretion
shall make to ensure that any sales or purchases are in authorized denominations.
(d) Payment of the purchase price for, and delivery of the Global Notes (as defined below)
representing the Initial Securities shall be made at the offices of Willkie Farr & Gallagher LLP,
or at such other place as shall be agreed upon by the Representatives and the Company, at 9:00 A.M.
(New York City time) on the third business day after the date hereof (unless postponed in
accordance with the provisions of Section 10), or such other time not later than ten business days
after such date as shall be agreed upon by the Representatives and the Company (such time and date
of payment and delivery being herein called “
Closing Date
” and the Closing Date and any Additional
Closing Date, a “
Delivery Date
” and the time on any such Delivery Date, the “
Time of Delivery
”).
11
(e) In addition, in the event that any or all of the Option Securities are purchased by the
Underwriters, payment of the purchase price for, and delivery of certificates for, such Option
Securities shall be made at the above-mentioned offices, or at such other place as shall be agreed
upon by the Representatives and the Company, on the relevant Additional Closing Date as specified
in the notice from the Representatives to the Company.
(f) Payment shall be made to the Company by wire transfer of immediately available funds to a
bank account designated by the Company, against delivery to the Representatives for the respective
accounts of the Underwriters, through the facilities of The Depositary Trust Company, of one or
more global notes (the “
Global Notes
”) representing the Securities to be purchased by them, with
any transfer taxes payable in connection with the sale of such Securities duly paid by the Company.
It is understood that each Underwriter has authorized the Representatives, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the Initial Securities
and the Option Securities, if any, which it has agreed to purchase. The Representatives,
individually and not as representative of the Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Initial Securities or the Option Securities, if any, to
be purchased by any Underwriter whose funds have not been received by the Closing Date or the
relevant Additional Closing Date, as the case may be, but such payment shall not relieve such
Underwriter from its obligations hereunder.
(g) The Global Notes representing the Initial Securities and the Option Securities, if any,
shall be issued in denominations of $2,000 and integral multiples of $1,000 and registered in such
names as the Representatives may request in writing at least one full business day before the
Closing Date or the relevant Additional Closing Date, as the case may be. The Global Notes
representing the Initial Securities and the Option Securities, if any, will be made available for
examination and packaging by the Representatives in The City of New York not later than 10:00 A.M.
(New York City time) on the business day prior to the Closing Date or the relevant Additional
Closing Date, as the case may be.
3.
Covenants and Further Agreements of the Company
. The Company further covenants and
agrees with each Underwriter, as follows:
(a) To prepare the Prospectus in a form approved by you and to file such Prospectus pursuant
to Rule 424(b) under the Act not later than the Commission’s close of business on the second
business day following the execution and delivery of this Agreement, or, if applicable, such
earlier time as may be required by Rule 430B under the Act; to make no further amendment or any
supplement to the Registration Statement, Pricing Disclosure Package or Prospectus which shall be
disapproved by you promptly after reasonable notice thereof; to file promptly all material
required to be filed by the Company with the Commission pursuant to Rule 433(d) under the Act; to
advise you, promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to the Prospectus or
any amended Prospectus has been filed and to furnish you with copies thereof; to advise you,
promptly after it receives notice thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any prospectus in respect of the Securities, of
the suspension of the qualification of the Securities for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose, or of any request by the
Commission for the amending or
12
supplementing of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or suspending the use of
any prospectus or suspending any such qualification, promptly to use its reasonable best efforts
to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may reasonably request to qualify
the Securities for offering and sale under the securities or Blue Sky laws of such jurisdictions
as you may reasonably request and to comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions for as long as may be necessary to complete the
distribution of the Securities, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to service of process in
any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the business day next succeeding the date of
this Agreement and from time to time, to furnish the Underwriters with written and electronic
copies of the Prospectus in New York City in such quantities as you may reasonably request, and,
if the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under
the Act) is required at any time prior to the expiration of nine months after the time of issue of
the Prospectus in connection with the offering or sale of the Securities and if at such time any
events shall have occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were
made when such Prospectus is delivered (or in lieu thereof, the notice referred to in Rule 173(a)
under the Act is given), not misleading, or, if for any other reason it shall be necessary during
such period to amend or supplement the Prospectus in order to comply with the Act, to notify you
and upon your request to prepare and furnish without charge to the Underwriters and to any dealer
in securities as many written and electronic copies as you may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance, and in case the Underwriters are required to
deliver a prospectus (or in lieu thereof, give the notice referred to in Rule 173(a) under the
Act) in connection with sales of any of the Securities at any time nine months or more after the
time of issue of the Prospectus, upon your request but at the expense of the Underwriters, to
prepare and deliver to the Underwriters as many written and electronic copies as you may request
of an amended or supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to the Company’s securityholders as soon as practicable, but
in any event not later than eighteen months after the effective date of the Registration Statement
(as defined in Rule 158(c) under the Act), an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to and including the date
60 days after the date of the Prospectus (the “
Lock-Up Period
”), not to file any registration
statement with the Commission and not to offer, sell, contract to sell, pledge, grant any option
to purchase, make any short sale or otherwise dispose of (nor make any public
13
announcement of its intention to engage in any of the foregoing), except as provided
hereunder, any shares of Common Stock or any securities of the Company that are substantially
similar to the Securities, including but not limited to any securities that are convertible into
or exchangeable for, or that represent the right to receive, Common Stock or any such
substantially similar securities (other than (i) pursuant to the Company’s Omnibus Stock Incentive
Plan or any other stock incentive or purchase plans existing on the date of this Agreement
or approved by the Company’s shareholders after the date hereof, or pursuant to any
registration statement on Form S-8, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of the date of this Agreement; (ii) the issuance of shares
of Common Stock in connection with the Company’s obligations under the definitive agreements
entered into by the Company with Horizon Bay Realty, L.L.C., HCP, Inc. or Chartwell Seniors
Investment Trust, as the case may be, as set described under the caption “Recent
Developments-Horizon Bay/HCP Transactions,” in the Prospectus; and (iii) the issuance of shares of
Common Stock in exchange for the assets of, or a majority or controlling portion of the equity of,
another entity in connection with the acquisition by the Company or any of its subsidiaries of
such entity,
provided
,
however
, that, (y) the aggregate market value of all such
shares may not exceed $100 million and (z) prior to the issuance of such shares, each recipient of
such shares shall agree in writing with you, in an agreement in the form to be agreed to by you,
not to sell, offer, dispose or otherwise transfer any such shares or options during such 60-day
period, without your prior written consent), without the prior written consent of the
Representatives;
(f) Unless otherwise publicly available in electronic format on the website of the Company or
the Commission, to furnish to the Company’s stockholders as soon as practicable after the end of
each fiscal year an annual report (including a balance sheet and statements of income,
stockholders’ equity and cash flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter ending after the date
hereof), to make available to the Company’s stockholders consolidated summary financial
information of the Company and its subsidiaries for such quarter in reasonable detail;
(g) Unless otherwise publicly available in electronic format on the website of the Company or
the Commission, during a period of three years from the effective date of the Registration
Statement, to furnish to you copies of all reports or other communications (financial or other)
furnished to the Company’s stockholders, and to deliver to you (i) as soon as they are available,
copies of any reports and financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the Company is listed, other than
such reports and financial statements that are publicly available on the Commission’s EDGAR
system; and (ii) such additional information concerning the business and financial condition of
the Company as you may from time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its subsidiaries are consolidated
in reports furnished to its stockholders generally or to the Commission);
(h) To file with the Commission such information on Form 10-Q or Form 10-K as may be required
by Rule 463 under the Act;
14
(i) If the Company elects to rely upon Rule 462(b), the Company shall file a Rule 462(b)
Registration Statement with the Commission in compliance with Rule 462(b) by 10:00 p.m.,
Washington, D.C. time, on the date of this Agreement, and the Company shall at the time of filing
either pay to the Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Act;
(j) Upon request of the Underwriter, to furnish, or cause to be furnished, to the
Underwriters an electronic version of the Company’s trademarks, servicemarks and corporate logo
for use on the website, if any, operated by the Underwriters for the purpose of facilitating the
on-line offering of the Securities (the “
License
”); provided, however, that the License shall be
used solely for the purpose described above, is granted without any fee and may not be assigned or
transferred;
(k) To apply the net proceeds from the sale of the Securities as described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus under the heading “Use of Proceeds”;
(l) Not to take, directly or indirectly, any action designed to or that could reasonably be
expected to cause or result in stabilization or manipulation of the price of the Securities, Common
Stock or any other security of the Company and not to take any action prohibited by Regulation M
under the Exchange Act in connection with the distribution of the Securities contemplated hereby;
(m) To reserve and keep available at all times, free of preemptive or similar rights, shares
of Common Stock for the purpose of enabling the Company to satisfy all obligations to issue the
Underlying Securities upon conversion of the Securities; and
(n) To use its reasonable best efforts to cause the Underlying Securities to be listed on the
New York Stock Exchange (the “
Exchange
”).
4.
Additional Agreements of the Company and the Underwriters
.
(a) The Company represents and agrees that, without the prior consent of the Underwriters, it
has not made and will not make any offer relating to the Securities that would constitute a “free
writing prospectus” as defined in Rule 405 under the Act; each Underwriter represents and agrees
that, without the prior consent of the Company, it has not made and will not make any offer
relating to the Securities that would constitute a free writing prospectus; any such free writing
prospectus the use of which has been consented to by the Company and the Underwriter is listed on
Schedule II(a) or Schedule II(b) hereto;
(b) The Company has complied and will comply with the requirements of Rule 433 under the Act
applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission or
retention where required and legending; and
(c) The Company agrees that if at any time following issuance of an Issuer Free Writing
Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus
would conflict with the information in the Registration Statement, the
15
Pricing Disclosure Package or the Prospectus or would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements therein,
in the light of the circumstances then prevailing, not misleading, the Company will give prompt
notice thereof to the Underwriters and, if requested by the Underwriters, will prepare and furnish
without charge to the Underwriters an Issuer Free Writing Prospectus or other document which will
correct such conflict, statement or omission;
provided
,
however
, that this
agreement shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made
in reliance upon and in conformity with information furnished in writing to the Company by the
Underwriters expressly for use therein, it being understood and agreed that the only such
information furnished by the Underwriters consists of the information described as such in
Section 7(b)
.
5.
Expenses.
The Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company’s counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in connection with the
preparation, printing and filing of the Registration Statement, any Preliminary Prospectus, any
Issuer Free Writing Prospectus and the Prospectus and amendments and supplements thereto and the
mailing and delivering of copies thereof to the Underwriter and dealers; (ii) the cost of printing
or producing this Agreement, the Blue Sky Memorandum, closing documents (including any compilations
thereof) and any other documents in connection with the offering, purchase, sale and delivery of
the Securities; (iii) all expenses in connection with the qualification of the Securities for
offering and sale under state securities laws as provided in
Section 3(b)
hereof, including
the fees and disbursements of counsel for the Underwriters in connection with such qualification
and in connection with the Blue Sky survey; (iv) the filing fees incident to, and the fees and
disbursements of counsel for the Underwriters in connection with, securing any required review by
the Financial Industry Regulatory Authority, Inc. of the terms of the sale of the Securities; (v)
the cost of preparing the Global Notes and certificates for the Underlying Securities; (vi) the
cost and charges of the Trustee and any transfer agent or registrar and for the Securities or the
Underlying Securities; (vii) the fees and expenses incurred in connection with the listing of the
Securities or the Common Stock issuable upon conversion of the Securities on the Exchange; and
(viii) all other reasonable and documented out-of-pocket costs and expenses incident to the
performance of the obligations of the Company hereunder which are not otherwise specifically
provided for in this
Section 5
. It is understood, however, that the Company shall bear the
cost of any other matters not directly relating to the sale and purchase of the Securities pursuant
to this Agreement, and that, except as provided in this
Section 5
and
Section 7
hereof, the Underwriters will severally pay all of their own costs and expenses, including the fees
of their respective counsel, transfer taxes on resale of any of the Securities by them, and any
advertising expenses connected with any offers they may make.
6.
Conditions of Underwriters’ Obligations.
The obligations of the Underwriters
hereunder to purchase the Initial Securities on the Closing Date or the Option Securities on any
Additional Closing Date, as the case may be, shall be subject, in their discretion, to the
condition that all representations and warranties and other statements of the Company herein are,
at and as of the applicable Time of Delivery, true and correct, the condition that the Company
shall have performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
16
(a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) within
the applicable time period prescribed for such filing by the rules and regulations under the Act
and in accordance with
Section 3(a)
hereof; all material required to be filed by the
Company pursuant to Rule 433(d) under the Act shall have been filed with the Commission within the
applicable time period prescribed for such filing by Rule 433; if the Company has elected to rely
upon Rule 462(b), the Rule 462(b) Registration Statement shall have become effective by 10:00
p.m., Washington, D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the Commission; no stop
order suspending or preventing the use of any Preliminary Prospectus or the Prospectus or any
Issuer Free Writing Prospectus shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall have been complied with to
the reasonable satisfaction of the Underwriters;
(b) Willkie Farr & Gallagher LLP and Cleary Gottlieb Steen & Hamilton LLP, counsel for the
Underwriters, shall have furnished to you such written opinions, in each case dated the applicable
Time of Delivery, with respect to such matters as you may reasonably request, and such counsel
shall have received such papers and information as they may reasonably request to enable them to
pass upon such matters;
(c) Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Company, shall have furnished to
you (i) their written opinion as counsel for the Company (a draft of such opinion is attached as
Annex II(a)
; (ii) the tax opinion as special tax counsel for the Company (a draft of such
opinion is attached as
Annex II(b)
, and (iii) the negative assurance letter as counsel for
the Company (a draft of such letter is attached as
Annex II(c)
, in each case dated the
applicable Time of Delivery, in form and substance satisfactory to you;
(d) On the date of the Prospectus at a time prior to the execution of this Agreement, at 9:30
a.m., New York City time, on the effective date of any post-effective amendment to the
Registration Statement filed subsequent to the date of this Agreement and also at the applicable
Time of Delivery, Ernst & Young LLP shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in form and substance satisfactory to you, to the effect set
forth in
Annex III
hereto;
(e) Neither the Company nor any of its subsidiaries shall have sustained since the date of
the latest audited financial statements included or incorporated by reference in the Pricing
Disclosure Package and the Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set forth or contemplated in
the Pricing Disclosure Package and the Prospectus, and (ii) since the respective dates as of which
information is given in the Pricing Disclosure Package and the Prospectus there shall not have
been any change in the capital stock or long-term debt of the Company or any of its subsidiaries
or any change, or any development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders’ equity, assets or results of operations of
the Company or its subsidiaries, taken as a whole, otherwise than as set forth or contemplated in
the Pricing Disclosure Package and the Prospectus, the effect of which, in any such case described
in clause (i) or (ii), is in the judgment of the Underwriters so
17
material and adverse as to make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Securities being delivered at the Time of Delivery on the terms
and in the manner contemplated in the Pricing Disclosure Package and the Prospectus;
(f) On or after the Applicable Time (i) no downgrading shall have occurred in the rating
accorded the Company’s debt securities by any “nationally recognized statistical rating
organization”, as that term is defined by the Commission for purposes of Rule 436(g)(2) under the
Act, and (ii) no such organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company’s debt securities;
(g) On or after the Applicable Time there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the Exchange; (ii) a
suspension or material limitation in trading in the Company’s securities on the Exchange; (iii) a
general moratorium on commercial banking activities declared by either Federal or New York State
authorities or a material disruption in commercial banking or securities settlement or clearance
services in the United States; (iv) the outbreak or escalation of hostilities involving the United
States or the declaration by the United States of a national emergency or war or (v) the
occurrence of any other calamity or crisis or any change in financial, political or economic
conditions in the United States or elsewhere, if the effect of any such event specified in clause
(iv) or (v) in the judgment of the Underwriters makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Securities being delivered at the Time of Delivery
on the terms and in the manner contemplated in the Pricing Disclosure Package and the Prospectus;
(h) The Company shall have obtained and delivered to the Underwriters executed copies of a
lock-up agreement from each of the directors of the Company and the executive officers of the
Company, in the form attached hereto as
Annex I
, which shall be in full force and effect;
(i) The Company shall have complied with the provisions of
Section 3(c)
hereof with
respect to the furnishing of prospectuses on the business day next succeeding the date of this
Agreement;
(j) The Company shall have furnished or caused to be furnished to you at the applicable Time
of Delivery certificates of officers of the Company, respectively, satisfactory to you as to the
accuracy of the representations and warranties of the Company herein at and as of the Time of
Delivery, as to the performance by the Company of all of its obligations hereunder to be performed
at or prior to the Closing Date and the applicable Time of Delivery, and as to such other matters
as you may reasonably request, and the Company shall have furnished or caused to be furnished
certificates as to the matters set forth in subsections (a) and (e) of this
Section 6
; and
(k) T. Andrew Smith, Executive Vice President, General Counsel and Secretary of the Company,
shall have furnished to you his written opinion (a draft of which is attached as
Annex
II(d)
hereto), dated the applicable Time of Delivery, in form and substance satisfactory to
you;
18
(l) The Indenture shall have been duly executed and delivered by the Company and the Trustee,
and the Securities shall have been duly executed and delivered by the Company and duly
authenticated by the Trustee; and
(m) The Underlying Securities issuable upon conversion of the Securities shall have been
approved for listing on the Exchange, subject only to notice of issuance.
7.
Indemnification and Contribution.
(a) The Company will indemnify and hold harmless each Underwriter against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, the Pricing Disclosure Package or the
Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus or any
“issuer information” filed or required to be filed pursuant to Rule 433(d) under the Act, or arise
out of or are based upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading, and will reimburse
such Underwriter for any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as such expenses are incurred;
provided, however, that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in the Registration Statement, the Pricing
Disclosure Package or the Prospectus, or any amendment or supplement thereto, or any Issuer Free
Writing Prospectus, in reliance upon and in conformity with written information furnished to the
Company by the Underwriter expressly for use therein, it being understood and agreed that the only
such information furnished by the Underwriters consists of the information described as such in
Section 7(b)
.
(b) The written information furnished to the Company by the Underwriters expressly for use in
the Registration Statement, the Pricing Disclosure Package or the Prospectus, or any such
amendment or supplement thereto, or any Issuer Free Writing
Prospectus, consists solely of the information appearing in the list
of names of each of the Underwriters under the caption
“Underwriting” in, and the
concession percentage set forth in the first sentence of the first
paragraph of the subsection
captioned “Underwriting—Commissions and Discounts” in the Preliminary Prospectus and the
Prospectus; and the first paragraph and the second sentence of the second paragraph of the subsection
captioned “Underwriting—Price Stabilization, Short Positions” in the Preliminary Prospectus and
the Prospectus. The Company hereby acknowledges that such information is the only information
that the Underwriters have furnished to the Company for such use.
(c) The Underwriters will indemnify and hold harmless the Company against any losses, claims,
damages or liabilities to which the Company may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement, the Pricing Disclosure Package or the Prospectus, or any amendment
or supplement thereto, or any Issuer Free Writing Prospectus or arise out of or are based upon the
omission or alleged omission to state therein a material fact
19
required to be stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration Statement, the Pricing
Disclosure Package or the Prospectus or any amendment or supplement thereto, or any Issuer Free
Writing Prospectus, in reliance upon and in conformity with written information furnished to the
Company by the Underwriters expressly for use therein; and will reimburse the Company for any
legal or other expenses reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection (a) or (c) above of
notice of the commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the failure to so notify the
indemnifying party shall not relieve it from any liability which it may have to any indemnified
party otherwise than under such subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such subsection for any
legal expenses of other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment with respect to,
any pending or threatened action or claim in respect of which indemnification or contribution may
be sought hereunder (whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action or claim and (ii)
does not include a statement as to or an admission of fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(e) If the indemnification provided for in this
Section 7
is unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or (c) above in respect of
any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other from the offering of the Securities. If, however,
the allocation provided by the immediately preceding sentence is not permitted by applicable law
or if the indemnified party failed to give the notice required under subsection (d) above, then
each indemnifying party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits but also the
relative fault of the Company on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable considerations.
20
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. The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company on the one hand
or the Underwriters on the other and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. The Company and
each Underwriter agree that it would not be just and equitable if contributions pursuant to this
subsection (e) were determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this subsection (e).
The amount paid or payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this subsection (e) shall be
deemed to include any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (e), each Underwriter shall not be required to contribute any amount
in excess of the amount by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(f) The obligations of the Company under this
Section 7
shall be in addition to any
liability which the Company may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any of the Underwriters within the meaning of the
Act; and the obligations of each Underwriter under this
Section 7
shall be in addition to
any liability which such Underwriter may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company (including any person who, with his or her
consent, is named in the Registration Statement as about to become a director of the Company) and
to each person, if any, who controls the Company within the meaning of the Act.
8. The respective indemnities, agreements, representations, warranties and other statements of
the Company and each Underwriter, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf of an Underwriter
or any controlling person of such Underwriter, or the Company, or any officer or director or
controlling person of the Company, and shall survive delivery of and payment for the Securities.
9. If for any reason any Securities are not delivered by the Company as provided herein, the
Company will reimburse the Underwriters for all out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Securities not so delivered.
21
10. If one or more of the Underwriters shall fail on the Closing Date or a Date of
Delivery to purchase the Securities which it or they are obligated to purchase under this Agreement
(the “
Defaulted Securities”),
the Representatives shall have the right, within 24 hours thereafter,
to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters,
to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the aggregate principal
amount of the Securities to be purchased on such date, each of the non-defaulting Underwriters
shall be obligated, severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the aggregate principal amount of the
Securities to be purchased on such date, this Agreement or, with respect to any Date of Delivery
which occurs after the Closing Time, the obligation of the Underwriters to purchase, and the
Company to sell, the Option Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting Underwriter from
liability in respect of its default.
In the event of any such default which does not result in a termination of this Agreement or,
in the case of a Date of Delivery which is after the Closing Time, which does not result in a
termination of the obligation of the Underwriters to purchase and the Company to sell the relevant
Option Securities, as the case may be, either the (i) Representatives or (ii) the Company shall
have the right to postpone Closing Date or the relevant Date of Delivery, as the case may be, for a
period not exceeding seven days in order to effect any required changes in the Registration
Statement, the General Disclosure Package or the Prospectus or in any other documents or
arrangements. As used herein, the term “Underwriter” includes any person substituted for an
Underwriter under this
Section 10
.
11. All statements, requests, notices and agreements hereunder shall be in writing and shall
be delivered or sent by mail, telex or facsimile transmission to the following addresses:
If to the Underwriters, to:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
One Bryant Park
New York, New York 10036
Attention: Syndicate Department
and
J.P. Morgan Securities LLC
22
383 Madison Avenue
New York, New York 10179
Attention: Syndicate Department
and
RBC Capital Markets, LLC
3 World Financial Center
200 Vesey Street, 8th Floor
New York, New York 10281
Attention: Equity Syndicate
with a copy (which shall not constitute notice) to:
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, New York 10019
Attention: Steven A. Seidman and Jeffrey S. Hochman
If to the Company, to:
The address of the Company set forth in the Registration Statement, Attention: Secretary
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
Attention: Joseph Coco
Any such statements, requests, notices or agreements shall take effect upon receipt thereof.
12. This Agreement shall be binding upon, and inure solely to the benefit of, each
Underwriter, the Company and, to the extent provided in
Sections 7
and
8
hereof,
the officers and directors of the Company and each person who controls the Company or an
Underwriter, along with their respective heirs, executors, administrators, successors and assigns,
and no other person shall acquire or have any right under or by virtue of this Agreement. No
purchaser of any of the Securities from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
13. The Company acknowledges and agrees that (a) the purchase and sale of the Securities
pursuant to this Agreement, including the determination of the initial public offering price of the
Securities and any related discounts and commissions, is an arm’s-length commercial transaction
between the Company, on the one hand, and the several Underwriters, on the other
23
hand, (b) in connection with the offering of the Securities and the process leading thereto,
each Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of
the Company, any of its subsidiaries or their respective stockholders, creditors, employees or any
other party, (c) no Underwriter has assumed or will assume an advisory or fiduciary responsibility
in favor of the Company with respect to the offering of the Securities or the process leading
thereto (irrespective of whether such Underwriter has advised or is currently advising the Company
or any of its subsidiaries on other matters) and no Underwriter has any obligation to the Company
with respect to the offering of the Securities except the obligations expressly set forth in this
Agreement, (d) the Underwriters and their respective affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Company and (e) the Underwriters
have not provided any legal, accounting, regulatory or tax advice with respect to the offering of
the Securities and the Company has consulted its own respective legal, accounting, regulatory and
tax advisors to the extent it deemed appropriate.
14. This Agreement constitutes the entire understanding of the parties hereto and supersedes
all prior agreements or understandings with respect to the subject matter hereof among such
parties. This Agreement may be amended, and the observance of any term of this Agreement may be
waived, with (and only with) the written consent of all of the parties hereto.
15. Time shall be of the essence of this Agreement.
16. For purposes of this Agreement, (a) the terms “
affiliate
” and “
subsidiary
” shall have the
respective meanings set forth in Rule 405 under the Act; and (b) the term “
business day
” shall mean
any day when the Commission’s office in Washington, D.C. is open for business.
17. THE COMPANY (ON ITS BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF
ITS STOCKHOLDERS AND AFFILIATES) AND EACH OF THE UNDERWRITERS HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
18. The invalidity or unenforceability of any Section, paragraph or provision of this
Agreement shall not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and
only such minor changes) as are necessary to make it valid and enforceable.
19. This Agreement shall be governed by and construed in accordance with the laws of the State
of New York, without regard to the conflicts of law principles thereof.
20. This Agreement may be executed by any one or more of the parties hereto in any number of
counterparts, each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.
21. Notwithstanding anything herein to the contrary, the Company is authorized to disclose to
any persons the U.S. federal and state income tax treatment and tax structure of the
24
potential transaction and all materials of any kind (including tax opinions and other tax
analyses) provided to the Company relating to that treatment and structure, without the
Underwriters imposing any limitation of any kind. However, any information relating to the tax
treatment and tax structure shall remain confidential (and the foregoing sentence shall not apply)
to the extent necessary to enable any person to comply with securities laws. For this purpose,
“
tax structure
” is limited to any facts that may be relevant to that treatment.
[The remainder of this page has been intentionally left blank.]
25
If the foregoing is in accordance with your understanding, please sign and return to us
one for the Company and each Underwriter, plus one for each counsel, if any counterparts hereof,
and upon the acceptance hereof by you, this letter and such acceptance hereof shall constitute a
binding agreement among each of the Underwriters and the Company.
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Very truly yours,
BROOKDALE SENIOR LIVING INC.
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By:
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/s/ T. Andrew Smith
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Name:
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T. Andrew Smith
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Title:
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EVP
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Accepted as of the date hereof:
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
J.P. MORGAN SECURITIES LLC
as Representatives of the several Underwriters
named in Schedule I hereto
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BY:
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MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
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By:
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/s/
Gray Hampton
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Name:
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Gray Hampton
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Title:
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Managing Director
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BY:
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J.P. MORGAN SECURITIES LLC
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By:
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/s/
Santosh Sreenivasan
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Name:
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Santosh Sreenivasan
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Title:
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Managing Director
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[Signature Page — Underwriting Agreement]
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Accepted as of the date hereof:
RBC CAPITAL MARKETS, LLC
as one of the several Underwriters
named in Schedule I hereto
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By:
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/s/ Hratch Manavian
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Name:
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Hratch Manavian
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Title:
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Director
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[Signature Page — Underwriting Agreement]
SCHEDULE I
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Principal Amount of Initial
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Underwriter
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Securities
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Merrill Lynch, Pierce, Fenner & Smith
Incorporated
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$ 137,500,000
|
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J.P. Morgan Securities LLC
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$ 82,500,000
|
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RBC Capital Markets, LLC
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$ 34,375,000
|
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CSCA Capital Advisors, LLC
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$ 13,750,000
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Stifel, Nicolaus & Company, Incorporated
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$ 6,875,000
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Total
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$ 275,000,000
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SCHEDULE II(a)
Issuer Free Writing Prospectuses Not Included in the Pricing Disclosure Package
None.
SCHEDULE II(b)
Issuer Free Writing Prospectuses Included in the Pricing Disclosure Package
1. Final Pricing Term Sheet (Issuer Free Writing Prospectus dated June 8, 2011 relating to the Preliminary Prospectus Supplement dated June 7, 2011)
SCHEDULE III
Subsidiaries of the Company
1. Brookdale Living Communities, Inc.
2. FEBC-ALT Investors, LLC
3. FEBC-ALT Holdings Inc.
4. Brookdale Senior Living Communities, Inc.
5. Fortress CCRC Acquisition LLC
6. American Retirement Corporation
7. ARC Brandywine, L.P.
8. ARC Management, LLC
9. Lake Seminole Square Management Company, Inc.
10. ARCLP Charlotte, LLC
11. AH Battery Park Owner, LLC
12. AHC Purchaser, Inc.
ANNEX I
Form of “Lock-Up” Agreement
[See Attached]
Brookdale Senior Living Inc.
Lock-Up Agreement
June __, 2011
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
J.P. MORGAN SECURITIES LLC
as Representatives of the several Underwriters
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
One Bryant Park
New York, New York 10036
c/o J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
Re: Brookdale Senior Living Inc. — Lock-Up Agreement
Ladies and Gentlemen:
The undersigned understands that you, as representatives (the “Representatives”) of the
Underwriters (the “Underwriters”) propose to enter into an Underwriting Agreement with Brookdale
Senior Living Inc., a Delaware corporation (the “Company”), providing for a public offering (the
“Offering”) of $275 million aggregate principal amount of the Company’s 2.75% Convertible Senior
Notes due 2018 (the “Initial Securities”) and, at the option of the Underwriters, up to an
additional $41.25 million of the Company’s 2.75% Convertible Senior Notes due 2018 (together with
the Initial Securities, the “Securities”) to cover over-allotments, if any. The Offering is to be
made pursuant to an automatic shelf Registration Statement on Form S-3 filed with the Securities
and Exchange Commission (the “SEC”).
In consideration of the agreement by the Underwriters to offer and sell the Securities, and of
other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged,
the undersigned agrees that, during the period beginning from the date hereof and continuing to and
including the date 60 days after the public offering date set forth on the final prospectus used to
sell the Securities pursuant to the Underwriting Agreement (the “Lock-Up Period”), the undersigned
will not offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale
or otherwise dispose of (nor make any public announcement of its intention to engage in any of the
foregoing), any shares of common stock, par value $0.01 per share (“Common Stock”), or any
securities of the Company that are substantially similar to the Securities, or any options or
warrants to purchase any shares of Common Stock of the Company, or any securities convertible into,
exchangeable for or that represent the right to receive shares of
Common Stock of the Company, whether now owned or hereinafter acquired, owned directly by the
undersigned or with respect to which the undersigned has beneficial ownership within the rules and
regulations of the SEC (collectively the “Undersigned’s Shares”). The foregoing restriction is
expressly agreed to preclude the undersigned from engaging in any hedging or other transaction
which is designed to or which reasonably could be expected to lead to or result in a sale or
disposition of the Undersigned’s Shares even if such Shares would be disposed of by someone other
than the undersigned. Such prohibited hedging or other transactions would include without
limitation any short sale or any purchase, sale or grant of any right (including without limitation
any put or call option), in each case, with respect to any of the Undersigned’s Shares or with
respect to any security that includes, relates to, or derives any significant part of its value
from such Undersigned’s Shares.
Notwithstanding the foregoing, the undersigned may transfer the Undersigned’s Shares (i)
pursuant to any contract, instruction or plan, including a contract, instruction or plan complying
with Rule 10b5-1 of the Regulations of the Securities Exchange Act of 1934, as amended, that has
been entered into by the Undersigned prior to or on the date of this Lock-Up Agreement or any
amendment or replacement of any such contract, instruction or plan, so long as the number of the
Undersigned’s Shares subject to such contract, instruction or plan is not increased; (ii) as a bona
fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the
restrictions set forth herein, (iii) to any trust for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned, provided that the trustee or trustees of
such trust agree to be bound in writing by the restrictions set forth herein, and, provided further
that any such transfer shall not involve a disposition for value; or (iv) with the prior written
consent of the Representatives. For purposes of this Lock-Up Agreement, “immediate family” shall
mean any relationship by blood, marriage or adoption, not more remote than first cousin. In
addition, notwithstanding the foregoing, if the undersigned is a corporation, limited partnership
or limited liability company, the entity may transfer the capital stock of the Company to any
wholly-owned subsidiary of such entity;
provided
,
however
, that in any such case,
it shall be a condition to the transfer that the transferee execute an agreement stating that the
transferee is receiving and holding such capital stock subject to the provisions of this Lock-Up
Agreement and there shall be no further transfer of such capital stock except in accordance with
this Lock-Up Agreement, and provided further that any such transfer shall not involve a disposition
for value. The Undersigned now has, and, except as contemplated by clause (i), (ii), (iii) or (iv)
above, for the duration of this Lock-Up Agreement will have, good and marketable title to the
Undersigned’s Shares, free and clear of all liens, encumbrances, and claims whatsoever. The
Undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s
transfer agent and registrar against the transfer of the Undersigned’s Shares except in compliance
with the foregoing restrictions.
The undersigned understands that the Company and the Underwriters are relying upon this
Lock-Up Agreement in proceeding toward consummation of the Offering. The undersigned further
understands that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned’s
heirs, legal representatives, successors, and assigns.
[SIGNATURE PAGE FOLLOWS]
- 2 -
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Very truly yours,
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Name:
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Title:
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[SIGNATURE PAGE TO LOCK-UP AGREEMENT]
ANNEX II(a)
Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
[On file with the Representatives]
ANNEX II(b)
Tax Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
[On file with the Representatives]
ANNEX II(c)
Negative Assurance Letter of Skadden, Arps, Slate, Meagher & Flom LLP
[On file with the Representatives]
ANNEX II(d)
Opinion of T. Andrew Smith, Executive Vice President, General Counsel and Secretary of the Company
[On file with the Representatives]
ANNEX III
Comfort Letter of Ernst & Young LLP
[On file with the Representatives]
EXHIBIT 4.1
Execution Copy
BROOKDALE SENIOR LIVING INC.
INDENTURE
Dated as of June 14, 2011
AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC,
as
Trustee
TABLE OF CONTENTS
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Page
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ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE
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1
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Section 1.1 Definitions
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1
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Section 1.2 Other Definitions
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5
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Section 1.3 Incorporation by Reference of Trust Indenture Act
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5
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Section 1.4 Rules of Construction
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5
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ARTICLE 2 THE SECURITIES
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6
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Section 2.1 Issuable in Series
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6
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Section 2.2 Establishment of Terms of Series of Securities
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6
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Section 2.3 Execution and Authentication
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8
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Section 2.4 Registrar and Paying Agent
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9
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Section 2.5 Paying Agent to Hold Money in Trust
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10
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Section 2.6 Securityholder Lists
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10
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Section 2.7 Exchange and Registration of Transfer
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10
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Section 2.8 Mutilated, Destroyed, Lost and Stolen Securities
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11
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Section 2.9 Outstanding Securities
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11
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Section 2.10 Treasury Securities
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12
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Section 2.11 Temporary Securities
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12
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Section 2.12 Cancellation
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12
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Section 2.13 Defaulted Interest
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12
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Section 2.14 Registered Global Securities
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13
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Section 2.15 Computation of Interest
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14
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Section 2.16 CUSIP and ISIN Numbers
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14
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ARTICLE 3 REDEMPTION
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14
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Section 3.1 Notice to Trustee
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14
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Section 3.2 Selection of Securities to be Redeemed
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14
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Section 3.3 Notice of Redemption
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15
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Section 3.4 Effect of Notice of Redemption
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15
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Section 3.5 Deposit of Redemption Price
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15
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Section 3.6 Securities Redeemed in Part
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15
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ARTICLE 4 COVENANTS
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16
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Section 4.1 Payment of Principal and Interest
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16
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Section 4.2 SEC Reports
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16
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Section 4.3 Compliance Certificate
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16
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Section 4.4 Stay, Extension and Usury Laws
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16
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Section 4.5 Corporate Existence
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16
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Section 4.6 Maintenance of Office or Agency
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16
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Section 4.7 Money For Securities Payments to be Held in Trust
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17
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Section 4.8 Waiver of Certain Covenants
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18
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ARTICLE 5 SUCCESSORS
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18
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Section 5.1 When Company May Merge, Etc.
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18
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Section 5.2 Successor Corporation Substituted
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18
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ARTICLE 6 DEFAULTS AND REMEDIES
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18
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Section 6.1 Events of Default
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18
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Section 6.2 Acceleration of Maturity; Rescission and Annulment
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20
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Section 6.3 Collection of Indebtedness and Suits for Enforcement by Trustee
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21
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Section 6.4 Trustee May File Proofs of Claim
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22
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Section 6.5 Trustee May Enforce Claims Without Possession of Securities
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22
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i
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Page
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Section 6.6 Application of Money Collected
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22
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Section 6.7 Limitation on Suits
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23
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Section 6.8 Unconditional Right of Holders to Receive Principal and Interest
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23
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Section 6.9 Restoration of Rights and Remedies
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23
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Section 6.10 Rights and Remedies Cumulative
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24
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Section 6.11 Delay or Omission Not Waiver
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24
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Section 6.12 Control by Holders
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24
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Section 6.13 Waiver of Past Defaults
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24
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Section 6.14 Undertaking for Costs
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24
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ARTICLE 7 TRUSTEE
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25
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Section 7.1 Duties of Trustee
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25
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Section 7.2 Rights of Trustee
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26
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Section 7.3 Individual Rights of Trustee
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27
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Section 7.4 Trustee’s Disclaimer
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27
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Section 7.5 Notice of Defaults
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27
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Section 7.6 Reports by Trustee to Holders
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27
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Section 7.7 Compensation and Indemnity
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27
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Section 7.8 Replacement of Trustee
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28
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Section 7.9 Successor Trustee by Merger, etc.
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29
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Section 7.10 Eligibility; Disqualification
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29
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Section 7.11 Preferential Collection of Claims Against Company
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29
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ARTICLE 8 SATISFACTION AND DISCHARGE; DEFEASANCE
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29
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Section 8.1 Satisfaction and Discharge of Indenture
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29
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Section 8.2 Application of Trust Funds; Indemnification
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30
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Section 8.3 Legal Defeasance of Securities of any Series
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31
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Section 8.4 Covenant Defeasance
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32
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Section 8.5 Repayment to Company
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33
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Section 8.6 Effect of Subordination Provisions
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33
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ARTICLE 9 AMENDMENTS AND WAIVERS
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33
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Section 9.1 Without Consent of Holders
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33
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Section 9.2 With Consent of Holders
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34
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Section 9.3 Limitations
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34
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Section 9.4 Compliance with Trust Indenture Act
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35
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Section 9.5 Revocation and Effect of Consents
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35
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Section 9.6 Notation on or Exchange of Securities
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35
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Section 9.7 Trustee Protected
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36
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ARTICLE 10 SUBORDINATION OF SECURITIES
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36
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Section 10.1 Agreement to Subordinate
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36
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ARTICLE 11 MISCELLANEOUS
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36
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Section 11.1 Trust Indenture Act Controls
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36
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Section 11.2 Notices
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36
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Section 11.3 Communication by Holders with Other Holders
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37
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Section 11.4 Certificate and Opinion as to Conditions Precedent
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37
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Section 11.5 Statements Required in Certificate or Opinion
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37
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Section 11.6 Rules by Trustee and Agents
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38
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Section 11.7 Legal Holidays
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38
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Section 11.8 No Recourse Against Others
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38
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Section 11.9 Counterparts
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38
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Section 11.10 Governing Laws; Waiver of Jury Trial
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38
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Section 11.11 No Adverse Interpretation of Other Agreements
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38
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Section 11.12 Successors
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38
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ii
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Page
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Section 11.13 Severability
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39
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|
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Section 11.14 Table of Contents, Headings, Etc.
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39
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|
Section 11.15 Securities in a Foreign Currency or in ECU
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39
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Section 11.16 Judgment Currency
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39
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Section 11.17 Acts of Holders
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40
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ARTICLE 12 SINKING FUNDS
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41
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Section 12.1 Applicability of Article
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41
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Section 12.2 Satisfaction of Sinking Fund Payments with Securities
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41
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Section 12.3 Redemption of Securities for Sinking Fund
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41
|
|
iii
BROOKDALE SENIOR LIVING INC.
Reconciliation and tie between Trust Indenture Act of 1939 and Indenture, dated as of June 14, 2011.
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|
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§ 310(a)(1)
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7.10
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(a)(2)
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7.10
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(a)(3)
|
|
Not Applicable
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(a)(4)
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|
Not Applicable
|
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(a)(5)
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|
7.10
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(b)
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|
7.10
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§ 311(a)
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7.11
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(b)
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|
7.11
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|
(c)
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|
Not Applicable
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|
§ 312(a)
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2.6
|
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(b)
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11.3
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(c)
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11.3
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|
§ 313(a)
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7.6
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(b)(1)
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7.6
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(b)(2)
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7.6
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(c)
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7.6
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(d)
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7.6
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§ 314(a)
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|
4.2, 4.3
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|
(b)
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Not Applicable
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(c)(1)
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11.4
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(c)(2)
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|
11.4
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(c)(3)
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Not Applicable
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(d)
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|
Not Applicable
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(e)
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11.5
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(f)
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|
Not Applicable
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|
§ 315(a)
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7.1
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(b)
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7.5
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(c)
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7.1
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(d)
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7.1
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(e)
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|
6.14
|
|
§ 316(a)
|
|
2.10
|
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(a)(1)(A)
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|
6.12
|
|
(a)(1)(B)
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|
6.13
|
|
(b)
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|
6.8
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|
§ 317(a)(1)
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6.3
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(a)(2)
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6.4
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(b)
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2.5
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§ 318(a)
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11.1
|
Note: This reconciliation and tie shall not, for any purpose, be deemed to be part of the
Indenture.
Indenture dated as of June 14, 2011, between Brookdale Senior Living Inc., a Delaware corporation
(the “Company”), and American Stock Transfer & Trust Company, LLC, a New York limited liability trust company, as trustee hereunder (the “Trustee”).
Each party agrees as follows for the benefit of the other party and for the equal and ratable
benefit of the Holders of the Securities issued under this Indenture.
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1
Definitions.
“Additional Amounts” means any additional amounts which are required hereby or by any
Security, under circumstances specified herein or therein, to be paid by the Company in respect of
certain taxes imposed on Holders specified therein and which are owing to such Holders.
“Affiliate” of any specified Person means any other Person, directly or indirectly,
controlling or controlled by or under direct or indirect common control with such specified Person.
For the purposes of this definition, “control” when used with respect to any 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.
“Agent” means any Registrar, Paying Agent, co-agent, co-registrar or Service Agent.
“Authorized Newspaper” means a newspaper in an official language of the country of publication
customarily published at least once a day for at least five days in each calendar week and of
general circulation in the place in connection with which the term is used. If it shall be
impractical in the opinion of the Trustee to make any publication of any notice required hereby in
an Authorized Newspaper, any publication or other notice in lieu thereof that is made or given by
the Trustee shall constitute a sufficient publication of such notice.
“Bearer” means anyone in possession from time to time of a Bearer Security.
“Bearer Global Security” or “Bearer Global Securities” means a Bearer Security or Securities,
as the case may be, in the form established pursuant to Section 2.2 evidencing all or part of a
Series of Bearer Securities, deposited with a common depositary for Euroclear Bank S.A./N.V., as
operator of the Euroclear System and/or Clearstream Banking, société anonyme, Luxembourg.
“Bearer Security” means any Security, including any interest coupon appertaining thereto, that
does not provide for the identification of the Holder thereof.
“Board of Directors” means the Board of Directors of the Company or any duly authorized
committee thereof.
“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Company to have been adopted by the Board of Directors or pursuant to
authorization by the Board of Directors and to be in full force and effect on the date of the
certificate and delivered to the Trustee.
“Business Day” means, unless otherwise provided by Board Resolution, Officers’ Certificate or
supplemental indenture hereto for a particular Series, each day which is not a Legal Holiday.
“Capital Stock” of any Person means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in (however designated)
equity of such Person, including any Preferred Stock, but excluding any debt securities convertible
into such equity.
“Company” means the party named as such above until a successor replaces it and thereafter
means the successor.
“Company Order” means a written order signed in the name of the Company by two Officers, one
of whom must be the Company’s principal executive officer, principal financial officer or principal
accounting officer.
“Company Request” means a written request signed in the name of the Company by its Chairman of
the Board, a President or a Vice President, and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Trustee.
“Corporate Trust Office” means the office of the Trustee at which at any particular time its
corporate trust business shall be principally administered.
“Debt” of any Person as of any date means, without duplication, all indebtedness of such
Person in respect of borrowed money, including all interest, fees and expenses owed in respect
thereto (whether or not the recourse of the lender is to the whole of the assets of such Person or
only to a portion thereof), or evidenced by bonds, notes, debentures or similar instruments.
“Default” means any event which is, or after notice or passage of time would be, an Event of
Default.
“Depositary” means, with respect to the Securities of any Series issuable or issued in whole
or in part in the form of one or more Securities in global form, the Person designated as
Depositary for such Series by the Company, which Depositary shall be a clearing agency registered
under the Exchange Act; and if at any time there is more than one such Person, “Depositary” as used
with respect to the Securities of any Series shall mean the Depositary with respect to the
Securities of such Series.
“Discount Security” means any Security that provides for an amount less than the stated
principal amount thereof to be due and payable upon declaration of acceleration of the maturity
thereof pursuant to Section 6.2.
“Dollars” means the currency of the United States of America.
“ECU” means the European Currency Unit as determined by the Commission of the European Union.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Foreign Currency” means any currency or currency unit issued by a government other than the
government of the United States of America.
“Foreign Government Obligations” means with respect to Securities of any Series that are
denominated in a Foreign Currency, (i) direct obligations of the government that issued or caused
to be issued such currency for the payment of which obligations its full faith and credit is
pledged or (ii) obligations of a Person controlled or supervised by or acting as an agency or
instrumentality of such government the timely payment of which is unconditionally guaranteed as a
full faith and credit obligation by such government, which, in either case under clauses (i) or
(ii), are not callable or redeemable at the option of the issuer thereof.
“Holder” or “Securityholder” means a Person in whose name a Security is registered in the
Register or the holder of a Bearer Security.
“Indenture” means this Indenture as originally executed and delivered and as amended from time
to time and shall include the form and terms of particular Series of Securities established as
contemplated hereunder.
2
“interest” with respect to any Discount Security which by its terms bears interest only after
Maturity, means interest payable after Maturity.
“Maturity,” when used with respect to any Security or installment of principal thereof, means
the date on which the principal of such Security or such installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, notice of option to elect repayment or otherwise.
“Officer” means the Chairman of the Board, the Chief Executive Officer, the Chief Financial
Officer, the President, any Vice-President, the Treasurer, the Secretary, any Assistant Treasurer
or any Assistant Secretary of the Company.
“Officers’ Certificate” means a certificate signed by two Officers, one of whom must be the
Company’s principal executive officer, principal financial officer or principal accounting officer.
“Opinion of Counsel” means a written opinion of legal counsel who is reasonably acceptable to
the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee.
“Person” means any individual, corporation, partnership, joint venture, association, limited
liability company, joint-stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.
“Place of Payment”, when used with respect to the Securities of any Series, means the place or
places specified in accordance with Section 2.2 where the principal of and any premium and interest
on the Securities of that Series are payable, or if not so specified, in accordance with Section
4.6.
“Preferred Stock”, as applied to the Capital Stock of any Person, means Capital Stock of any
class or classes (however designated) that is preferred as to the payment of dividends, or as to
the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over shares of Capital Stock of any other class of such Person.
“principal” of a Security means the principal of the Security plus, when appropriate, the
premium, if any, on, and any Additional Amounts in respect of, the Security.
“Registered Global Security” or “Registered Global Securities” means a Security or Securities,
as the case may be, in the form established pursuant to Section 2.2 evidencing all or part of a
Series of Securities, issued to the Depositary for such Series or its nominee, and registered in
the name of such Depositary or nominee.
“Registered Securities” means any Security registered on the Register of the Company.
“SEC” means the Securities and Exchange Commission.
“Securities” means the debentures, notes or other debt instruments of the Company of any
Series authenticated and delivered under this Indenture.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder, as in effect from time to time.
“Senior Debt” means the principal of, premium, if any, unpaid interest, and all fees and other
amounts payable in connection with the following, whether outstanding on the date hereof or
thereafter created, incurred, assumed or guaranteed, on (x) the Debt of the Company, for money
borrowed other than (a) any Debt of the Company which when incurred and without respect to any
election under Section 1111(b) of the Federal Bankruptcy Code, was without recourse to the Company,
(b) any Debt of the Company to any of its Subsidiaries, (c) Debt to any employee of the Company,
(d) any liability for taxes and (e) Trade Payables, unless the instrument creating or evidencing
the same or pursuant to which the same is outstanding provides that such Debt is not senior or
3
prior in right of payment to the Securities, (y) all obligations of the Company under interest
rate, currency and commodity swaps, caps, floors, collars, hedge arrangements, forward contracts or
similar agreements or arrangements and (z) renewals, extensions, modifications and refundings of
any such Debt. This definition may be modified or superseded by a supplemental indenture.
“Senior Securities” means Securities other than Subordinated Securities.
“Series” or “Series of Securities” means each series of debentures, notes or other debt
instruments of the Company created pursuant to Sections 2.1 and 2.2 hereof.
“Stated Maturity” when used with respect to any Security or any installment of principal
thereof or interest thereon, means the date specified in such Security as the fixed date on which
the principal of such Security or such installment of principal or interest is due and payable
(without regard for any provisions for acceleration, redemption prepayment or otherwise).
“Subordinated Securities” means Securities that by the terms established pursuant to Section
2.2.9 are subordinated in right of payment to Senior Debt of the Company.
“Subordination Provisions,” when used with respect to the Subordinated Securities of any
Series, shall have the meaning established pursuant to Section 2.2.9 with respect to the
Subordinated Securities of such Series.
“Subsidiary” of any Person means any corporation, association, partnership or other business
entity of which more than 50% of the total voting power of shares of Capital Stock or other
interests (including partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person, (ii) such Person and one or more
Subsidiaries of such Person or (iii) one or more Subsidiaries of such Person.
“TIA” means the Trust Indenture Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb) as in effect on the
date of this Indenture; provided, however, that in the event the Trust Indenture Act of 1939 is
amended after such date, “TIA” means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
“Trade Payables” means accounts payable or any other Debt or monetary obligations to trade
creditors created or assumed by the Company or any Subsidiary of the Company in the ordinary course
of business in connection with the receipt of materials or services.
“Trust Officer” means any officer within the Corporate Trust Office of the Trustee with direct
responsibility for the administration of this Indenture.
“Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument
until a successor Trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee
hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect to
the Securities of any Series shall mean the Trustee with respect to Securities of that Series.
“U.S. Government Obligations” means direct obligations (or certificates representing an
ownership interest in such obligations) of the United States of America (including any agency or
instrumentality thereof) for the payment of which the full faith and credit of the United States of
America is pledged and which are not callable or redeemable at the issuer’s option.
4
Section 1.2
Other Definitions.
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|
|
|
|
|
|
|
|
DEFINED IN
|
|
TERM
|
|
SECTION
|
|
“Bankruptcy Law”
|
|
|
6.1
|
|
|
“Custodian”
|
|
|
6.1
|
|
|
“Event of Default”
|
|
|
6.1
|
|
|
“Journal”
|
|
|
11.15
|
|
|
“Judgment Currency”
|
|
|
11.16
|
|
|
“Legal Holiday”
|
|
|
11.7
|
|
|
“mandatory sinking fund payment”
|
|
|
12.1
|
|
|
“Market Exchange Rate”
|
|
|
11.15
|
|
|
“New York Banking Day”
|
|
|
11.16
|
|
|
“optional sinking fund payment”
|
|
|
12.1
|
|
|
“Paying Agent”
|
|
|
2.4
|
|
|
“Register”
|
|
|
2.4
|
|
|
“Registrar”
|
|
|
2.4
|
|
|
“Required Currency”
|
|
|
11.16
|
|
|
“Service Agent”
|
|
|
2.4
|
|
|
“successor person”
|
|
|
5.1
|
|
Section 1.3
Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part of this Indenture. The following TIA terms used in this Indenture
have the following meanings:
“Commission” means the SEC.
“indenture securities” means the Securities.
“indenture security holder” means a Securityholder.
“indenture to be qualified” means this Indenture.
“indenture trustee” or “institutional trustee” means the Trustee.
“obligor” on the indenture securities means the Company and any successor obligor upon the
Securities.
All other terms used in this Indenture that are defined by the TIA, defined by TIA reference
to another statute or defined by SEC rule under the TIA and not otherwise defined herein are used
herein as so defined.
Section 1.4
Rules of Construction.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it in
accordance with generally accepted accounting principles;
5
(c) references to “generally accepted accounting principles” shall mean generally
accepted accounting principles in effect as of the time when and for the period as to which
such accounting principles are to be applied;
(d) “or” is not exclusive; and
(e) words in the singular include the plural, and in the plural include the singular.
ARTICLE 2
THE SECURITIES
Section 2.1
Issuable in Series.
The aggregate principal amount of Securities that may be authenticated and delivered under
this Indenture is unlimited. The Securities may be issued in one or more Series. All Securities of
a Series shall be identical except as may be set forth in a Board Resolution, a supplemental
indenture or an Officers’ Certificate detailing the adoption of the terms thereof pursuant to the
authority granted under a Board Resolution. In the case of Securities of a Series to be issued
from time to time, the Board Resolution, Officers’ Certificate or supplemental indenture may
provide for the method by which specified terms (such as interest rate, maturity date, record date
or date from which interest shall accrue) are to be determined. Securities may differ between
Series in respect of any matters, provided that all Series of Securities shall be equally and
ratably entitled to the benefits of the Indenture.
Section 2.2
Establishment of Terms of Series of Securities.
At or prior to the issuance of any Securities within a Series, the following shall be
established (as to the Series generally, in the case of Subsection 2.2.1 and either as to such
Securities within the Series or as to the Series generally in the case of Subsections 2.2.2 through
2.2.24) by a Board Resolution, a supplemental indenture or an Officers’ Certificate pursuant to
authority granted under a Board Resolution:
2.2.1 the title and designation of the Securities of the Series, which shall distinguish the
Securities of the Series from the Securities of all other Series, and which may be part of a Series
of Securities previously issued;
2.2.2 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 for, or in lieu of, other Securities of
the Series pursuant to Section 2.7, 2.8, 2.11, 3.6 or 9.6);
2.2.3 if other than Dollars, the Foreign Currency or Foreign Currencies in which the
Securities of the Series are denominated;
2.2.4 the date or dates on which the principal of the Securities of the Series is payable or
the method of determination thereof;
2.2.5 the rate or rates (which may be fixed or variable) at which the Securities of the Series
shall bear interest, if any, the date or dates from which such interest shall accrue, on which such
interest shall be payable, the terms and conditions of any deferral of interest and the additional
interest, if any, thereon, the right, if any, of the Company to extend the interest payment periods
and the duration of the extensions and (in the case of Registered Securities) the date or dates on
which a record shall be taken for the determination of Holders to whom interest is payable and/or
the method by which such rate or rates or date or dates shall be determined;
2.2.6 the place or places where and the manner in which, the principal of and any interest on
Securities of the Series shall be payable;
6
2.2.7 the right, if any, of the Company to redeem Securities, in whole or in part, at its
option and the period or periods within which, or the date or dates on which, the price or prices
at which and any terms and conditions upon which Securities of the Series may be so redeemed,
pursuant to any sinking fund or otherwise;
2.2.8 the obligation, if any, of the Company to redeem, purchase or repay Securities of the
Series pursuant to any mandatory redemption, sinking fund or analogous provisions or at the option
of a Holder thereof and the price or prices at which and the period or periods within which or the
date or dates on which, and any terms and conditions upon which Securities of the Series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such obligation;
2.2.9 if the Securities of such Series are Subordinated Securities, the terms pursuant to
which the Securities of such Series will be made subordinate in right of payment to Senior Debt and
the definition of such Senior Debt with respect to such Series (in the absence of an express
statement to the effect that the Securities of such Series are subordinate in right of payment to
all such Senior Debt, the Securities of such Series shall not be subordinate to Senior Debt and
shall not constitute Subordinated Securities); and, in the event that the Securities of such Series
are Subordinated Securities, such Board Resolution, Officer’s Certificate or supplemental
indenture, as the case may be, establishing the terms of such Series shall expressly state which
articles, sections or other provisions thereof constitute the “Subordination Provisions” with
respect to the Securities of such Series;
2.2.10 if other than denominations of $1,000 and any integral multiple thereof in the case of
Registered Securities, or $1,000 and $5,000 in the case of Bearer Securities, the denominations in
which Securities of the Series shall be issuable;
2.2.11 the percentage of the principal amount at which the Securities will be issued, and, if
other than the principal amount thereof, the portion of the principal amount of Securities of the
Series which shall be payable upon declaration of acceleration of the maturity thereof and the
terms and conditions of any acceleration;
2.2.12 if other than the coin, currency or currencies in which the Securities of the Series
are denominated, the coin, currency or currencies in which payment of the principal of or interest
on the Securities of such Series shall be payable, including composite currencies or currency
units;
2.2.13 if the principal of or interest on the Securities of the Series are to be payable, at
the election of the Company or a Holder thereof, in a coin or currency other than that in which the
Securities are denominated, the period or periods within which, and the terms and conditions upon
which, such election may be made;
2.2.14 if the amount of payments of principal of and interest on the Securities of the Series
may be determined with reference to an index or formula based on a coin, currency, composite
currency or currency unit other than that in which the Securities of the Series are denominated,
the manner in which such amounts shall be determined;
2.2.15 whether the Securities of the Series will be issuable as Registered Securities (and if
so, whether such Securities will be issuable as Registered Global Securities) or Bearer Securities,
with or without interest coupons appertaining thereto (and if, so whether such Securities will be
issuable as Bearer Global Securities), or any combination of the foregoing, any restrictions
applicable to the offer, sale or delivery of Bearer Securities or the payment of interest thereon
and the terms upon which Bearer Securities of any Series may be exchanged for Registered Securities
of such Series and vice versa;
2.2.16 whether and under what circumstances the Company will pay additional amounts on the
Securities of the Series held by a person who is not a U.S. person in respect of any tax,
assessment or governmental charge withheld or deducted and, if so, whether the Company will have
the option to redeem the Securities of the Series rather than pay such additional amounts;
7
2.2.17 if the Securities of the 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, the form and terms of
such certificates, documents or conditions;
2.2.18 any trustees, depositaries, authenticating or paying agents, transfer agents or
registrars of any other agents with respect to the Securities of such Series;
2.2.19 any deletion from, modification of or addition to the Events of Default or covenants
with respect to the Securities of such Series, including, if applicable, covenants affording
Holders of debt protection with respect to the Company’s operations, financial conditions and
transactions involving the Company;
2.2.20 if the Securities of the Series are to be convertible into or exchangeable for any
other security or property of the Company, including, without limitation, securities of another
Person held by the Company or its Affiliates and, if so, the terms thereof, including conversion or
exchange prices or rate and adjustments thereto;
2.2.21 the price or prices at which the Securities will be issued;
2.2.22 any provisions for remarketing;
2.2.23 the terms applicable to any Securities issued at a discount from their stated principal
amount; and
2.2.24 any other terms of the Series.
All Securities of any one Series need not be issued at the same time and may be issued from
time to time, consistent with the terms of this Indenture, if so provided by or pursuant to the
Board Resolution, supplemental indenture or Officers’ Certificate referred to above, and the
authorized principal amount of any Series may not be increased to provide for issuances of
additional Securities of such Series, unless otherwise provided in such Board Resolution,
supplemental indenture or Officers’ Certificate.
Section 2.3
Execution and Authentication.
One or more Officers shall sign the Securities for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Security no longer holds that office at the time the
Security is authenticated, the Security shall be valid nevertheless so long as such individual was
an Officer at the time of execution of the Security.
A Security shall not be valid until authenticated by the manual signature of the Trustee or an
authenticating agent. The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall at any time, and from time to time, authenticate Securities for original
issue in the principal amount provided in the Board Resolution, supplemental indenture hereto or
Officers’ Certificate, upon receipt by the Trustee of a Company Order. Such Company Order may
authorize authentication and delivery pursuant to oral or electronic instructions from the Company
or its duly authorized agent or agents, which oral instructions shall be promptly confirmed
electronically or in writing. Each Security shall be dated the date of its authentication unless
otherwise provided by a Board Resolution, a supplemental indenture hereto or an Officers’
Certificate.
The aggregate principal amount of Securities of any Series outstanding at any time may not
exceed any limit upon the maximum principal amount for such Series set forth in the Board
Resolution, supplemental indenture hereto or Officers’ Certificate delivered pursuant to Section
2.2, except as provided in Section 2.8.
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Prior to the issuance of Securities of any Series, the Trustee shall have received and
(subject to Section 7.2) shall be fully protected in relying on: (a) the Board Resolution,
supplemental indenture hereto or Officers’ Certificate establishing the form of the Securities of
that Series or of Securities within that Series and the terms of the Securities of that Series or
of Securities within that Series, (b) an Officers’ Certificate complying with Section 11.4, and (c)
an Opinion of Counsel complying with Section 11.4.
The Trustee shall have the right to decline to authenticate and deliver any Securities of such
Series: (a) if the Trustee, being advised by counsel, determines that such action may not lawfully
be taken; or (b) if the Trustee in good faith shall determine that such action would expose the
Trustee to personal liability to Holders of any then outstanding Series of Securities.
The Trustee may appoint an authenticating agent reasonably acceptable to the Company to
authenticate the Securities. Any such appointment shall be evidenced by an instrument signed by a
Trust Officer, a copy of which shall be furnished to the Company. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do
so. Each reference in this Indenture to authentication by the Trustee includes authentication by
such agent. An authenticating agent has the same rights as an Agent to deal with the Company or an
Affiliate.
Section 2.4
Registrar and Paying Agent.
The Company shall maintain, with respect to each Series of Securities, at the place or places
specified with respect to such Series pursuant to Section 2.2, an office or agency where Securities
of such Series may be presented or surrendered for payment (“Paying Agent”), where Securities of
such Series may be surrendered for registration of transfer or exchange (“Registrar”) and where
notices and demands to or upon the Company in respect of the Securities of such Series and this
Indenture may be served (“Service Agent”). The Registrar shall keep a register with respect to
each Series of Registered Securities (the “Register”) and to their transfer and exchange. The
Company will give prompt written notice to the Trustee of the name and address, and any change in
the name or address, of each Registrar, Paying Agent or Service Agent. If at any time the Company
shall fail to maintain any such required Registrar, Paying Agent or Service Agent or shall fail to
furnish the Trustee with the name and address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more co-registrars, additional paying
agents or additional service agents 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
obligations to maintain a Registrar, Paying Agent and Service Agent in each place so specified
pursuant to Section 2.2 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
name or address of any such co-registrar, additional paying agent or additional service agent. The
term “Registrar” includes any co-registrar; the term “Paying Agent” includes any additional paying
agent; and the term “Service Agent” includes any additional service agent.
The Company hereby appoints the Trustee the initial Registrar, Paying Agent and Service Agent
for each Series unless another Registrar, Paying Agent or Service Agent, as the case may be, is
appointed prior to the time Securities of that Series are first issued. The Company or any of its
domestically organized Subsidiaries may act as Paying Agent, Registrar or Service Agent.
The rights, privileges, protections, immunities and benefits given to the Trustee under this
Indenture including, without limitation, its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and each Agent acting hereunder.
The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent
or Service Agent not a party to this Indenture, which shall incorporate the terms of the TIA. The
agreement shall implement the provisions of this Indenture that relate to such agent. The Company
shall notify the Trustee of the name and address of any such agent.
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The Company may remove any Registrar, Paying Agent or Service Agent for any Series of Securities
upon written notice to such Registrar, Paying Agent or Service Agent and to the Trustee; provided,
however, that no such removal shall become effective until (1) acceptance of an appointment by a
successor as evidenced by an appropriate agreement entered into by the Company and such successor
Registrar, Paying Agent or Service Agent, as the case may be, and delivered to the Trustee or (2)
notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the
appointment of a successor in accordance with clause (1) above. The Registrar, Paying Agent or
Service Agent may resign at any time upon written notice; provided, however, that the Trustee may
resign as Paying Agent, Registrar or Service Agent only if the Trustee also resigns as Trustee in
accordance with Section 7.8.
Section 2.5
Paying Agent to Hold Money in Trust.
Prior to each due date of the principal and interest on any Series of Securities, the Company
shall deposit with the Paying Agent (or if the Company or a Subsidiary is acting as Paying Agent,
segregate and hold in trust for the benefit of the Persons entitled thereto) a sum sufficient to
pay such principal and interest when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent will hold in trust, for the
benefit of Securityholders of any Series of Securities, or the Trustee, all money held by the
Paying Agent for the payment of principal of or interest on the Series of Securities, and shall
notify the Trustee of any default by the Company in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money held by it to the
Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the
Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of
Securityholders of any Series of Securities all money held by it as Paying Agent.
Section 2.6
Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Securityholders of each Series of Securities and
shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar, the Company shall
furnish, or cause the Registrar to furnish, to the Trustee at least five Business Day before each
interest payment date, but in any event not less frequently than semi-annually, and at such other
times as the Trustee may request in writing a list, in such form and as of such date as the Trustee
may reasonably require, of the names and addresses of Securityholders of each Series of Securities.
Section 2.7
Exchange and Registration of Transfer.
The Company shall cause to be kept at the Corporate Trust Office the Register in which,
subject to such reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities of a Series and of transfers of Securities of such Series. The Register
shall be in written form or in any form capable of being converted into written form within a
reasonably prompt period of time.
Upon surrender for registration of transfer of any Security of a Series to the Registrar or
any co-registrar, and satisfaction of the requirements for such transfer set forth in this Section
2.8, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Security of the same Series of any authorized
denominations and of a like aggregate principal amount and bearing such restrictive legends as may
be required by this Indenture.
Securities of a Series may be exchanged for other Securities of the same Series of any
authorized denominations and of a like aggregate principal amount, upon surrender of the Securities
to be exchanged at any such office or agency maintained by the Company pursuant to Section 4.2.
Whenever any Securities of a Series are so surrendered for exchange, the Company shall execute, and
the Trustee shall authenticate and deliver, the Securities of the same Series that the Holder
making the exchange is entitled to receive bearing registration numbers not contemporaneously
outstanding.
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All Securities of a Series issued upon any registration of transfer or exchange of Securities
of the same Series shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities of the same Series
surrendered upon such registration of transfer or exchange.
All Securities of a Series presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Registrar) be duly endorsed, or be accompanied
by a written instrument or instruments of transfer in form satisfactory to the Company, and the
Securities of such Series shall be duly executed by the Holder thereof or his attorney duly
authorized in writing.
No service charge shall be made to any holder for any registration of, transfer or exchange of
Securities, but the Company or the Trustee may require payment by the holder of a sum sufficient to
cover any tax, assessment or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of such Securities (other than any such transfer tax or
similar governmental charge payable upon exchanges pursuant to Sections 2.11, 3.6 or 9.6).
Neither the Company nor the Trustee nor any Registrar shall be required to exchange, issue or
register a transfer of (a) Securities of any Series for a period of fifteen calendar days next
preceding date of mailing of a notice of redemption of Securities of that Series selected for
redemption, or (b) Securities of any Series or portions thereof called for redemption, except for
the unredeemed portion of any Securities of that Series being redeemed in part.
Section 2.8
Mutilated, Destroyed, Lost and Stolen Securities.
If a mutilated Security is surrendered to the Registrar or if the Securityholder of a Security
claims that the Security has been lost, destroyed or wrongfully taken, the Company shall issue and
the Trustee shall authenticate a replacement Security of the same Series if the requirements of
Section 8-405 of the Uniform Commercial Code are met, such that the Securityholder (i) satisfies
the Company or the Trustee within a reasonable time after he has notice of such loss, destruction
or wrongful taking and the Registrar does not register a transfer prior to receiving such
notification, (ii) makes such request to the Company or the Trustee prior to the Security being
acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a
“protected purchaser”) and (iii) satisfies any other reasonable requirements of the Trustee. If
required by the Trustee or the Company, such Securityholder shall furnish an indemnity bond
sufficient in the judgment of the Trustee to protect the Company, the Trustee, the Paying Agent and
the Registrar from any loss that any of them may suffer if a Security is replaced. The Company and
the Trustee may charge the Securityholder for their expenses in replacing a Security. In case any
Security which has matured or is about to mature or has been called for redemption, shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute
Security, pay or authorize the payment of (without surrender thereof except in the case of a
mutilated Security), as the case may be, if the applicant for such payment or conversion shall
furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such
security or indemnity as may be required by them to save each of them harmless for any loss,
liability, cost or expense caused by or in connection with such substitution, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company, the Trustee and, if
applicable, any Paying Agent evidence to their satisfaction of the destruction, loss or theft of
such Securities and of the ownership thereof.
Every replacement Security of any Series issued pursuant to this Section is an additional
obligation of the Company.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost
or stolen Securities.
Section 2.9
Outstanding Securities.
The Securities outstanding at any time are all the Securities authenticated by the Trustee
except for those canceled by it, those delivered to it for cancellation, those reductions in the
interest on a Registered Global
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Security effected by the Trustee in accordance with the provisions hereof and those described
in this Section as not outstanding. A Security does not cease to be outstanding because the
Company or an Affiliate holds the Security.
If a Security is replaced pursuant to Section 2.8, it ceases to be outstanding unless the
Trustee and the Company receive proof satisfactory to them that the replaced Security is held by a
protected purchaser.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof)
holds on the Maturity of Securities of a Series money sufficient to pay such Securities (or
portions thereof) payable on that date, and the Paying Agent is not prohibited from paying such
money to the Securityholders of such Series on that date pursuant to the terms of the Indenture,
then on and after that date such Securities of the Series (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
In determining whether the Holders of the requisite principal amount of outstanding Securities
have given any request, demand, authorization, direction, notice, consent or waiver hereunder, the
principal amount of a Discount Security that shall be deemed to be outstanding for such purposes
shall be the amount of the principal thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the Maturity thereof pursuant to Section 6.2.
Section 2.10
Treasury Securities.
In determining whether the Holders of the required principal amount of Securities of a Series
have concurred in any direction, waiver or consent, Securities of a Series owned by the Company,
any other obligor upon the Securities or an Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be outstanding, except that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, waiver or consent only Securities
of a Series that the Trustee knows are so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the
Company or any other obligor on the Securities. 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. Upon written request of the Trustee, the Company shall furnish to the Trustee
promptly an Officers’ Certificate listing and identifying all Securities, if any, known by the
Company to be owned or held by or for the account of any of the above-described persons; and,
subject to Sections 7.1 and 7.2, the Trustee shall be entitled to accept such Officers’ Certificate
as conclusive evidence of the facts therein set forth and of the fact that all Securities not
listed therein are outstanding for the purpose of any such determination.
Section 2.11
Temporary Securities.
Pending the preparation of Securities in certificated form, the Company may execute and the
Trustee or an authenticating agent appointed by the Trustee shall, upon a Company Order,
authenticate and deliver temporary Securities (printed, lithographed, typewritten, photocopied or
otherwise produced). Temporary Securities shall be issuable in any authorized denomination, and
substantially in the form of the Securities in certificated form, but with such omissions,
insertions and variations as may be appropriate for temporary Securities, all as may be determined
by the Company. Every such temporary Security shall be executed by the Company and authenticated
by the Trustee or such authenticating agent upon the same conditions and in substantially the same
manner, and with the same effect, as the Securities in certificated form. Without unreasonable
delay, the Company will execute and deliver to the Trustee or such authenticating agent Securities
of the same Series in certificated form and thereupon any or all temporary Securities may be
surrendered in exchange therefor, at each office or agency maintained by the Company pursuant to
Section 4.7 and the Trustee or such authenticating agent shall authenticate and make available for
delivery in exchange for such temporary Securities an equal aggregate principal amount of
Securities of the same Series in certificated form. Such exchange shall be made by the Company at
its own expense and without any charge therefor. Until so exchanged, the temporary Securities
shall in all respects be entitled to the same benefits and subject to the same limitations under
this Indenture as Securities of the same Series in certificated form authenticated and delivered
hereunder.
Section 2.12
Cancellation.
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The Company at any time may deliver Securities to the Trustee for cancellation. The Registrar
and the Paying Agent shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else shall cancel all
Securities surrendered for registration of transfer, exchange, payment, replacement or cancellation
and dispose of such canceled Securities in accordance with its customary procedure. The Company
may not issue new Securities to replace Securities that it has paid or delivered to the Trustee for
cancellation. The Trustee shall not authenticate Securities in place of canceled Securities other
than pursuant to the terms of this Indenture.
Section 2.13
Defaulted Interest.
If the Company defaults in a payment of interest on a Series of Securities, it shall pay the
defaulted interest, plus, to the extent permitted by law, any interest payable on the defaulted
interest, to the Persons who are Securityholders of the Series on a subsequent special record date.
The Company shall fix or cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail, cause to be mailed, or provide by means of electronic transmission to each
Securityholder of the Series a notice that states the special record date, the payment date and the
amount of defaulted interest to be paid. The Company may pay defaulted interest in any lawful
manner.
Section 2.14
Registered Global Securities.
2.14.1
Terms of Securities
. A Board Resolution, a supplemental indenture hereto or an
Officers’ Certificate shall establish whether the Securities of a Series shall be issued in whole
or in part in the form of one or more Registered Global Securities and the Depositary for such
Registered Global Security or Securities.
2.14.2
Transfer and Exchange
. Notwithstanding any provisions to the contrary
contained in Section 2.7 of the Indenture and in addition thereto, any Registered Global Security
shall be exchangeable pursuant to Section 2.7 of the Indenture for Securities registered in the
names of Holders other than the Depositary for such Security or its nominee only if (i) such
Depositary notifies the Company that it is unwilling or unable to continue as Depositary for such
Registered Global Security or if at any time such Depositary ceases to be a clearing agency
registered under the Exchange Act, and, in either case, the Company fails to appoint a successor
Depositary within 90 days of such event or (ii) the Company executes and delivers to the Trustee an
Officers’ Certificate to the effect that such Registered Global Security shall be so exchangeable.
Any Registered Global Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Securities registered in such names as the Depositary shall direct in writing in
an aggregate principal amount equal to the principal amount of the Registered Global Security with
like tenor and terms.
Except as provided in this Section 2.14.2, a Registered Global Security may not be transferred
except as a whole by the Depositary with respect to such Registered Global Security to a nominee of
such Depositary, by a nominee of such Depositary to such Depositary or another nominee of such
Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such
a successor Depositary.
2.14.3
Legend
. Any Registered Global Security issued hereunder shall bear a legend in
substantially the following form:
“This Security is a Registered Global Security within the meaning of the Indenture hereinafter
referred to and is registered in the name of the Depositary or a nominee of the Depositary. This
Security is exchangeable for Securities registered in the name of a Person other than the
Depositary or its nominee only in the limited circumstances described in the Indenture, and may not
be transferred except as a whole by the Depositary to a nominee of the Depositary, by a nominee of
the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such a successor Depositary.”
2.14.4
Acts of Holders
. The Depositary, as a Holder, may appoint agents and otherwise
authorize participants to give or take any request, demand, authorization, direction, notice,
consent, waiver or other action which a Holder is entitled to give or take under the Indenture.
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2.14.5
Payments
. Notwithstanding the other provisions of this Indenture, unless
otherwise specified as contemplated by Section 2.2, payment of the principal of and interest, if
any, on any Registered Global Security shall be made to the Holder thereof.
2.14.6
Consents, Declaration and Directions
. Except as provided in Section 2.14.5,
the Company, the Trustee and any Agent shall treat a Person as the Holder of such principal amount
of outstanding Securities of such Series represented by a Registered Global Security as shall be
specified in a written statement of the Depositary with respect to such Registered Global Security,
for purposes of obtaining any consents, declarations, waivers or directions required to be given by
the Holders pursuant to this Indenture.
Section 2.15
Computation of Interest.
Except as otherwise specified pursuant to Section 2.2 for Securities of any Series, interest
on the Securities of each Series shall be computed on the basis of a 360-day year of twelve 30-day
months.
Section 2.16
CUSIP and ISIN Numbers.
The Company in issuing the Securities may use “CUSIP” and “ISIN” numbers (if then generally in
use), and, if so, the Trustee shall use “CUSIP” and “ISIN” numbers in notices of redemption as a
convenience to Holders; provided that any such notice may state that no representation is made as
to the correctness of such numbers either as printed on the Securities or as contained in any
notice of a redemption and that reliance may be placed only on the other elements of identification
printed on the Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company shall promptly notify the Trustee in writing of any changes
to the CUSIP and ISIN numbers.
ARTICLE 3
REDEMPTION
Section 3.1
Notice to Trustee.
The Company may, with respect to any Series of Securities, reserve the right to redeem and pay
the Series of Securities or may covenant to redeem and pay the Series of Securities or any part
thereof prior to the Stated Maturity thereof at such time and on such terms as provided for in such
Securities. If a Series of Securities is redeemable and the Company wants or is obligated to redeem
prior to the Stated Maturity thereof all or part of the Series of Securities pursuant to the terms
of such Securities, it shall notify the Trustee in writing of the redemption date and the principal
amount of Series of Securities to be redeemed. The Company shall give the notice at least 35
days before the redemption date (or such shorter notice as may be acceptable to the
Trustee).
Section 3.2
Selection of Securities to be Redeemed.
Unless otherwise indicated for a particular Series by a Board Resolution, a supplemental
indenture or an Officers’ Certificate, if less than all the Securities of a Series are to be
redeemed, the Trustee shall select the Securities of the Series to be redeemed in any manner that
the Trustee deems fair and appropriate. The Trustee shall make the selection from Securities of the
Series outstanding not previously called for redemption. The Trustee may select for redemption
portions of the principal of Securities of the Series that have denominations larger than $1,000.
Securities of the Series and portions of them it selects shall be in amounts of $1,000 or whole
multiples of $1,000 or, with respect to Securities of any Series issuable in other denominations
pursuant to Section 2.2.10, the minimum principal denomination for each Series and integral
multiples thereof. Provisions of this Indenture that apply to Securities of a Series called for
redemption also apply to portions of Securities of that Series called for redemption.
Section 3.3
Notice of Redemption.
Unless otherwise indicated for a particular Series by Board Resolution, a supplemental
indenture hereto or an Officers’ Certificate, at least 30 days but not more than 60 days before a
redemption date, the Company shall provide a notice of redemption by electronic transmission or
first-class mail to each Holder whose Securities
14
are to be redeemed and if any Bearer Securities are outstanding, publish on one occasion a
notice in an Authorized Newspaper.
The notice shall identify the Securities of the Series to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) the name and address of the Paying Agent;
(d) if less than all Securities of any Series are to be redeemed, the identification
of the particular Securities to be redeemed and the portion of the principal amount of any
Security to be redeemed in part;
(e) that Securities of the Series called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that interest on Securities of the Series called for redemption ceases to accrue
on and after the redemption date; and
(g) any other information as may be required by the terms of the particular Series or
the Securities of a Series being redeemed.
At
the Company’s written request, which request shall be provided
at least 10 days prior to desired electronic transmission or first-class mailing of the notice of redemption,
the Trustee shall give the notice of redemption in the
Company’s name and at the Company’s expense and provided that the form and content of such notice
shall be prepared by the Company.
Section 3.4
Effect of Notice of Redemption.
Once notice of redemption is mailed or published as provided in Section 3.3, Securities of a
Series called for redemption become due and payable on the redemption date and at the redemption
price. A notice of redemption may not be conditional. Upon surrender to the Paying Agent, such
Securities shall be paid at the redemption price plus accrued interest to the redemption date.
Section 3.5
Deposit of Redemption Price.
On or before the redemption date, the Company shall deposit with the Paying Agent money
sufficient to pay the redemption price of and accrued interest, if any, on all Securities to be
redeemed on that date.
Section 3.6
Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Trustee shall authenticate for the
Holder a new Security of the same Series and the same maturity equal in principal amount to the
unredeemed portion of the Security surrendered.
ARTICLE 4
COVENANTS
Section 4.1
Payment of Principal and Interest.
The Company shall duly and punctually pay the principal of and interest, if any, on the
Securities of that Series in accordance with the terms of such Securities and this Indenture.
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Section 4.2
SEC Reports.
The Company shall deliver (which delivery may be via electronic mail) to the Trustee within 15
days after the filing by the Company with the SEC 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 SEC may by rules and regulations prescribe) which the Company is required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act. The Company also shall comply with the other
provisions of TIA § 314(a).
Section 4.3
Compliance Certificate.
The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of
the Company, a brief certificate from the principal executive officer, principal financial officer,
principal accounting officer or vice president or treasurer as to his or her knowledge of the
Company’s compliance with all conditions and covenants under this Indenture (which compliance shall
be determined without regard to any period of grace or requirement of notice provided under this
Indenture) and, in the event of any Default, specifying each such Default and the nature and status
thereof of which such Person may have knowledge. Such certificates need not comply with Section
11.5 of this Indenture.
Section 4.4
Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it will not at any time
insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any
stay, extension or usury law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture or the Securities; and the Company (to
the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not, by resort to any such law, 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 has been enacted.
Section 4.5
Corporate Existence.
Subject to Article V, the Company will do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence and the rights (charter and statutory),
licenses and franchises of the Company; provided, however, that the Company shall not be required
to preserve any such right, license or franchise, if the Board of Directors shall determine that
the preservation thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries taken as a whole and that the loss thereof is not adverse in any material respect
to the Holders.
Section 4.6
Maintenance of Office or Agency
.
The Company will maintain an office or agency in The City of New
York, where the Securities of a Series may be surrendered for registration of transfer or exchange
or for presentation for payment and where notices and demands to or upon the Company in respect of
the Securities of a Series and this Indenture may be served. The Company will give prompt written
notice to the Trustee of the location, and any change in the location, of such office or agency not
designated or appointed by the Trustee. 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.
The Company may also from time to time designate co-registrars and one or more offices or
agencies where the Securities of a Series may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations. The Company will give prompt written
notice to the Trustee of any such designation or rescission and of any change in the location of
any such other office or agency.
Section 4.7
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 the Securities of
any Series, it shall, on or before each due date of the principal of and premium, if any, and
interest, if any, on any of
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such Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and premium or interest so becoming due until such sums shall
be paid to such Persons or otherwise disposed of as herein provided. The Company shall promptly
notify the Trustee of any failure by the Company (or any other obligor of such Securities) to make
any payment of principal of or premium, if any, or interest, if any, on such Securities.
Whenever the Company shall have one or more Paying Agents for the Securities of any Series, it
shall, on or before each due date of the principal of and premium, if any, and interest, if any, on
such Securities, deposit with such Paying Agents sums sufficient (without duplication) to pay the
principal and premium or interest so becoming due, such sums to be held in trust for the benefit of
the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the
Trustee) the Company shall promptly notify the Trustee of any failure by it so to act.
The Company shall cause each Paying Agent for the Securities of any Series, other than the
Company or 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 shall:
(a) hold all sums held by it for the payment of the principal of and premium, if any,
or interest, if any, on such 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;
(b) give the Trustee notice of any failure by the Company (or any other obligor upon
such Securities) to make any payment of principal of or premium, if any, or interest, if
any, on such Securities; and
(c) at any time during the continuance of any such failure, upon the written request
of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent
and furnish to the Trustee such information as it possesses regarding the names and
addresses of the Persons entitled to such sums.
The Company may at any time 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, if so stated in a Company Order delivered to the Trustee, in accordance with the
provisions of Article 8; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of and premium, if any, or interest, if any, on any Security
and remaining unclaimed for two years after such principal and premium, if any, or interest, if
any, has become due and payable shall be paid to the Company on request of the Company, or, if then
held by the Company, shall be discharged from such trust; and, upon such payment or discharge, the
Holder of such Security shall, as an unsecured general creditor and not as the Holder of an
outstanding Security, look only to the Company for payment of the amount so due and payable and
remaining unpaid, 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 payment to
the Company, may at the expense of the Company cause to be published once a week for two successive
weeks, in each case on any day of the week, in an Authorized Newspaper in each Place of Payment,
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 paid to the Company.
Section 4.8
Waiver of Certain Covenants.
Except as otherwise specified as contemplated by Section 2.2 for Securities of such Series,
the Company may, with respect to the Securities of any Series, omit in any particular instance to
comply with any term,
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provision or condition set forth in any covenant provided herein or pursuant to Section 2.2.19
or Section 9.1(c) for the benefit of the Holders of such Series if before the time for such
compliance the Holders of at least 50% in principal amount of the outstanding Securities of such
Series shall, by an Act of such Holders, either waive such compliance in such instance or generally
waive compliance with such term, provision or condition, but no such wavier shall extend to or
affect such term, provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of the Trustee in
respect of such term, provision or condition shall remain in full force and effect.
ARTICLE 5
SUCCESSORS
Section 5.1
When Company May Merge, Etc.
The Company shall not consolidate with or merge into, or convey, transfer or lease all or
substantially all of its properties and assets to, any Person (a “successor person”), and may not
permit any Person to merge into, or convey, transfer or lease its properties and assets
substantially as an entirety to, the Company, unless:
(a) either the Company shall be the continuing corporation or the successor person (if
other than the Company) is a corporation, partnership, trust or other entity organized and
validly existing under the laws of the United States of America, any State thereof or the
District of Columbia and expressly assumes the Company’s obligations on the Securities and
under this Indenture; and
(b) immediately after giving effect to the transaction, no Default or Event of
Default, shall have occurred and be continuing.
The Company shall deliver to the Trustee prior to the consummation of the proposed transaction
an Officers’ Certificate to the foregoing effect and an Opinion of Counsel stating that the
proposed transaction and such supplemental indenture comply with this Indenture.
Section 5.2
Successor Corporation Substituted.
The successor person formed by such consolidation or into which the Company is merged or to
which such transfer or lease is made shall succeed to and be substituted for, and may exercise
every right and power of, the Company under this Indenture with the same effect as if such
successor person had been named as the Company herein, and thereafter (except in the case of a
lease to another Person) the predecessor corporation shall be relieved of all obligations and
covenants under the Indenture and the Securities and, in the event of such conveyance or transfer,
any such predecessor corporation may be dissolved and liquidated.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.1
Events of Default.
“Event of Default,” wherever used herein with respect to Securities of any Series, means any
one of the following events, unless in the establishing Board Resolution, supplemental indenture or
Officers’ Certificate, it is provided that such Series shall not have the benefit of said Event of
Default:
(a) a default in the payment of any interest on any Security of that Series when it
becomes due and payable, and continuance of such default for a period of 30 days (unless
the entire amount of such payment is deposited by the Company with the Trustee or with a
Paying Agent prior to the expiration of such period of 30 days); provided that, a valid
extension of an interest payment period by the Company in accordance with the terms of such
Securities shall not constitute a failure to pay interest; or
(b) a default in the payment of the principal of, or premium, if any, on, any Security
of that Series when due at its Maturity; or
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(c) a default in the deposit of any sinking fund payment, when and as due in respect
of any Security of that Series; or
(d) a default, subject to the provisions in Section 4.8, in the performance or breach
of any covenant or warranty of the Company in this Indenture (other than a covenant or
warranty that has been included in this Indenture solely for the benefit of Series of
Securities other than that Series), which default continues uncured for a period of 90 days
after there has been given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in principal amount of the
outstanding Securities of that Series a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a “Notice of Default”
hereunder; or
(e) the Company pursuant to or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an involuntary
case,
(iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors, or
(v) generally is unable to pay its debts as the same become due; or
(f) a court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that:
(i) is for relief against the Company in an involuntary case,
(ii) appoints a Custodian of the Company for all or substantially all of its
property, or
(iii) orders the liquidation of the Company,
and the order or decree remains unstayed and in effect for 60 days; or
(g) any other Event of Default provided with respect to Securities of that Series,
which is specified in a Board Resolution, a supplemental indenture hereto or an Officers’
Certificate, in accordance with Section 2.2.19.
The term “Bankruptcy Law” means title 11, U.S. Code or any similar Federal or State law for
the relief of debtors. The term “Custodian” means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
Section 6.2
Acceleration of Maturity; Rescission and Annulment.
If an Event of Default described in Section 6.1(a), (b) or (c) occurs and is continuing, then,
and in each and every such case, except for any series of Securities the principal of which shall
have already become due and payable, either the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Securities of each such affected series then outstanding
hereunder (each such series voting as a separate class) by notice in writing to the Company (and to
the Trustee if given by Securityholders), may declare the entire principal (or, if the Securities
of such series are Discount Securities, such portion of the principal amount as may be specified in
the terms of such series) of all Securities of such series, and the interest accrued thereon, if
any, to be due and payable immediately, and upon any such declaration, the same shall become
immediately due and payable.
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Except as otherwise provided in the terms of any series of Senior Securities pursuant to
Section 2.2, if an Event of Default described in Section 6.1(d) or (g) above with respect to all
series of the Senior Securities then outstanding, occurs and is continuing, then, and in each and
every such case, unless the principal of all of the Senior Securities shall have already become due
and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount
of all of the Senior Securities then outstanding hereunder (treated as one class) by notice in
writing to the Company (and to the Trustee if given by Securityholders), may declare the entire
principal (or, if the Senior Securities of any series are Discount Securities, such portion of the
principal amount as may be specified in the terms of such series) of all of the Senior Securities
then outstanding, and the interest accrued thereon, if any, to be due and payable immediately, and
upon such declaration, the same shall become immediately due and payable. If an Event of Default
described in clause (e) or (f) above occurs and is continuing, then the principal amount of all the
Senior Securities then outstanding, and the interest accrued thereon, if any, shall become and be
immediately due and payable without any declaration or other act on the part of the Trustee or any
Holder.
Except as otherwise provided in the terms of any series of Subordinated Securities pursuant to
Section 2.2, if an Event of Default described in Section 6.1 (d) or (g) above with respect to all
series of Subordinated Securities then outstanding, occurs and is continuing, then, and in each and
every such case, unless the principal of all of the Subordinated Securities shall have already
become due and payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of all of the Subordinated Securities then outstanding hereunder (treated as one
class) by notice in writing to the Company (and to the Trustee if given by Securityholders), may
declare the entire principal (or, if the Subordinated Securities of any series are Discount
Securities, such portion of the principal amount as may be specified in the terms of such series)
of all of the Subordinated Securities then outstanding, and the interest accrued thereon, if any,
to be due and payable immediately, and upon such declaration, the same shall become immediately due
and payable.
If an Event of Default described in Section 6.1 (d) or (g) occurs and is continuing, which
Event of Default is with respect to less than all series of Senior Securities then outstanding,
then, and in each and every such case, except for any series of Senior Securities the principal of
which shall have already become due and payable, either the Trustee or the Holders of not less than
25% in aggregate principal amount of the Senior Securities of each such affected series then
outstanding hereunder (each such series voting as a separate class) by notice in writing to the
Company (and to the Trustee if given by Securityholders), may declare the entire principal (or, if
the Securities of such series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of such series) of all Securities of such series, and the
interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration,
the same shall become immediately due and payable.
If an Event of Default described in Section 6.1(d) or (g) occurs and is continuing, which
Event of Default is with respect to less than all series of Subordinated Securities then
outstanding, then, and in each and every such case, except for any series of Subordinated
Securities the principal of which shall have already become due and payable, either the Trustee or
the Holders of not less than 25% in aggregate principal amount of the Subordinated Securities of
each such affected series then outstanding hereunder (each such series voting as a separate class)
by notice in writing to the Company (and to the Trustee if given by Securityholders), may declare
the entire principal (or, if the Securities of such series are Discount Securities, such portion of
the principal amount as may be specified in the terms of such series) of all Securities of such
series, and the interest accrued thereon, if any, to be due and payable immediately, and upon any
such declaration, the same shall become immediately due and payable.
If an Event of Default specified in Section 6.1(e) or (f) shall occur, the principal amount
(or specified amount) of and accrued and unpaid interest, if any, on all outstanding Securities
shall ipso facto become and be immediately due and payable without any declaration or other act on
the part of the Trustee or any Holder.
At any time after such a declaration of acceleration with respect to any Series has been made
and before a judgment or decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article provided, the Holders of a majority in principal amount of the
outstanding Securities of that Series, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum sufficient to pay
(i) all overdue interest, if any, on all Securities of that Series,
20
(ii) the principal of any Securities of that Series which have become due
otherwise than by such declaration of acceleration and interest thereon at the rate
or rates prescribed therefor in such Securities,
(iii) to the extent that payment of such interest is lawful, interest upon any
overdue principal and overdue interest at the rate or rates prescribed therefor in
such Securities, and
(iv) 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
(b) all Events of Default with respect to Securities of that Series, other than the
non-payment of the principal of Securities of that Series which have become due solely by
such declaration of acceleration, have been cured or waived as provided in Section 6.13.
No such rescission shall affect any subsequent Default or impair any right consequent thereon.
Section 6.3
Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(a) default is made in the payment of any interest on any Security when such interest
becomes due and payable and such default continues for a period of 30 days, or
(b) default is made in the payment of principal of any Security when due at the
Maturity thereof, or
(c) default is made in the deposit of any sinking fund payment when and as due by the
terms of a Security,
then
, the Company will, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest and, to the extent that payment of such interest
shall be legally enforceable, interest on any overdue principal or any overdue interest, at
the rate or rates prescribed therefor in such Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If 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, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities and collect the
moneys adjudged or deemed to be payable in the manner provided by law out of the property of the
Company or any other obligor upon such Securities, wherever situated.
If an Event of Default with respect to any Securities of any Series occurs and is continuing,
the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities of such Series by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein,
or to enforce any other proper remedy.
Section 6.4
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
21
(irrespective of whether the principal of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal 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
(b) to collect and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.5
Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may be prosecuted and
enforced by the Trustee without the possession of any of the Securities or the production thereof
in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in
respect of which such judgment has been recovered.
Section 6.6
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 interest, upon presentation of the Securities and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section 7.7; and
Second: To the payment of the amounts then due and unpaid for principal of and interest on the
Securities in respect of which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due and payable on such
Securities for principal and interest, respectively; and
Third: To the Company.
Section 6.7
Limitation on Suits.
No Holder of any Security of any Series shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless
22
(a) such Holder has previously given written notice to the Trustee of an Event of
Default and the continuance thereof with respect to the Securities of that Series;
(b) 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;
(c) such Holder or Holders have offered to the Trustee reasonable security or
indemnity satisfactory to the Trustee against the expenses and liabilities to be incurred
in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding; and
(e) 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 6.8
Unconditional Right of Holders to Receive Principal and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have
the right, which is absolute and unconditional, to receive payment of the principal of and
interest, if any, on such Security on the Stated Maturity or Stated Maturities expressed in such
Security (or, in the case of redemption, on the redemption date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without the consent of such
Holder.
Section 6.9
Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder, then and in every such case, subject to
any determination in such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such proceeding had been
instituted.
Section 6.10
Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities in Section 2.8, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section 6.11
Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities to exercise any right
or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or
23
to the Holders may be exercised from time to time, and as often as may be deemed expedient, by
the Trustee or by the Holders, as the case may be.
Section 6.12
Control by Holders.
The Holders of a majority in principal amount of the outstanding Securities of any Series
shall have the right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Securities of such Series, provided that
(a) such direction shall not be in conflict with any rule of law or with this
Indenture,
(b) the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction, and
(c) subject to the provisions of Section 6.1, the Trustee shall have the right to
decline to follow any such direction if the Trustee in good faith shall, by a Trust Officer
of the Trustee, determine that the proceeding so directed would involve the Trustee in
personal liability.
Section 6.13
Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the outstanding Securities of
any Series may on behalf of the Holders of all the Securities of such Series waive any past Default
hereunder with respect to such Series and its consequences, except a Default in the payment of the
principal of or interest on any Security of such Series (provided, however, that the Holders of a
majority in principal amount of the outstanding Securities of any Series may rescind an
acceleration and its consequences, including any related payment default that resulted from such
acceleration). Upon any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.
Section 6.14
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, suffered or omitted by it as Trustee, the filing by any party litigant in such suit
of an undertaking to pay the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit instituted by the Company,
to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders,
holding in the aggregate more than 10% in principal amount of the outstanding Securities of any
Series, or to any suit instituted by any Holder for the enforcement of the payment of the principal
of or interest on any Security on or after the Stated Maturity or Stated Maturities expressed in
such Security (or, in the case of redemption, on the redemption date).
ARTICLE 7
TRUSTEE
Section 7.1
Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee shall exercise
the rights and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person’s own affairs.
(b) Except during the continuance of an Event of Default:
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(i) the Trustee need perform only those duties that are specifically set forth
in this Indenture and no other implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) 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; however, the Trustee shall examine
such certificates and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made in good
faith by a Trust Officer, unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it takes or
omits to take with respect to Securities of any Series in good faith in accordance
with the direction of the Holders of a majority in principal amount of the
outstanding Securities of such Series.
(d) Every provision of this Indenture that in any way relates to the Trustee is
subject to paragraph (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received by it.
(f) Money held in trust by the Trustee need not be segregated from other funds except
to the extent required by law.
(g) 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
is not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to the provisions of
this Section and to the provisions of the TIA.
Section 7.2
Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be genuine and to have been
signed or presented by the proper person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on the Officers’ Certificate or
Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for the misconduct
or negligence of any agent appointed with due care.
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(d) The Trustee shall not be liable for any action it takes or omits to take in good
faith which it believes to be authorized or within its rights or powers.
(e) The Trustee may consult with counsel, and the advice or opinion of counsel with
respect to legal matters relating to this Indenture and the Securities shall be full and
complete authorization and protection from liability in respect to any action taken,
omitted or suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) The Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond, debenture, note or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit.
(g) The Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request, order or direction of any of the
Securityholders pursuant to the provisions of this Indenture, unless such Securityholders
shall have offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby.
(h) The rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its rights to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, and to each agent,
custodian and other Person employed to act hereunder.
(i) The Trustee may request that the Company deliver an Officers’ Certificate setting
forth the names of individuals and/or titles of officers authorized at such time to take
specified actions pursuant to this Indenture, which Officers’ Certificate may be signed by
any person authorized to sign an Officers’ Certificate, including any person specified as
so authorized in any such certificate previously delivered and not superseded.
(j) The permissive rights of the Trustee enumerated herein shall not be construed as
duties.
Section 7.3
Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company or an Affiliate with the same rights it would
have if it were not Trustee. Any Agent may do the same with like rights. The Trustee is also
subject to Sections 7.10 and 7.11.
Section 7.4
Trustee’s Disclaimer.
The Trustee shall not be responsible and makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for the Company’s use of
the proceeds from the Securities, and it shall not be responsible for any statement in the
Securities or in any document issued in connection with the sale of the Securities or in the
Securities other than its certificate of authentication.
Section 7.5
Notice of Defaults.
If a Default or Event of Default occurs and is continuing with respect to the Securities of
any Series and if it is known to a Trust Officer of the Trustee, the Trustee shall provide notice of such Default or Event of Default by electronic transmission or first-class mail to each
Securityholder of the Securities of that Series and, if any Bearer Securities are outstanding,
publish on one occasion in an Authorized Newspaper, notice of a Default or Event of Default within
90 days after it occurs or 30 days after it is known to a Trust Officer or written notice of it is
received by the Trustee. Except in the case of a Default or Event of Default in payment of
principal, premium, if any, of or interest on any Security of any Series or in payment of any
redemption obligation, the Trustee may withhold the notice if and so long as its corporate trust
committee or a committee of its Trust Officers in good faith determines that withholding the notice
is in the interests of Securityholders of that Series.
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Section 7.6
Reports by Trustee to Holders.
As promptly as practicable after each May 15 beginning with May 15, 2012, and in any event
prior to July 15 in each year, the Trustee shall transmit by electronic transmission or first-class mail to all Securityholders, as their
names and addresses appear on the register kept by the Registrar and, if any Bearer Securities are
outstanding, publish in an Authorized Newspaper, a brief report dated as of May 15, each year as
and if required by TIA § 313(a) if and to the extent required by such subsection. The Trustee
shall also comply with TIA § 313(b) and TIA § 313(c).
A copy of each report at the time of its electronic transmission or mailing to Securityholders of any Series shall be
filed with the SEC and each stock exchange (if any) on which the Securities of that Series are
listed. The Company shall promptly notify the Trustee when Securities of any Series are listed on
any stock exchange and of any delisting thereof.
Section 7.7
Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such compensation as the Company and
the Trustee shall from time to time agree in writing. The Trustee’s compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company shall reimburse
the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services. Such expenses
shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s
agents, counsel, accountants and experts. The Company shall indemnify the Trustee, and hold it
harmless, against any and all loss, liability or expense (including reasonable attorneys’ fees)
incurred by or in connection with the offer and sale of the Securities or the administration of
this trust and the performance of its duties hereunder. The Trustee shall notify the Company of
any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof;
provided, however, that any failure so to notify the Company shall not relieve the Company of its
indemnity obligations hereunder. The Company shall defend the claim and the indemnified party
shall provide reasonable cooperation at the Company’s expense in the defense. Such indemnified
parties may have separate counsel and the Company shall pay the fees and expenses of such counsel;
provided, however, that the Company shall not be required to pay such fees and expenses if it
assumes such indemnified parties’ defense and, in such indemnified parties’ reasonable judgment,
there is no conflict of interest between the Company and such parties in connection with such
defense. The Company need not reimburse any expense or indemnify against any loss, liability or
expense incurred by an indemnified party through such party’s own willful misconduct and
negligence.
To secure the Company’s payment obligations in this Section, the Trustee shall have a lien
prior to the Securities of any Series on all money or property held or collected by the Trustee
other than money or property held in trust to pay principal of and interest and any liquidated
damages on particular Securities of that Series.
The Company’s payment obligations pursuant to this Section shall survive the satisfaction or
discharge of this Indenture, any rejection or termination of this Indenture under any bankruptcy
law or the resignation or removal of the Trustee.
When the Trustee incurs expenses or renders services after an Event of Default specified in
Section 6.1(f) or (g) occurs, the expenses and the compensation for the services are intended to
constitute expenses of administration under any Bankruptcy Law.
Section 7.8
Replacement of Trustee.
The Trustee may resign with respect to the Securities of one or more Series at any time by so
notifying the Company. The Holders of a majority in principal amount of the Securities of any
Series may remove the Trustee with respect to that Series by so notifying the Trustee and may
appoint a successor Trustee. The Company shall remove the Trustee with respect to Securities of
one or more Series if:
(a) the Trustee fails to comply with Section 7.10;
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(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Trustee or its property; or
(d) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of a majority in principal
amount of the Securities of any Series and such Securityholders do not reasonably promptly appoint
a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in
such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers and duties of the
Trustee with respect to each Series of Securities for which it is acting as Trustee under this
Indenture. The successor Trustee shall mail or otherwise provide by electronic transmission a notice of its succession to each Securityholder of
each such Series and, if any Bearer Securities are outstanding, publish such notice on one occasion
in an Authorized Newspaper. The retiring Trustee shall promptly transfer all property held by it
as Trustee to the successor Trustee, subject to the lien provided for in Section 7.7.
If a successor Trustee with respect to the Securities of any one or more Series does not take
office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in principal amount of the Securities of the applicable Series may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee with respect to the Securities of any one or more Series fails to comply with
Section 7.10, any Securityholder of the applicable Series may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this Section, the Company’s
obligations under Section 7.7 shall continue for the benefit of the retiring Trustee
Section 7.9
Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business or assets to, another corporation or banking association, the
resulting, surviving or transferee corporation without any further act shall be the successor
Trustee.
In case at the time such successor or successors by merger, conversion or consolidation to the
Trustee with respect to the Securities of any one or more Series shall succeed to the trusts
created by this Indenture any of the Securities of the applicable Series shall have been
authenticated but not delivered, any such successor to such Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities of the applicable Series so
authenticated; and in case at that time any of the Securities of such Securities shall not have
been authenticated, any successor to the Trustee may authenticate such Securities either in the
name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such
cases such certificates shall have the full force which it is anywhere in the Securities of such
Series or in this Indenture provided that the certificate of the Trustee shall have.
Section 7.10
Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements of TIA § 310(a). The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with TIA § 310(b); provided,
however, that there shall be excluded from the operation of TIA § 310(b)(1) any indenture or
indentures under which other securities or certificates of interest or participation in other
securities of the Company are outstanding if the requirements for such exclusion set forth in TIA §
310(b)(1) are met.
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Section 7.11
Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed in TIA
§ 311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the
extent indicated.
ARTICLE 8
SATISFACTION AND DISCHARGE; DEFEASANCE
Section 8.1
Satisfaction and Discharge of Indenture.
This Indenture, with respect to Securities of any Series (if all Series issued under this
Indenture are not to be effected) shall, upon Company Order, cease to be of further effect (except
as hereinafter provided in this Section 8.1), and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this Indenture, when
(a) either
(i) all Securities of such Series theretofore authenticated and delivered
(other than (A) Securities that have been destroyed, lost or stolen and that have
been replaced or paid or (B) Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in Sections 2.5 and
4.7) have been delivered to the Trustee for cancellation; or
(ii) all such Securities of such Series not theretofore delivered to the
Trustee for cancellation:
(1) have become due and payable, or
(2) will become due and payable at their Stated Maturity within
one year, or
(3) 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, or
(4) are deemed paid and discharged pursuant to Section 8.3, as
applicable;
and the Company, in the case of (1), (2) or (3) above, has deposited or caused to be deposited with
the Trustee as trust funds in trust an amount sufficient for the purpose of paying and discharging
the entire indebtedness on such Securities not theretofore delivered to the Trustee for
cancellation, for principal of, premium, if any, and interest on, and any mandatory sinking fund
payments to the date of such deposit (in the case of Securities of such Series which have become
due and payable on or prior to the date of such deposit) or to the Stated Maturity or redemption
date, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable hereunder by the
Company; and
(c) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion
of Counsel, each stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.
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Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the
Company to the Trustee under Section 7.7, and, if money shall have been deposited with the Trustee
pursuant to clause (a) of this Section, the provisions of Sections 2.4, 2.7, 2.8, 4.7 (last
paragraph only), 8.1, 8.2 and 8.5 shall survive.
Section 8.2
Application of Trust Funds; Indemnification.
(a) Subject to the provisions of Section 8.5, all money deposited with the Trustee
pursuant to Section 8.1, all money and U.S. Government Obligations or Foreign Government
Obligations deposited with the Trustee pursuant to Section 8.3 or 8.4 and all money
received by the Trustee in respect of U.S. Government Obligations or Foreign Government
Obligations deposited with the Trustee pursuant to Section 8.3 or 8.4, shall be held in
trust and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent (including the
Company acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal and interest for whose payment such money has been
deposited with or received by the Trustee or to make mandatory sinking fund payments or
analogous payments as contemplated by Sections 8.3 or 8.4.
(b) The Company shall pay and shall indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against U.S. Government Obligations or Foreign
Government Obligations deposited pursuant to Sections 8.3 or 8.4 or the interest and
principal received in respect of such obligations other than any payable by or on behalf of
Holders.
(c) The Trustee shall deliver or pay to the Company from time to time upon Company
Request any U.S. Government Obligations or Foreign Government Obligations or money held by
it as provided in Sections 8.3 or 8.4 which, in the opinion of a nationally recognized firm
of independent certified public accountants expressed in a written certification thereof
delivered to the Trustee, are then in excess of the amount thereof which then would have
been required to be deposited for the purpose for which such U.S. Government Obligations or
Foreign Government Obligations or money were deposited or received. This provision shall
not authorize the sale by the Trustee of any U.S. Government Obligations or Foreign
Government Obligations held under this Indenture.
Section 8.3
Legal Defeasance of Securities of any Series.
Unless this Section 8.3 is otherwise specified, pursuant to Section 2.2.24, to be inapplicable
to Securities of any Series, the Company shall be deemed to have paid and discharged the entire
indebtedness on all the outstanding Securities of such Series on the 91st day after the date of the
deposit referred to in subparagraph (d) hereof, and the provisions of this Indenture, as it relates
to such outstanding Securities of such Series, shall no longer be in effect (and the Trustee, at
the expense of the Company, shall, at Company Request, execute proper instruments acknowledging the
same), except as to:
(a) the rights of Holders of Securities of such Series to receive, from the trust
funds described in subparagraph (d) hereof, (i) payment of the principal of and each
installment of principal of and interest on the outstanding Securities of such Series on
the Stated Maturity of such principal or installment of principal or interest and (ii) the
benefit of any mandatory sinking fund payments applicable to the Securities of such Series
on the day on which such payments are due and payable in accordance with the terms of this
Indenture and the Securities of such Series;
(b) the provisions of Sections 2.4, 2.7, 2.8, 8.2, 8.3 and 8.5; and
(c) the rights, powers, trust and immunities of the Trustee hereunder;
provided that, the following conditions shall have been satisfied:
(d) the Company shall have deposited or caused to be deposited irrevocably with the
Trustee as trust funds in trust for the purpose of making the following payments,
specifically pledged as
30
security for and dedicated solely to the benefit of the Holders of such Securities (i)
in the case of Securities of such Series denominated in Dollars, cash in Dollars (or such
other money or currencies as shall then be legal tender in the United States) and/or U.S.
Government Obligations, or (ii) in the case of Securities of such Series denominated in a
Foreign Currency (other than a composite currency), money and/or Foreign Government
Obligations, which through the payment of interest and principal in respect thereof, in
accordance with their terms, will provide (and without reinvestment and assuming no tax
liability will be imposed on such Trustee), not later than one day before the due date of
any payment of money, an amount in cash, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge each installment of principal
(including mandatory sinking fund or analogous payments) of and interest, if any, on all
the Securities of such Series on the dates such installments of interest or principal are
due;
(e) such deposit will not result in a breach or violation of, or constitute a default
under, this Indenture or any other agreement or instrument to which the Company is a party
or by which it is bound;
(f) no Default or Event of Default with respect to the Securities of such Series shall
have occurred and be continuing on the date of such deposit or during the period ending on
the 91st day after such date;
(g) the Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel from a nationally recognized law firm to the effect 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 of Counsel shall confirm that, the Holders of the Securities of such Series
will not recognize income, gain or loss for Federal income tax purposes as a result of such
deposit, defeasance and discharge and will be subject to Federal income tax on the same
amount and in the same manner and at the same times as would have been the case if such
deposit, defeasance and discharge had not occurred;
(h) the Company shall have delivered to the Trustee an Officers’ Certificate stating
that the deposit was not made by the Company with the intent of preferring the Holders of
the Securities of such Series over any other creditors of the company or with the intent of
defeating, hindering, delaying or defrauding any other creditors of the Company;
(i) such deposit shall not result in the trust arising from such deposit constituting
an investment company (as defined in the Investment Company Act of 1940, as amended), or
such trust shall be qualified under such Act or exempt from regulation thereunder; and
(j) the Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent provided for relating to the
defeasance contemplated by this Section 8.3 have been complied with.
Section 8.4
Covenant Defeasance.
Unless this Section 8.4 is otherwise specified pursuant to Section 2.2.24 to be inapplicable
to Securities of any Series, on and after the date of the deposit referred to in subparagraph (a)
hereof, the Company may omit to comply with any term, provision or condition set forth under
Sections 4.2, 4.3, 4.4, 4.5 and 5.1 as well as any additional covenants contained in a supplemental
indenture hereto for a particular Series of Securities or a Board Resolution or an Officers’
Certificate delivered pursuant to Section 2.2.24 (and the failure to comply with any such covenants
shall not constitute a Default or Event of Default under Section 6.1) and the occurrence of any
event described in clause (e) of Section 6.1 shall not constitute a Default or Event of Default
hereunder, with respect to the Securities of such Series, provided that the following conditions
shall have been satisfied:
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(a) with reference to this Section 8.4, the Company has deposited or caused to be
irrevocably deposited (except as provided in Section 8.2(c)) with the Trustee as trust
funds in trust, specifically pledged as security for, and dedicated solely to, the benefit
of the Holders of such Securities (i) in the case of Securities of such Series denominated
in Dollars, cash in Dollars (or such other money or currencies as shall then be legal
tender in the United States) and/or U.S. Government Obligations, or (ii) in the case of
Securities of such Series denominated in a Foreign Currency (other than a composite
currency), money and/or Foreign Government Obligations, which through the payment of
interest and principal in respect thereof, in accordance with their terms, will provide
(and without reinvestment and assuming no tax liability will be imposed on such Trustee),
not later than one day before the due date of any payment of money, an amount in cash,
sufficient, in the opinion of a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to the Trustee, to pay
principal and interest, if any, on and any mandatory sinking fund in respect of the
Securities of such Series on the dates such installments of interest or principal are due;
(b) such deposit will not result in a breach or violation of, or constitute a default
under, this Indenture or any other agreement or instrument to which the Company is a party
or by which it is bound;
(c) no Default or Event of Default with respect to the Securities of such Series shall
have occurred and be continuing on the date of such deposit;
(d) the Company shall have delivered to the Trustee an Opinion of Counsel from a
nationally recognized law firm confirming that Holders of the Securities of such Series
will not recognize income, gain or loss for federal income tax purposes as a result of such
deposit and 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 deposit and
defeasance had not occurred;
(e) the Company shall have delivered to the Trustee an Officers’ Certificate stating
the deposit was not made by the Company with the intent of preferring the Holders of the
Securities of such Series over any other creditors of the Company or with the intent of
defeating, hindering, delaying or defrauding any other creditors of the Company; and
(f) the Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein provided for relating
to the defeasance contemplated by this Section 8.4 have been complied with.
Section 8.5
Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company (or its designee) upon
Company Order any excess moneys or U.S. Government Obligations held by them at any time. The
provisions of the last paragraph of Section 4.7 shall apply to any money held by the Trustee or any
Paying Agent that remains unclaimed for two years after the Maturity of any Series or Securities
for which money or U.S. Government Obligations have been deposited pursuant to Sections 8.3 and
8.4.
Section 8.6
Effect of Subordination Provisions.
Unless otherwise expressly established pursuant to Section 2.2 with respect to the
Subordinated Securities of any Series, the provisions of Article 10 hereof, insofar as they pertain
to the Subordinated Securities of such series, and the Subordination Provisions established
pursuant to Section 2.2.9 with respect to such Series, are hereby expressly made subject to the
provisions for satisfaction and discharge and defeasance and covenant defeasance set for this
Article 8 and, anything herein to the contrary notwithstanding, upon the effectiveness of such
satisfaction and discharge and defeasance and covenant defeasance pursuant to this Article 8 with
respect to the Securities of such Series, such Securities shall thereupon cease to be so
subordinated and shall no longer be subject to the provisions of Article 10 or the Subordination
Provisions established pursuant to Section 2.2.9 with respect to such series and, without
limitation to the foregoing, all moneys, U.S. Government Obligations and other securities or
32
property deposited with the Trustee (or other qualifying trustee) in trust in connection with
such satisfaction and discharge, defeasance or covenant defeasance, as the case may be, and all
proceeds therefrom may be applied to pay the principal of, premium, if any, on, and mandatory
sinking fund payments, if any with respect to the Securities of such Series as and when the same
shall become due and payable notwithstanding the provisions of Article 10 or such Subordination
Provisions.
ARTICLE 9
AMENDMENTS AND WAIVERS
Section 9.1
Without Consent of Holders.
The Company and the Trustee may amend or supplement this Indenture or the Securities of one or
more Series without the consent of any Securityholder:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee as security for the
Securities of one or more Series any property or assets;
(b) to comply with Article V;
(c) to add to the covenants of the Company such further covenants, restrictions,
conditions or provisions as the Company and the Trustee shall consider to be for the
protection of the Holders of Securities, and to make the occurrence, or the occurrence and
continuance, of a default in any such additional covenants, restrictions, conditions or
provisions an Event of Default permitting the enforcement of all or any of the several
remedies provided in this Indenture as herein set forth; provided, that in respect of any
such additional covenant, restriction, condition or provision 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 an Event of Default or may limit the remedies available to the
Trustee upon such an Event of Default or may limit the right of the Holders of a majority
in aggregate principal amount of the Securities of such series to waive such an Event of
Default;
(d) add a guarantor or permit any Person to guarantee the obligations under any Series
of Securities;
(e) to cure any ambiguity, defect or inconsistency;
(f) to provide for the issuance of and establish the form and terms and conditions of
Securities of any Series as permitted by this Indenture;
(g) 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;
(h) to provide for uncertificated Securities in addition to or in place of
certificated Securities;
(i) to make any change that does not materially adversely affect the rights of any
Securityholder; and
(j) to comply with requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the TIA.
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Section 9.2
With Consent of Holders.
The Company and the Trustee may enter into a supplemental indenture with the written consent
of the Holders of at least a majority in principal amount of the outstanding Securities of each
Series affected by such supplemental indenture (including consents obtained in connection with a
tender offer or exchange offer for the Securities of such Series), for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of this Indenture or
of any supplemental indenture or of modifying in any manner the rights of the Securityholders of
each such Series. Except as provided in Section 6.13, the Holders of at least a majority in
principal amount of the outstanding Securities of each Series affected by such waiver by notice to
the Trustee (including consents obtained in connection with a tender offer or exchange offer for
the Securities of such Series) may waive compliance by the Company with any provision of this
Indenture or the Securities with respect to such Series.
It shall not be necessary for the consent of the Holders of Securities under this Section 9.2
to approve the particular form of any proposed supplemental indenture or waiver, but it shall be
sufficient if such consent approves the substance thereof. After a supplemental indenture or waiver
under this section becomes effective, the Company shall mail or provide by electronic transmission to the Holders of Securities affected
thereby and, if any Bearer Securities affected thereby are outstanding, publish on one occasion in
an Authorized Newspaper, a notice briefly describing the supplemental indenture or waiver. Any
failure by the Company to mail or publish such notice, or any defect therein, shall not, however,
in any way impair or affect the validity of any such supplemental indenture or waiver.
Section 9.3
Limitations.
Without the consent of each Securityholder affected, an amendment or waiver may not:
(a) extend the final maturity of any Security;
(b) reduce the principal amount thereof, or premium thereon, if any;
(c) reduce the rate or extend the time of payment of interest thereon,
(d) reduce any amount payable on redemption thereof;
(e) make the principal thereof (including any amount in respect of original issue
discount), or premium thereon, if any, or interest thereon payable in any coin or currency
other than that provided in the Securities or in accordance with the terms thereof;
(f) reduce the amount of the principal of a Discount Security that would be due and
payable upon an acceleration of the maturity thereof pursuant to Section 6.2 or the amount
thereof provable in bankruptcy pursuant to Section 6.4;
(g) in the case of Subordinated Securities of any series, modify any of the
Subordination Provisions or the definition of “Senior Indebtedness” relating to such series
in a manner adverse to the holders of such Subordinated Securities;
(h) alter the provisions of Section 11.15 or 11.16;
(i) impair or affect the right of any Securityholder to institute suit for the payment
thereof when due or, if the Securities provide therefor, any right of repayment at the
option of the Securityholder;
(j) reduce the aforesaid percentage of Securities of any Series, the consent of the
Holders of which is required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain provisions of this Indenture
or certain defaults hereunder and their consequences) provided for in this Indenture; or
(k) modify any provision of this Section 9.3.
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Section 9.4
Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Securities of one or more Series shall be set forth
in a supplemental indenture hereto that complies with the TIA as then in effect.
Section 9.5
Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a Holder of a Security is a
continuing consent by the Holder and every subsequent Holder of a Security or portion of a Security
that evidences the same debt as the consenting Holder’s Security, even if notation of the consent
is not made on any Security. However, any such Holder or subsequent Holder may revoke the consent
as to his Security or portion of a Security if the Trustee receives the notice of revocation before
the date the amendment or waiver becomes effective.
Any amendment or waiver once effective shall bind every Securityholder of each Series affected
by such amendment or waiver unless it is of the type described in any of clauses (a) through (g) of
Section 9.3. In that case, the amendment or waiver shall bind each Holder of a Security who has
consented to it and every subsequent Holder of a Security or portion of a Security that evidences
the same debt as the consenting Holder’s Security.
The Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Securityholders entitled to give their consent or take any other action described
above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed,
then notwithstanding the immediately preceding paragraph, those Persons who were Securityholders at
such record date (or their duly designated proxies), and only those Persons, shall be entitled to
give such consent or to revoke any consent previously given or to take any such action, whether or
not such Persons continue to be Securityholders after such record date.
Section 9.6
Notation on or Exchange of Securities.
The Trustee may place an appropriate notation about an amendment or waiver on any Security of
any Series thereafter authenticated. The Company in exchange for Securities of that Series may
issue and the Trustee shall authenticate upon written request new Securities of that Series that
reflect the amendment or waiver.
Section 9.7
Trustee Protected.
In executing, or accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by this Indenture, the
Trustee shall be entitled to receive, and (subject to Section 7.1) 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 shall sign all supplemental indentures,
except that the Trustee need not sign any supplemental indenture that adversely affects its rights.
ARTICLE 10
SUBORDINATION OF SECURITIES
Section 10.1
Agreement to Subordinate.
The Company, for itself, its successors and assigns, covenants and agrees, and each Holder of
Subordinated Securities of any Series by his acceptance thereof, likewise covenants and agrees,
that the payment of the principal of (and premium, if any) and interest, if any, on, and mandatory
sinking fund payments, if any, in respect of each and all of the Subordinated Securities of such
series shall be expressly subordinated, to the extent and in the manner provided in the
Subordination Provisions established with respect to the Subordinated Securities of such Series
pursuant to Section 2.2.9 hereof, in right of payment to the prior payment in full of all Senior
Debt with respect to such Series.
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ARTICLE 11
MISCELLANEOUS
Section 11.1
Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or conflicts with another provision
which is required or deemed to be included in this Indenture by the TIA, such required or deemed
provision shall control.
Section 11.2
Notices.
Any notice or communication by the Company or the Trustee to the other hereunder is duly given if in
writing and delivered in person or mailed by overnight courier:
if to the Company:
Brookdale Senior Living Inc.
111 Westwood Place, Suite 400
Brentwood, Tennessee 37027
Attention: General Counsel
if to the Trustee:
American Stock Transfer & Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
Attention: General Counsel
The Company or the Trustee by notice to the other may designate additional or different
addresses for subsequent notices or communications.
Any notice or communication to a Securityholder shall be provided by electronic transmission
or by first-class mail to his address shown on the register kept by the Registrar and, if any
Bearer Securities are outstanding, published in an Authorized Newspaper. Failure to provide a
notice or communication to a Securityholder of any Series or any defect in it shall not affect its
sufficiency with respect to other Securityholders of that or any other Series.
If a notice or communication is provided or published in the manner provided above, within the
time prescribed, it is duly given, whether or not the Securityholder receives it.
If the Company provides a notice or communication to Securityholders, it shall provide a copy
to the Trustee and each Agent at the same time.
In case, by reason of the suspension of or irregularities in regular mail service, it shall be
impracticable to mail notice by the Company when such notice is required to be given pursuant to
any provision of this Indenture, then any manner of giving such notice as shall be reasonably
satisfactory to the Trustee shall be deemed to be a sufficient giving of such notice.
Section 11.3
Communication by Holders with Other Holders.
Securityholders of any Series may communicate pursuant to TIA § 312(b) with other
Securityholders of that Series or any other Series with respect to their rights under this
Indenture or the Securities of that Series or all Series. The Company, the Trustee, the Registrar
and anyone else shall have the protection of TIA § 312(c).
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Section 11.4
Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or refrain from taking
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers’ Certificate in form and substance reasonably satisfactory to the
Trustee stating that, in the opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
stating that, in the opinion of such counsel, all such conditions precedent have been
complied with.
Section 11.5
Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture shall include:
(a) a statement that the person making such certificate or opinion has read such
covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such individual, he has made such examination
or investigation as is necessary to enable him to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such person, such condition or
covenant has been complied with.
Section 11.6
Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting of Securityholders of one or
more Series. Any Agent may make reasonable rules and set reasonable requirements for its
functions.
Section 11.7
Legal Holidays.
Unless otherwise provided by Board Resolution, Officers’ Certificate or supplemental indenture
for a particular Series, a “Legal Holiday” is a Saturday, Sunday or a day on which banking
institutions in the city (or in any of the cities, if more than one) in which amounts are payable,
as specified in the form of such Security, are not required by any applicable law or regulation to
be open, and no interest shall accrue for the intervening period. If a regular record date is a
Legal Holiday, the record date shall not be affected.
Section 11.8
No Recourse Against Others.
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
incorporator, as such, or against any past, present or future stockholder, 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 and the coupons, if any, appertaining thereto by the
Holders thereof and as part of the consideration for the issue of the Securities and the coupons,
if any, appertaining thereto.
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Section 11.9
Counterparts.
This Indenture may be executed in any number of counterparts and by the parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
Section 11.10
Governing Laws; Waiver of Jury Trial.
THIS INDENTURE AND EACH SECURITY SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE
OF NEW YORK, AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
SUCH STATE, INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL
OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND RULES 327(b).
EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.
Section 11.11
No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or debt agreement of the
Company or a Subsidiary. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.
Section 11.12
Successors.
All agreements of the Company in this Indenture and the Securities shall bind its successor.
All agreements of the Trustee in this Indenture shall bind its successor.
Section 11.13
Severability.
In case any provision in this Indenture or in the Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 11.14
Table of Contents, Headings, Etc.
The Table of Contents, Cross Reference Table, and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to be considered a
part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.
Section 11.15
Securities in a Foreign Currency or in ECU.
Unless otherwise specified in a Board Resolution, a supplemental indenture hereto or an
Officers’ Certificate delivered pursuant to Section 2.2 of this Indenture with respect to a
particular Series of Securities, whenever for purposes of this Indenture any action may be taken by
the Holders of a specified percentage in aggregate principal amount of Securities of all Series or
all Series affected by a particular action at the time outstanding and, at such time, there are
outstanding Securities of any Series which are denominated in a coin or currency other than Dollars
(including ECUs), then the principal amount of Securities of such Series which shall be deemed to
be outstanding for the purpose of taking such action shall be that amount of Dollars that could be
obtained for such amount at the Market Exchange Rate at such time. For purposes of this Section
11.15, “Market Exchange Rate” shall mean the noon Dollar buying rate in New York City for cable
transfers of that currency as published by the Federal Reserve Bank of New York; provided, however,
in the case of ECUs, Market Exchange Rate shall mean the rate of exchange determined by the
Commission of the European Union (or any successor thereto) as published in the Official Journal of
the European Union (such publication or any successor publication, the “Journal”). If such Market
Exchange Rate is not available for any reason with respect to such currency, the Trustee shall use,
in its sole discretion and without liability on its part, such quotation of the Federal Reserve
Bank
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of New York or, in the case of ECUs, the rate of exchange as published in the Journal, as of
the most recent available date, or quotations or, in the case of ECUs, rates of exchange from one
or more major banks in The City of New York or in the country of issue of the currency in question
or, in the case of ECUs, in Luxembourg or such other quotations or, in the case of ECUs, rates of
exchange as the Trustee, upon consultation with the Company, shall deem appropriate. The
provisions of this paragraph shall apply in determining the equivalent principal amount in respect
of Securities of a Series denominated in currency other than Dollars in connection with any action
taken by Holders of Securities pursuant to the terms of this Indenture.
All decisions and determinations of the Trustee regarding the Market Exchange Rate or any
alternative determination provided for in the preceding paragraph shall be in its sole discretion
and shall, in the absence of manifest error, be conclusive to the extent permitted by law for all
purposes and irrevocably binding upon the Company and all Holders.
Section 11.16
Judgment Currency.
The Company agrees, to the fullest extent that it may effectively do so under applicable law,
that (a) if for the purpose of obtaining judgment in any court it is necessary to convert the sum
due in respect of the principal of or interest or other amount on the Securities of any Series (the
“Required Currency”) into a currency in which a judgment will be rendered (the “Judgment
Currency”), the rate of exchange used shall be the rate at which in accordance with normal banking
procedures the Trustee could purchase in The City of New York the Required Currency with the
Judgment Currency on the day on which final unappealable judgment is entered, unless such day is
not a New York Banking Day, then, the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee could purchase in The City of New York the
Required Currency with the Judgment Currency on the New York Banking Day preceding the day on which
final unappealable judgment is entered and (b) its obligations under this Indenture to make
payments in the Required Currency (i) shall not be discharged or satisfied by any tender, any
recovery pursuant to any judgment (whether or not entered in accordance with subsection (a)), in
any currency other than the Required Currency, except to the extent that such tender or recovery
shall result in the actual receipt, by the payee, of the full amount of the Required Currency
expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or
additional cause of action for the purpose of recovering in the Required Currency the amount, if
any, by which such actual receipt shall fall short of the full amount of the Required Currency so
expressed to be payable, and (iii) shall not be affected by judgment being obtained for any other
sum due under this Indenture. For purposes of the foregoing, “New York Banking Day” means any day
except a Saturday, Sunday or a legal holiday in The City of New York on which banking institutions
are authorized or required by law, regulation or executive order to close.
Section 11.17
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 a specified percentage in
principal amount of the Securityholders of any or all Series may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by such
specified percentage of Securityholders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or instruments and 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 and so voting at any such
meeting. Proof of execution of any instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Sections 7.1 and 7.2)
conclusive in favor of the Trustee and the Company, if made in the manner provided in this
Section 11.17.
(b) Subject to Sections 7.1 and 7.2, the execution of any instrument by a
Securityholder or his agent or proxy may be proved in accordance with such reasonable rules
and regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee. The holding of Registered Securities shall be proved by the
Security register or by a certificate of the registrar thereof.
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(c) The Company, the Trustee and any agent of the Company or the Trustee may deem and
treat the person in whose name any Security shall be registered upon the Security register
for such series as the absolute owner of such Security (whether or not such Security shall
be overdue and notwithstanding any notation of ownership or other writing thereon) for the
purpose of receiving payment of or on account of the principal of and, subject to the
provisions of this Indenture, interest on such Security and for all other purposes; and
neither the Company nor the Trustee nor any agent of the Company or the Trustee shall be
affected by any notice to the contrary. The Company, the Trustee and any agent of the
Company or the Trustee may treat the Holder of any Bearer Security as the absolute owner of
such Bearer Security (whether or not such Bearer Security shall be overdue) for the purpose
of receiving payment thereof or on account thereof and for all other purposes, and neither
the Company, the Trustee, nor any agent of the Company or the Trustee shall be affected by
any notice to the contrary. All such payments so made to any such person, or upon his
order, shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy
and discharge the liability for moneys payable upon any such Bearer Security.
(d) At any time prior to (but not after) the evidencing to the Trustee, as provided in
this Section 11.17, of the taking of any action by the Holders of the percentage in
aggregate principal amount of the Securities of any or all series, as the case may be,
specified in this Indenture in connection with such action, any Holder of a Security the
serial number of which is shown by the evidence to be included among the serial numbers of
the Securities the Holders of which have consented to such action may, by filing written
notice at the Corporate Trust Office and upon proof of holding as provided in this Article,
revoke such action so far as concerns such Security. Except as aforesaid, any such action
taken by the Holder of any Security shall be conclusive and binding upon such Holder and
upon all future Holders and owners of such Security and of any Securities issued in
exchange or substitution therefor or on registration of transfer thereof, irrespective of
whether or not any notation in regard thereto is made upon any such Security. Any action
taken by the Holders of the percentage in aggregate principal amount of the Securities of
any or all series, as the case may be, specified in this Indenture in connection with such
action shall be conclusively binding upon the Company, the Trustee and the Holders of all
the Securities affected by such action.
ARTICLE 12
SINKING FUNDS
Section 12.1
Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for the retirement of
the Securities of a Series, except as otherwise permitted or required by any form of Security of
such Series issued pursuant to this Indenture.
The minimum amount of any sinking fund payment provided for by the terms of the Securities of
any Series is herein referred to as a “mandatory sinking fund payment” and any other amount
provided for by the terms of Securities of such Series is herein referred to as an “optional
sinking fund payment.” If provided for by the terms of Securities of any Series, the cash amount of
any sinking fund payment may be subject to reduction as provided in Section 12.2. Each sinking fund
payment shall be applied to the redemption of Securities of any Series as provided for by the terms
of the Securities of such Series.
Section 12.2
Satisfaction of Sinking Fund Payments with Securities.
The Company may, in satisfaction of all or any part of any sinking fund payment with respect
to the Securities of any Series to be made pursuant to the terms of such Securities (1) deliver
outstanding Securities of such Series to which such sinking fund payment is applicable (other than
any of such Securities previously called for mandatory sinking fund redemption) and (2) apply as
credit Securities of such Series to which such sinking fund payment is applicable and which have
been redeemed either at the election of the Company pursuant to the terms of such Series of
Securities (except pursuant to any mandatory sinking fund) or through the application of permitted
optional sinking fund payments or other optional redemptions pursuant to the terms of such
Securities, provided that such Securities have not been previously so credited. Such Securities
shall be received by the Trustee, together with an Officers’ Certificate with respect thereto, not
later than 15 days prior to the date on which the Trustee begins the
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process of selecting Securities for redemption, and shall be credited for such purpose by the
Trustee at the price specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly. If as a result of
the delivery or credit of Securities in lieu of cash payments pursuant to this Section 12.2, the
principal amount of Securities of such Series to be redeemed in order to exhaust the aforesaid cash
payment shall be less than $100,000, the Trustee need not call Securities of such Series for
redemption, except upon receipt of a Company Order that such action be taken, and such cash payment
shall be held by the Trustee or a Paying Agent and applied to the next succeeding sinking fund
payment, provided, however, that the Trustee or such Paying Agent shall from time to time upon
receipt of a Company Order pay over and deliver to the Company any cash payment so being held by
the Trustee or such Paying Agent upon delivery by the Company to the Trustee of Securities of that
Series purchased by the Company having an unpaid principal amount equal to the cash payment
required to be released to the Company.
Section 12.3
Redemption of Securities for Sinking Fund.
Not less than 45 days (unless otherwise indicated in the Board Resolution, supplemental
indenture hereto or Officers’ Certificate in respect of a particular Series of Securities) prior to
each sinking fund payment date for any Series of Securities, the Company will deliver to the
Trustee an Officers’ Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that Series pursuant to the terms of that Series, the portion thereof, if any, which is
to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by
delivering and crediting of Securities of that Series pursuant to Section 12.2, and the optional
amount, if any, to be added in cash to the next ensuing mandatory sinking fund payment, and the
Company shall thereupon be obligated to pay the amount therein specified. Not less than 30 days
(unless otherwise indicated in the Board Resolution, Officers’ Certificate or supplemental
indenture in respect of a particular Series of Securities) 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 3.2 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 3.3. Such notice having
been duly given, the redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 3.4, 3.5 and 3.6.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of
the day and year first above written.
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BROOKDALE SENIOR LIVING INC.
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By:
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/s/ T. Andrew Smith
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Name:
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T. Andrew Smith
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Its:
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EVP
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AMERICAN STOCK TRANSFER
& TRUST COMPANY, LLC, as Trustee
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By:
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/s/ David H. Brill
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Name:
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David H. Brill
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Its:
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General Counsel and Secretary
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EXHIBIT 4.2
EXECUTION VERSION
BROOKDALE SENIOR LIVING INC.
as Issuer
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC
as Trustee
SUPPLEMENTAL INDENTURE
Dated as of June 14, 2011
$275,000,000
2.75% Convertible Senior Notes due 2018
TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
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Section 1.01. Scope of Supplemental Indenture
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2
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Section 1.02. Definitions
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2
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Section 1.03. Rules of Construction
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8
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ARTICLE II
THE SECURITIES
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Section 2.01. Title and Terms; Payments
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8
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Section 2.02. Book-Entry Provisions for Global Notes
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9
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Section 2.03. Reporting Requirement
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10
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ARTICLE III
FUNDAMENTAL CHANGES AND REPURCHASES THEREUPON
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Section 3.01. Repurchase at Option of Holders Upon a Fundamental Change
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10
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Section 3.02. Effect of Fundamental Change Purchase Notice
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13
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Section 3.03. Withdrawal of Fundamental Change Purchase Notice
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13
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Section 3.04. Deposit of Fundamental Change Purchase Price
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14
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Section 3.05. Notes Repurchased in Whole or in Part
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14
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Section 3.06. Covenant to Comply With Applicable Laws Upon Repurchase of Notes
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14
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Section 3.07. Repayment to the Company
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14
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ARTICLE IV
CONVERSION
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Section 4.01. Right to Convert
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15
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Section 4.02. Conversion Procedures
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17
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Section 4.03. Settlement Upon Conversion
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19
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Section 4.04. Adjustment of Conversion Rate
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21
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Section 4.05. Exchange in Lieu of Conversion
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30
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Section 4.06. Adjustments Upon Certain Fundamental Changes
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30
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Section 4.07. Effect of Recapitalization, Reclassification, Consolidation, Merger or Sale
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32
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Section 4.08. Taxes on Shares Issued
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33
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i
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Page
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Section 4.09. Reservation of Shares; Shares to be Fully Paid; Compliance With Governmental
Requirements; Listing of Common Stock
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33
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Section 4.10. Responsibility of Trustee
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33
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Section 4.11. Stockholder Rights Plan
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34
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ARTICLE V
REMEDIES
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Section 5.01. Events of Default
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34
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Section 5.02. Additional Interest
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36
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Section 5.03. Acceleration
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36
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ARTICLE VI
SATISFACTION AND DISCHARGE
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Section 6.01. Satisfaction and Discharge of the Supplemental Indenture
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37
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ARTICLE VII
SUPPLEMENTAL INDENTURES
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Section 7.01. Amendments or Supplements Without Consent of Holders
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38
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Section 7.02. Amendments, Supplements or Waivers With Consent of Holders
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39
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Section 7.03. Notice of Amendment or Supplement
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39
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ARTICLE VIII
INAPPLICABLE PROVISIONS OF THE ORIGINAL INDENTURE
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Section 8.01. Redemption
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40
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Section 8.02. Legend
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40
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Section 8.03. Legal Defeasance and Covenant Defeasance
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40
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Section 8.04. Subordination
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40
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Section 8.05. Securities in a Foreign Currency
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40
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Section 8.06. Sinking Funds
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40
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Section 8.07. When Company May Merge
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40
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ARTICLE IX
MISCELLANEOUS
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Section 9.01. Governing Law
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40
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Section 9.02. Payments on Business Days
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41
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Section 9.03. No Security Interest Created
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41
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Section 9.04. Trust Indenture Act
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41
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Section 9.05. Benefits of Indenture
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41
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ii
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Page
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Section 9.06. Calculations
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41
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Section 9.07. Table of Contents, Headings, Etc
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41
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Section 9.08. Execution in Counterparts
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42
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Section 9.09. Severability
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42
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EXHIBITS
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Exhibit A Form of Note
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A-1
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Exhibit B Form of Notice of Conversion
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B-1
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Exhibit C Form of Fundamental Change Purchase Notice
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C-1
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Exhibit D Form of Assignment and Transfer
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D-1
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SUPPLEMENTAL INDENTURE, dated as of June 14, 2011, between Brookdale Senior Living Inc., a
Delaware corporation (the “Company”), and American Stock Transfer & Trust Company, LLC, as trustee
(the “Trustee”) under the Indenture dated as of June 14, 2011, between the Company and the Trustee
(as amended or supplemented from time to time in accordance with the terms thereof, the “Original
Indenture”).
RECITALS OF THE COMPANY
WHEREAS, the Original Indenture provides, among other things, for the issuance, from time to
time, of the Company’s Senior Securities, in an unlimited aggregate principal amount, in one or
more series to be established by the Company under, and authenticated and delivered as provided in,
the Original Indenture;
WHEREAS, Section 9.1 of the Original Indenture provides for the Company and the Trustee to
enter into an indenture supplemental to the Original Indenture to establish the form and terms of
Securities of any series as contemplated by Section 2.2 of the Original Indenture;
WHEREAS, the Board of Directors has duly adopted resolutions authorizing the Company to
execute and deliver this Supplemental Indenture;
WHEREAS, pursuant to the terms of the Original Indenture, the Company desires to establish a
new series of its Securities to be known as its “2.75% Convertible Senior Notes due 2018” (the
“Notes”), the form and substance of such Notes and the terms, provisions and conditions thereof to
be set forth as provided in the Original Indenture and this Supplemental Indenture;
WHEREAS, the Form of Note, the certificate of authentication to be borne by each Note and the
Form of Notice of Conversion, Form of Fundamental Change Purchase Notice and Form of Assignment and
Transfer contemplated under the terms of the Notes are to be substantially in the forms hereinafter
provided; and
WHEREAS, the Company has requested that the Trustee execute and deliver this Supplemental
Indenture, and all requirements necessary to make (i) this Supplemental Indenture a valid
instrument in accordance with its terms, and (ii) the Notes, when executed by the Company and
authenticated and delivered by the Trustee, the valid obligations of the Company, have been
performed, and the execution and delivery of this Supplemental Indenture have been duly authorized
in all respects.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH, for and in consideration of the
premises and the purchases of the Notes by the Holders thereof, it is mutually agreed, for the
benefit of the Company and the equal and proportionate benefit of all Holders of the Notes, as
follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01.
Scope of Supplemental Indenture
.
The changes, modifications and supplements to the Original Indenture effected by this
Supplemental Indenture shall be applicable only with respect to, and shall only govern the terms
of, the Notes, which may be issued from time to time, and shall not apply to any other Securities
that may be issued under the Original Indenture unless a supplemental indenture with respect to
such other Securities specifically incorporates such changes, modifications and supplements. The
provisions of this Supplemental Indenture shall supersede any corresponding provisions in the
Original Indenture.
Section 1.02.
Definitions
.
Except as otherwise provided in this Supplemental Indenture, all words, terms and phrases
defined in the Original Indenture (but not otherwise defined herein) shall have the same meaning
herein as in the Original Indenture. To the extent terms defined herein differ from terms defined
in the Original Indenture the terms defined herein will govern for purposes of this Supplemental
Indenture and the Notes. For all purposes of this Supplemental Indenture and the Notes, except as
otherwise expressly provided or unless the context otherwise requires:
“Additional Interest” has the meaning specified in Section 5.02.
“Additional Notes” has the meaning specified in Section 2.01.
“Additional Shares” has the meaning specified in Section 4.06(a).
“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on
which the banking institutions in New York City are authorized or obligated by law or executive
order to close or be closed.
“Capital Stock” means (a) in the case of a corporation, corporate stock, (b) in the case of an
association or business entity, shares, interests, participations, rights or other equivalents
(however designated) of corporate stock, (c) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and (d) any other
interest or participation that confers on a person the right to receive a share of the profits and
losses of, or distribution of the assets of, the issuing person.
“Cash Settlement Averaging Period” with respect to any Note means (i) if the relevant
Conversion Date occurs prior to March 15, 2018, the 30 consecutive Trading Day period beginning on,
and including, the third Trading Day immediately following the related Conversion Date, and (ii) if
the relevant Conversion Date occurs during the period beginning on, and including, March 15, 2018
and ending at close of business, on the second Trading Day immediately prior to the Stated
Maturity, the 30 consecutive trading day period beginning on, and including, the 32nd Scheduled
Trading Day prior to the Stated Maturity.
2
“close of business” means 5:00 p.m. (New York City time).
“Common Stock” means the shares of common stock, par value $0.01 per share, of the Company as
such shares of common stock exist on the date of this Supplemental Indenture, subject to Section
4.07, or such other Capital Stock into which the Company’s common stock may be reclassified,
converted or otherwise changed pursuant to Section 4.07.
“Conversion Agent” means the Trustee or such other office or agency designated by the Company
where Notes may be presented for conversion. The Conversion Agent shall initially be the Trustee.
“Conversion Date” has the meaning specified in Section 4.02(b).
“Conversion Notice” has the meaning specified in Section 4.02(b)(i).
“Conversion Price” means, in respect of each Note, as of any date, $1,000,
divided
by the
Conversion Rate as of such date.
“Conversion Rate” means, initially, 34.1006 shares of Common Stock per $1,000 principal amount
of Notes, subject to adjustment as set forth herein.
“Conversion Trigger Price” has the meaning specified in Section 4.01(a)(i).
“Custodian” has the meaning specified in Section 5.01.
“Daily Conversion Value” means, for each of the 30 consecutive Trading Days during the Cash
Settlement Averaging Period, one thirtieth (1/30th) of the product of (i) the applicable Conversion
Rate on such Trading Day multiplied by (ii) the Daily VWAP of the Common Stock on such Trading Day.
“Daily Measurement Value” means, the quotient of the Specified Dollar Amount, if any,
divided
by 30.
“Daily Settlement Amount” has the meaning specified in Section 4.03(b).
“Daily VWAP” means, in respect of the Common Stock on any Trading Day, the per share
volume-weighted average price on the New York Stock Exchange as displayed under the heading
“Bloomberg VWAP” on Bloomberg page <BKD.N Equity AQR> (or its equivalent successor if such
page is not available) in respect of the period from the scheduled open of trading until the
scheduled close of trading of the primary trading session on such Trading Day (or if such
volume-weighted average price is unavailable, the market value of one share of Common Stock on such
Trading Day as determined by the Board of Directors in a commercially reasonable manner, using a
volume-weighted average price method). The Daily VWAP shall be determined without regard to
after-hours trading or any other trading outside of the regular trading session.
“Definitive Notes” means certificated Notes registered in the name of the Holder thereof.
3
“Depositary” or “Depository” has the meaning set forth in the Original Indenture, which shall
initially be DTC until a successor Depositary shall have become such pursuant to the applicable
provisions of the Indenture, and thereafter “Depositary” shall mean such successor Depositary.
“Designated Institution” has the meaning specified in Section 4.05.
“effective date” has the meaning specified in Section 4.06(b).
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“Ex-Dividend Date” means, in respect of any issuance, dividend or distribution, the first date
on which the shares of Common Stock trade on the applicable exchange or in the applicable market,
regular way, without the right to receive such issuance, dividend or distribution from the Company,
whether directly or indirectly by due bills or otherwise.
“Event of Default” has the meaning specified in Section 5.01.
“Expiration Date” has the meaning specified in Section 4.04(e).
“Expiration Time” has the meaning specified in Section 4.04(e).
“Fundamental Change” means the occurrence of any of the following at any time after the Notes
are originally issued:
(1) any “person” or “group” (within the meaning of Section 13(d) of the Exchange Act) other
than the Company or its Subsidiaries files a Schedule TO or any schedule, form or report under the
Exchange Act disclosing that such person or group has become the direct or indirect ultimate
“beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the Company’s common equity
representing more than 50% of the voting power of the Company’s common equity;
(2) consummation of any binding share exchange, exchange offer, tender offer, consolidation or
merger of the Company pursuant to which all or substantially all of the Common Stock will be
converted into cash, securities or other property or any sale, lease or other transfer in one
transaction or a series of related transactions of all or substantially all of the consolidated
assets of the Company and its Subsidiaries, taken as a whole, to any Person other than one or more
of the Company’s Subsidiaries; (any such exchange, offer, consolidation, merger, transaction or
series of transactions being referred to in this definition as an “event”);
provided
,
however
, that
any such event where the holders of more than 50% of the outstanding shares of Common Stock
immediately prior to such event, own, directly or indirectly, more than 50% of all classes of the
common equity of the continuing or surviving person or transferee or the parent thereof immediately
after such event, with such holders’ proportional voting power immediately after such event being
in substantially the same proportions as their respective voting power before such event, shall not
be a Fundamental Change;
4
(3) the stockholders of the Company approve any plan or proposal for the liquidation or
dissolution of the Company; or
(4) the Common Stock (or other common stock into which the Notes are then convertible) ceases
to be listed on at least one U. S. national securities exchange,
provided
,
however
, in the case of an event described in clause (2) above, if (a) at least 90% of
the consideration, excluding cash payments for fractional shares, in the transaction or event that
would otherwise have constituted a Fundamental Change consists of shares of Publicly Traded
Securities, and (b) as a result of the event, the Notes become convertible into such Publicly
Traded Securities, excluding cash payments for fractional shares (subject to the provisions of
Section 4.03), such event shall not be a Fundamental Change;
provided
,
further
, if any transaction
in which the Common Stock is replaced by the securities of another entity shall occur, following
completion of any related Make-Whole Fundamental Change period and any related Fundamental Change
Purchase Date, references to the Company in this definition shall instead apply to such other
entity; and
provided
,
further
, that any filing that would otherwise constitute a Fundamental Change
under clause (1) above shall not constitute a Fundamental Change if (x) the filing occurs in
connection with a transaction in which the Common Stock is replaced by the securities of another
entity (including a parent entity) and (y) no filing of Schedule TO (or any schedule, form or
report) is made or is in effect with respect to common equity representing more than 50% of the
voting power of such other entity.
“Fundamental Change Company Notice” has the meaning specified in Section 3.01(b).
“Fundamental Change Purchase Date” has the meaning specified in Section 3.01(a).
“Fundamental Change Purchase Notice” has the meaning specified in Section 3.01(a)(i).
“Fundamental Change Purchase Price” has the meaning specified in Section 3.01(a).
“Global Note” means any Note that is a Registered Global Security.
“Indenture” means the Original Indenture, as originally executed and as amended or
supplemented from time to time by one or more indentures supplemental thereto applicable to the
Notes, including this Supplemental Indenture, entered into pursuant to the applicable provisions of
the Indenture, including, for all purposes of this instrument and any such supplemental indenture,
the provisions of the Trust Indenture Act that are deemed to be a part of and govern the Original
Indenture, this Supplemental Indenture and any other such supplemental indenture, respectively.
“Initial Notes” has the meaning specified in Section 2.01.
“Interest Payment Date” means, with respect to the payment of interest on the Notes, each June
15 and December 15 of each year.
“Last Reported Sale Price” of the Common Stock on any date means the closing sale price per
share of Common Stock (or if no closing sale price is reported, the average of the bid and ask
prices or, if more than one in either case, the average of the average bid and the average
5
ask prices) on that date as reported in composite transactions for the principal U.S.
securities exchange on which the Common Stock is listed for trading. The Last Reported Sale Price
shall be determined without reference to after-hours or extended market trading. If the Common
Stock is not listed for trading on a U.S. securities exchange on the relevant date, the “Last
Reported Sale Price” shall be the last quoted bid price for the Common Stock in the
over-the-counter market on the relevant date as reported by OTC Markets Group, Inc. or a similar
organization. If the Common Stock is not so quoted, the “Last Reported Sale Price” will be
determined by a U.S. nationally recognized independent investment banking firms selected by the
Company for this purpose.
“Make-Whole Fundamental Change” means any transaction or event that constitutes a Fundamental
Change under clause (1) or (2) of the definition of Fundamental Change thereof (in the case of any
Fundamental Change described in clause (2) of the definition thereof, determined without regard to
the proviso in such definition, but subject to the clauses (a) and (b) immediately following clause
(4) of the definition thereof).
“Market Disruption Event” means (i) a failure by the primary exchange or quotation system on
which the Common Stock trades or is quoted to open for trading during its regular trading session
on any Trading Day or (ii) the occurrence or existence, prior to 1:00 p.m., New York City time, on
any Trading Day for the Common Stock, for more than a one half-hour period in the aggregate, of any
suspension or limitation imposed on trading (by reason of movements in price exceeding limits
permitted by the stock exchange or otherwise) in the Common Stock or in any options, contracts or
future contracts relating to the Common Stock.
“measurement period” has the meaning specified in Section 4.01(a)(ii).
“Merger Event” has the meaning specified in Section 4.07(a).
“Note” or “Notes” has the meaning specified in the fourth paragraph of the recitals of this
Supplemental Indenture, and shall include any Additional Notes issued pursuant to Section 2.01
hereof.
“open of business” means 9:00 a.m. (New York City time).
“Original Indenture” has the meaning specified in the first paragraph of this Supplemental
Indenture.
“Paying Agent” has the meaning set forth in the Original Indenture, which shall initially be
the Trustee, and shall be the Person authorized by the Company to pay the principal amount of,
interest on, or Fundamental Change Purchase Price of, any Notes on behalf of the Company.
“Prospectus”
means the prospectus dated June 7, 2011 as supplemented by the final prospectus
supplement dated June 8, 2011 relating to the offering and sale of the Notes.
“Publicly Traded Securities” means, in respect of a transaction described in clause (3) of the
definition of Fundamental Change, shares of common stock traded on a U.S. national securities
exchange, or which shall be so traded immediately following the transaction or transactions in
connection with which this definition is applied.
6
“Regular Record Date” means, with respect to the payment of interest on the Notes, the June 1
(whether or not a Business Day) immediately preceding an Interest Payment Date on June 15 and the
December 1 (whether or not a Business Day) immediately preceding an Interest Payment Date on
December 15.
“Reference Property” has the meaning specified in Section 4.07(a).
“Scheduled Trading Day” means a day that is scheduled to be a Trading Day. If the Common Stock
is not listed or admitted for trading, “Scheduled Trading Day” means a Business Day.
“Settlement Amount” has the meaning specified in Section 4.03(a).
“Settlement Notice” has the meaning specified in Section 4.03(a)(iii).
“Significant Subsidiary” means, at any date of determination, any Subsidiary that would
constitute a “significant subsidiary” within the meaning of Article 1 of Regulation S-X promulgated
under the Securities Act as in effect on the date of this Supplemental Indenture.
“Specified Dollar Amount” means an amount of cash per $1,000 principal amount of a converted
Note to be received upon conversion as specified by the Company in the notice related to such
converted Note.
“Spin-Off” has the meaning specified in Section 4.04(c).
“Stated Maturity” means, with respect to any Note and the payment of the principal amount
thereof, June 15, 2018.
“Stock Price” has the meaning specified in Section 4.06(b).
“Trading Day” means a day on which (i) trading in the Common Stock generally occurs on the
primary exchange or quotation system on which the Common Stock then trades or is quoted, and (ii)
there is no Market Disruption Event. If the Common Stock (or other security for which a Last
Reported Sale Price must be determined) is not listed or traded, “Trading Day” means a Business
Day.
“Trading Price” per $1,000 principal amount of the Notes on any date of determination means
the average of the secondary market bid quotations obtained by the Company for $5,000,000 principal
amount of the Notes at approximately 3:30 p.m., New York City time, on such determination date from
three independent U.S. nationally recognized securities dealers selected by the Company;
provided
that, if three such bids cannot reasonably be obtained by the Company but only two such bids are
obtained, then the average of the two bids shall be used, and if only one such bid can reasonably
be obtained by the Company, that one bid shall be used. If the Company cannot reasonably obtain at
least one bid for $5,000,000 principal amount of the Notes from a U.S. nationally recognized
securities dealer, then the Trading Price per $1,000 principal amount of Notes shall be deemed to
be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the
applicable Conversion Rate.
7
“Trading Price Condition” has the meaning specified in Section 4.01(a)(ii).
“U.S.” means the United States of America.
“Valuation Period” has the meaning specified in Section 4.04(c).
Section 1.03.
Rules of Construction
.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it herein and all terms defined in the Original
Indenture (but not otherwise defined herein) have the meanings assigned to them therein;
(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with
GAAP and all accounting determinations shall be made in accordance with GAAP;
(3) “or” is not exclusive and “including” means “including without limitation”;
(4) words in the singular include the plural, and in the plural include the singular;
(5) “herein,” “hereof” and “hereunder,” and other words of similar import, refer to this
Supplemental Indenture as a whole (including any Board Resolution or supplemental indenture
relating to the relevant Series) and not to any particular Article, Section or other subdivision;
(6) all exhibits are incorporated by reference herein and expressly made a part of this
Indenture; and
(7) any transaction or event shall be considered “permitted by” or made “in accordance with”
or “in compliance with” this Indenture or any particular provision thereof if such transaction or
event is not expressly prohibited by this Indenture or such provision, as the case may be.
ARTICLE II
THE SECURITIES
Section 2.01.
Title and Terms; Payments
.
There is hereby established pursuant to Sections 2.1 and 2.2 of the Original Indenture a
series of Securities designated the “2.75% Convertible Senior Notes due 2018” in an initial
aggregate principal amount to $275,000,000 (as increased by the aggregate principal amount of any
Additional Notes issued pursuant to this section 2.01), except for Notes authenticated and
delivered upon registration or transfer of, or in exchange for, or in lieu of other Notes pursuant
to this Indenture. The Notes shall be issued in minimum denominations of $2,000 and integral
multiples of $1,000 in excess thereof. No conversion or repurchase shall be permitted if it would
result in the issuance of a Note with a minimum denomination of less than $2,000.
8
The principal amount of Notes then outstanding shall be payable at Stated Maturity. The Notes
shall bear interest at a rate of 2.75% per annum. Interest shall accrue from the initial issuance
date of the Notes, and shall be payable semi-annually in arrears on June 15 and December 15 of each
year, beginning December 15, 2011.
The Company may, without the consent of the Holders of the Notes, hereafter issue additional
notes (“Additional Notes”) under the Indenture with the same terms and with the same CUSIP numbers
as the Notes issued on the date of this Supplemental Indenture (the “Initial Notes”) in an
unlimited aggregate principal amount;
provided
that, no such Additional Notes may be issued unless
they will be fungible with the Initial Notes for United States federal income tax and securities
law purposes. Any such Additional Notes shall constitute a single series together with the Initial
Notes for all purposes hereunder, including, without limitation, for purposes of any waivers,
supplements or amendments to the Indenture requiring the approval of Holders of the Notes and any
offers to purchase the Notes. Holders of such Additional Notes shall vote together with the
Holders of the Notes as one class. The Form of Note, the Form of Notice of Conversion, the Form of
Fundamental Change Purchase Notice and the Form of Assignment and Transfer shall be substantially
as set forth in Exhibits A, B, C and D, respectively, hereto, which are incorporated into and shall
be deemed a part of this Supplemental Indenture, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by the Indenture, and
may have such letters, numbers or other marks of identification and such legends or endorsements
placed thereon as may be required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined to be necessary or appropriate by the officers of the Company
executing such Notes, as evidenced by their execution of the Notes.
The Company shall pay the principal of and interest on any Global Note in immediately
available funds to the Depositary or its nominee, as the case may be, as the registered Holder of
such Global Note. The Company shall pay the principal of any Definitive Notes at the office or
agency designated by the Company for that purpose. The Company has initially designated the Trustee
as its Paying Agent and Registrar in respect of the Notes and its agency in New York, New York as a
place where Notes may be presented for payment or for registration of transfer. The Company may,
however, change the Paying Agent or Registrar for the Notes without prior notice to the Holders
thereof, and the Company may act as Paying Agent or Registrar for the Notes. Interest on any
Definitive Notes shall be payable to Holders of Definitive Notes either by check mailed to each
Holder at its address in the Register or, upon application by a Holder to the Registrar not later
than the relevant Regular Record Date, by wire transfer in immediately available funds to that
Holder’s account within the United States, which application shall remain in effect until that
Holder notifies, in writing, the Registrar to the contrary.
Notwithstanding anything to the contrary in the Original Indenture, the provisions of the
Original Indenture relating to the Service Agent shall not apply to the Notes.
Section 2.02.
Book-Entry Provisions for Global Notes
.
(a) The Notes initially shall be issued in the form of one or more Global Notes without
interest coupons (i) registered in the name of Cede & Co., as nominee of the Depositary and (ii)
delivered to the Trustee as custodian for the Depositary.
9
(b) Definitive Notes shall be transferred to all beneficial owners in exchange for their
beneficial interests in a Global Note only if (i) the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for the Global Note and a successor depository is
not appointed by the Company within 90 days of such notice, (ii) the Depositary ceases to be
registered as a clearing agency under the Exchange Act and a successor depository is not appointed
by the Company within 90 days of such cessation, or (iii) an Event of Default has occurred and is
continuing. Definitive Notes shall not be otherwise issuable. For the avoidance of doubt, this
Section 2.02 supersedes the provisions of Section 2.14.2 of the Original Indenture to the extent
inconsistent therewith.
Section 2.03.
Reporting Requirement
.
The Company shall furnish to the Trustee within 15 days after the same is required to be filed
with the SEC (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act),
copies of the quarterly and annual reports and of the information, documents and other reports, if
any, that the Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act. Any quarterly or annual report or other information, document or other report that
the Company files with the SEC pursuant to Section 13 or 15(d) of the Exchange Act on the SEC’s
EDGAR system (or any successor system thereto) shall be deemed furnished as of the time of such
filing. The Trustee does not have the duty to review such information, documents or reports, is not
considered to have notice of the content of such information, documents or reports and does not
have a duty to verify the accuracy of such information, documents or reports. For the avoidance of
doubt, this Section 2.03 supersedes the provisions of Section 4.2 of the Original Indenture.
ARTICLE III
FUNDAMENTAL CHANGES AND REPURCHASES THEREUPON
Section 3.01.
Repurchase at Option of Holders Upon a Fundamental Change
.
(a)
Generally
. If a Fundamental Change occurs at any time, then each Holder of Notes
shall have the right, at such Holder’s option, to require the Company to purchase for cash any or
all of such Holder’s Notes, or any portion of the principal amount thereof, that is equal to an
integral multiple of $1,000, on a date specified by the Company that is not less than 20 Business
Days after the date of and no later than the 35th Business Day following the date of delivery of
the Fundamental Change Company Notice (such date, the “Fundamental Change Purchase Date”), at a
purchase price equal to 100% of the principal amount thereof, together with accrued and unpaid
interest thereon, including any Additional Interest, to, but not including, the Fundamental Change
Purchase Date (the “Fundamental Change Purchase Price”);
provided
,
however
, that if a Fundamental
Change Purchase Date is after a Regular Record Date and on or prior to the Interest Payment Date
to which such Regular Record Date relates, the interest payable in respect of such Interest
Payment Date shall be payable to the Holders of record as of the corresponding Regular Record Date
and the Fundamental Change Purchase Price shall be equal to 100% of the principal amount of the
Notes to be repurchased pursuant to this Article 3 and shall not include any accrued and unpaid
interest, including any
10
Additional Interest. The requirement for the Company to repurchase any Notes on the
Fundamental Change Purchase Date shall be subject to Section 3.06.
Repurchases of Notes under this Section 3.01 shall be made, at the option of the Holder
thereof, upon:
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(i)
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delivery to the Paying Agent by a Holder of a duly completed notice (the
“Fundamental Change Purchase Notice”) in the form set forth on the reverse of the Note
as Exhibit C thereto, if the Notes are Definitive Notes, or in compliance with the
Depositary’s procedures for tendering interests in Global Notes, if the Notes are not
Definitive Notes, in each case prior to the close of business on the Business Day
immediately preceding the Fundamental Change Purchase Date; and
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(ii)
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delivery of the Notes, in the case of Definitive Notes, to the Paying Agent
appointed by the Company (together with all necessary endorsements for transfer), or
book-entry transfer of the Notes, in compliance with the procedures of the Depositary,
such delivery or transfer being a condition to receipt by the Holder of the Fundamental
Change Purchase Price therefor.
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The Fundamental Change Purchase Notice in respect of any Notes to be repurchased shall state:
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(i)
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if such Notes are Definitive Notes, the certificate numbers of such Notes;
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(ii)
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the portion of the principal amount of such Notes to be repurchased, which must
be $1,000 or an integral multiple thereof; and
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(iii)
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that such Notes are to be repurchased by the Company pursuant to the
applicable provisions of the Notes and the Indenture;
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provided
,
however
, that if such Notes are in global form, the Fundamental Change Purchase Notice
must also comply with appropriate procedures of the Depositary.
Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the
Fundamental Change Purchase Notice contemplated by this Section 3.01 shall have the right to
withdraw, in whole or in part, such Fundamental Change Purchase Notice at any time prior to the
close of business on the Business Day immediately preceding the Fundamental Change Purchase Date by
delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 3.03.
Notwithstanding the foregoing, the Company shall not be required to repurchase the Notes in
accordance with this Section 3.01 if a third party makes an offer in the manner, at the times and
otherwise in compliance with the requirements set forth in the Indenture and purchases all Notes
validly tendered and not withdrawn under such fundamental change repurchase offer.
The Paying Agent shall promptly notify the Company of the receipt by it of any Fundamental
Change Purchase Notice or written notice of withdrawal thereof.
11
(b)
Fundamental Change Company Notice
. On or before the 20th day after the date on
which Fundamental Change becomes effective, which Fundamental Change results in Holders of Notes
having the right to cause the Company to repurchase their Notes (the “effective date”), the
Company shall provide to all Holders of record of the Notes, the Trustee and the Paying Agent (in
the case of any Paying Agent other than the Trustee) a notice (the “Fundamental Change Company
Notice”) of the occurrence of such Fundamental Change and of the Repurchase right at the option of
the Holders arising as a result thereof. Such notice shall be given pursuant to 11.2 of the
Original Indenture, in the case of any Global Notes, in accordance with the procedures of the
Depositary for providing notices. Simultaneously with providing such Fundamental Change Company
Notice, the Company shall issue a press release (and make the press release available on the
Company’s website) and shall publish such press release through a public medium customary for such
press releases.
Each Fundamental Change Company Notice shall specify:
(i) the events causing a Fundamental Change;
(ii) the effective date of the Fundamental Change;
(iii) whether such Fundamental Change is a Make-Whole Fundamental Change, in which case
the adjustments in Section 4.06 shall be applicable;
(iv) the last date on which a Holder of Notes may exercise the repurchase right
pursuant to this Article 3;
(v) the Fundamental Change Purchase Price;
(vi) the Fundamental Change Purchase Date;
(vii) if applicable, the name and address of the Paying Agent and the Conversion Agent;
(viii) if applicable, the applicable Conversion Rate and any adjustments to the
applicable Conversion Rate;
(ix) if applicable, that the Notes with respect to which a Fundamental Change Purchase
Notice has been delivered by a Holder may be converted only if the Holder withdraws the
Fundamental Change Purchase Notice in accordance with the Indenture; and
(x) the procedures that Holders must follow to require the Company to purchase their
Notes.
No failure of the Company to give the foregoing notices and no defect therein shall limit the
repurchase rights of the Holders of Notes or affect the validity of the proceedings for the
repurchase of the Notes pursuant to this Section 3.01.
12
(c)
No Payment During Events of Default
. There shall be no repurchase of any Notes
pursuant to this Section 3.01 if there has occurred and is continuing an Event of Default with
respect to the Notes where the payment of the principal amount of the Notes has been accelerated,
and such acceleration has not been rescinded (other than an Event of Default that is cured by the
payment of the Fundamental Change Purchase Price of the Notes). The Paying Agent shall promptly
return to the respective Holders thereof any Definitive Notes held by it during the continuance of
such an Event of Default (other than an Event of Default that is cured by the payment of the
Fundamental Change Purchase Price with respect to the Notes) and shall deem canceled any
instructions for book-entry transfer of the Notes in compliance with the procedures of the
Depositary, in which case, upon such return and cancellation, the Fundamental Change Purchase
Notice with respect thereto shall be deemed to have been withdrawn.
Section 3.02.
Effect of Fundamental Change Purchase Notice
.
Upon receipt by the Paying Agent of the Fundamental Change Purchase Notice specified in
Section 3.01 hereof, the Holder of the Note in respect of which such Fundamental Change Purchase
Notice was given shall (unless such Fundamental Change Purchase Notice is withdrawn in accordance
with Section 3.03 hereof) thereafter be entitled to receive solely the Fundamental Change Purchase
Price in cash with respect to such Note. Such Fundamental Change Purchase Price shall be paid to
such Holder, subject to receipt of funds by the Paying Agent, on the later of (x) the Fundamental
Change Purchase Date with respect to such Note (provided the conditions in Section 3.01 hereof have
been satisfied) and (y) the time of delivery or book-entry transfer of such Note to the Paying
Agent by the Holder thereof in the manner required by Section 3.01 hereof.
Section 3.03.
Withdrawal of Fundamental Change Purchase Notice
.
A Fundamental Change Purchase Notice may be withdrawn (in whole or in part) by means of a
written notice of withdrawal delivered to the Paying Agent in accordance with the provisions of
Section 3.02, specifying:
(i) if Definitive Notes have been issued, the certificate numbers of the withdrawn Notes;
(ii) the principal amount of the Notes with respect to which such notice of withdrawal is
being submitted; and
(iii) the principal amount, if any, of such Notes that remains subject to the original
Fundamental Change Purchase Notice, which portion must be in principal amounts of an
integral multiple of $1,000;
provided
,
however
, that if such Notes are in global form, the notice must also comply with
appropriate procedures of the Depositary.
The Paying Agent shall promptly return to the respective Holders thereof any Definitive Notes
with respect to which a Fundamental Change Purchase Notice has been withdrawn in compliance with
the provisions of this Section 3.03.
13
Section 3.04.
Deposit of Fundamental Change Purchase Price
.
Prior to 11:00 a.m. (local time in The City of New York) on the Fundamental Change Purchase
Date, the Company shall deposit with the Paying Agent (or, if the Company or a Subsidiary or an
Affiliate of either of them is acting as the Paying Agent, shall segregate and hold in trust as
provided herein) an amount of money (in immediately available funds if deposited on such Business
Day) sufficient to pay the Fundamental Change Purchase Price of all the Notes or portions thereof
that are to be repurchased as of the Fundamental Change Purchase Date. If the Paying Agent holds
money or securities sufficient to pay the Fundamental Change Purchase Price of the Notes on the
Business Day following the Fundamental Change Purchase Date for which a Fundamental Change Purchase
Notice has been tendered and not withdrawn in accordance with this Supplemental Indenture on the
Fundamental Change Purchase Date, then as of such Fundamental Change Purchase Date, (a) such Notes
shall cease to be outstanding and interest (including any Additional Interest) shall cease to
accrue thereon (whether or not book-entry transfer of such Notes is made or such Notes have been
delivered to the Paying Agent) and (b) all other rights of the Holders in respect thereof shall
terminate (other than the right to receive the Fundamental Change Purchase Price and previously
accrued and unpaid interest (including any Additional Interest) upon delivery or book-entry
transfer of such Notes).
Section 3.05.
Notes Repurchased in Whole or in Part
.
Any Note that is to be repurchased, whether in whole or in part, shall be surrendered at the
office of the Paying Agent (with, if the Company or the Trustee so requires in the case of
Definitive Notes, 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 such Holder’s attorney duly
authorized in writing) and the Company shall execute and the Trustee shall authenticate and deliver
to the Holder of such Note, without service charge, a new Note or Notes, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to, and in exchange
for, the portion of the principal amount of the Note so surrendered that is not repurchased.
Section 3.06.
Covenant to Comply With Applicable Laws Upon Repurchase of Notes
.
In connection with any offer to repurchase Notes under Section 3.01 hereof, the Company shall,
in each case if required, (i) comply with the provisions of Rule 13e-4, Rule 14e-1 and any other
tender offer rules under the Exchange Act that may then be applicable, (ii) file a Schedule TO or
any successor or similar schedule, if required, under the Exchange Act and (iii) otherwise comply
with all federal and state securities laws so as to permit the rights and obligations under Section
3.01 to be exercised in the time and in the manner specified in Section 3.01.
Section 3.07.
Repayment to the Company
.
To the extent that the aggregate amount of cash deposited by the Company pursuant to Section
3.04 exceeds the aggregate Fundamental Change Purchase Price of the Notes or portions thereof that
the Company is obligated to repurchase as of the Fundamental Change Purchase
14
Date, then, following the Fundamental Change Purchase Date, the Paying Agent shall promptly
return any such excess to the Company.
ARTICLE IV
CONVERSION
Section 4.01.
Right to Convert
.
(a) Subject to and upon compliance with the provisions of this Supplemental Indenture, each
Holder shall have the right, at such Holder’s option, to convert the principal amount of any such
Notes, or any portion of such principal amount equal to an integral multiple of $1,000, at the
Conversion Rate in effect on the Conversion Date for such Notes, (x) prior to the close of
business on the Business Day immediately preceding March 15, 2018, only upon satisfaction of one
or more of the conditions described in clauses (i) through (iv) below, and (y) on or after March
15, 2018, at any time prior to the close of business on the second Trading Day immediately
preceding June 15, 2018 irrespective of the conditions described in clauses (i) through (iv)
below:
(i) Prior to the close of business on the Business Day immediately preceding March 15,
2018, a Holder may surrender all or a portion of its Notes for conversion in any fiscal
quarter (and only during such fiscal quarter) after the fiscal quarter ending September 30,
2011 if the Last Reported Sale Price of the Common Stock for at least 20 Trading Days in a
period of 30 consecutive Trading Days ending on the last Trading Day of the immediately
preceding fiscal quarter exceeds 130% of the Conversion Price on the last day of such
preceding fiscal quarter (such price, the “Conversion Trigger Price”). The Company, upon
notification by the Trustee or the Conversion Agent that one or more Holders exercised their
right to convert the Notes, or otherwise upon request by the Trustee, the Conversion Agent
or any Holder, shall determine at the beginning of each fiscal quarter after the fiscal
quarter ending September 30, 2011 whether the Notes are convertible as a result of the price
of the Common Stock and the Conversion Trigger Price, and if the Company determines that the
Notes are convertible in accordance with this Section 4.01(a)(i), the Company shall notify
the Trustee and the Conversion Agent.
(ii) Prior to the close of business on the Business Day immediately preceding March 15,
2018, a Holder may surrender Notes for conversion during the five Business Day period
immediately after any five consecutive Trading Day period (the “measurement period”) in
which the Trading Price per $1,000 principal amount of Notes, as determined following a
request by a Holder of Notes in accordance with the procedures set forth in this Section
4.01(a)(ii), for each Trading Day of such measurement period was less than 98% of the
product of the Last Reported Sale Price of the Common Stock and the Conversion Rate on each
such Trading Day (the “Trading Price Condition”), subject to compliance with the procedures
and conditions set forth in this Section 4.01(a)(ii) concerning the obligation to make a
trading price determination, in which event the Trading Price Condition shall be met. The
Company shall have no obligation to determine the Trading Price of the Notes in accordance
with this Section 4.01(a)(ii) unless a Holder of Notes provides the Company and the Trustee
with
15
reasonable evidence that the Trading Price per $1,000 principal amount of Notes would
be less than 98% of the product of the Last Reported Sale Price of the Common Stock and the
Conversion Rate. Promptly following receipt of such evidence, the Company shall determine
the Trading Price of the Notes beginning on the next Trading Day and on each successive
Trading Day until such Trading Day on which the Trading Price per $1,000 principal amount of
Notes is greater than or equal to 98% of the product of the Last Reported Sale Price of the
Common Stock and the Conversion Rate. If, upon presentation of such reasonable evidence by
the Holder, the Company does not so instruct the Trustee to obtain (or, if the Company does
not obtain) bids when required, the Trading Price per $1,000 principal amount of the Notes
shall be deemed to be less than 98% of the product of the Last Reported Sale Price of the
Common Stock and the Conversion Rate on each day the Company fails to do so. If the Trading
Price Condition has been met, the Company shall, as soon as practicable following the
condition being met, so notify the Holders, the Trustee and the Conversion Agent and shall
issue a press release and shall publish such press release through a public medium customary
for such press releases (and make such press release available on the Company’s website).
If, at any time after the Trading Price Condition has been met, the Trading Price per $1,000
principal amount of Notes is greater than or equal to 98% of the product of the Last
Reported Sale Price of the Common Stock and the Conversion Rate for such date, the Company
shall so notify the holders of the Notes, the Trustee and the Conversion Agent by the same
mechanism.
(iii) Prior to the close of business on the Business Day immediately preceding March
15, 2018, if the Company elects to:
(A) distribute to all or substantially all holders of Common Stock rights,
options, or warrants entitling them for a period expiring within 45 calendar days
after the record date for such distribution, to subscribe for or purchase shares of
Common Stock at a price per share less than the Last Reported Sale Price of a share
of Common Stock on the Trading Day immediately preceding the declaration date for
such distribution; or
(B) distribute to all or substantially all holders of Common Stock, assets,
debt securities or rights to purchase securities of the Company, which distribution
has a per share value, as determined by the Board of Directors, exceeding 10% of the
Last Reported Sale Price of the Common Stock on the Trading Day immediately
preceding the declaration date for such distribution,
then, in each case, the Company shall notify the Holders of the Notes at least 40 Business
Days prior to the Ex-Dividend Date for such distribution. Once the Company has given such
notice, Holders may surrender Notes for conversion at any time from, and including, the date
the Company mails such notice until the earlier of the close of business on the second
Trading Day immediately prior to such Ex-Dividend Date or the date of the Company’s
announcement that such distribution shall not take place, even if the Notes are not
otherwise convertible at such time. No Holder may exercise its right to convert its Notes
under the provisions of this Section 4.01(a)(iii) if such Holder otherwise may
16
participate in such distribution without conversion (based upon the Conversion Rate and upon
the same terms as holders of the Common Stock).
(iv) Prior to the close of business on the Business Day immediately preceding March 15,
2018, if a transaction or event that constitutes a Fundamental Change (but without regard to
the exclusion of transactions involving Publicly Traded Securities in the paragraph
following clause (4) of that definition) or a Make-Whole Fundamental Change occurs, Holders
may surrender Notes for conversion at any time from and after the date which is 35 Business
Days prior to the anticipated Effective Date of such transaction until the second Trading
Day immediately preceding the Fundamental Change Purchase Date corresponding to such
Fundamental Change (or, in the case of a Make-Whole Fundamental Change that does not
constitute a Fundamental Change, the 25th Trading Day immediately following the Effective
Date of such Make-Whole Fundamental Change). The Company shall notify Holders of the
anticipated Effective Date of the Fundamental Change or Make-Whole Fundamental Change, as
the case may be, as soon as practicable following the date the Company first determines the
anticipated Effective Date of such Fundamental Change or Make-Whole Fundamental Change, as
the case may be. The Company will use commercially reasonable efforts to make such
determination in time to give such notice no later than 40 Business Days in advance of such
anticipated Effective Date. Notwithstanding the foregoing, in no event will the Company be
required to provide such notice to Holders and the Trustee before the earlier of such time
as the Company publicly discloses or acknowledges the circumstances giving rise to such
Fundamental Change or Make-Whole Fundamental Change, as the case may be, or is required to
publicly disclose under applicable law or the rules of any stock exchange on which the
Company’s equity is then listed the circumstance giving rise to such anticipated Fundamental
Change or Make-Whole Fundamental Change, as the case may be. The Company shall update its
notice promptly if the anticipated Effective Date subsequently changes.
(b) From and after March 15, 2018, notwithstanding anything herein to the contrary, Notes may
be converted at any time until the close of business on the second Scheduled Trading Day
immediately preceding the Stated Maturity.
Section 4.02.
Conversion Procedures
.
(a) Each Note shall be convertible at the office of the Conversion Agent and, if applicable,
in accordance with the procedures of the Depositary.
(b) In order to exercise the conversion privilege with respect to any interest in a Global
Note, the Holder must complete the appropriate instruction form for conversion pursuant to the
Depositary’s book-entry conversion program, furnish appropriate endorsements and transfer
documents if required by the Company or the Conversion Agent, and pay the funds, if any, required
by Section 4.03(d) and all transfer or similar taxes if required pursuant to Section 4.08, and the
Conversion Agent must be informed of the conversion in accordance with the customary practice of
the Depositary. In order to exercise the conversion privilege with respect to any Definitive
Notes, the Holder of any such Notes to be converted, in whole or in part, shall:
17
(i) complete and manually sign the conversion notice provided on the back of the Note
(the “Conversion Notice”) or a facsimile of the Conversion Notice;
(ii) deliver the Conversion Notice, which is irrevocable, and the Note to the
Conversion Agent;
(iii) if required, furnish appropriate endorsements and transfer documents,
(iv) if required, pay all transfer or similar taxes as set forth in Section 4.08, and
(v) pay the funds, if any, required under Section 4.03(d).
The date on which the Holder satisfies all of the applicable requirements set forth in this
Section 4.02(b) is the “Conversion Date.” The Conversion Agent shall, as promptly as possible, and
in any event within two (2) Business Days of the receipt thereof, provide the Company with notice
of any conversion by a Holder of the Notes.
(c) Each Conversion Notice shall state the name or names (with address or addresses) in which
any certificate or certificates for shares of Common Stock which shall be issuable on such
conversion shall be issued. All such Notes surrendered for conversion shall, unless the shares
issuable on conversion are to be issued in the same name as the registration of such Notes, be
duly endorsed by, or be accompanied by instruments of transfer in form satisfactory to the Company
duly executed by, the Holder or his duly authorized attorney.
(d) In case any Notes of a denomination greater than $2,000 shall be surrendered for partial
conversion, the Company shall execute and the Trustee shall authenticate and deliver to the Holder
of the Notes so surrendered, without charge, new Notes in authorized denominations in an aggregate
principal amount equal to the unconverted portion of the surrendered Notes.
Each conversion shall be deemed to have been effected as to any such Notes (or portion
thereof) surrendered for conversion immediately prior to the close of business on the relevant
Conversion Date;
provided
,
however
, that the person in whose name the certificate or certificates
for the number of shares of Common Stock, if any, that shall be issuable upon such conversion in
respect of any Trading Day during an Cash Settlement Averaging Period, if applicable, shall become
the holder of record of such shares of Common Stock as of the close of business on the last Trading
Day of such Cash Settlement Averaging Period (or, if the Company elects to deliver the Settlement
Amount solely in shares of Common Stock, on the Conversion Date).
(e) Upon the conversion of an interest in Global Notes, the Trustee (or other Conversion
Agent appointed by the Company) shall make a notation on such Global Notes as to the reduction in
the principal amount represented thereby. The Company shall notify the Trustee in writing of any
conversions of Notes effected through any Conversion Agent other than the Trustee.
(f) Notwithstanding the foregoing, a Note in respect of which a Holder has delivered a
Fundamental Change Purchase Notice exercising such Holder’s option to require
18
the Company to repurchase such Note may be converted only if such notice of exercise is
withdrawn in accordance with Article 3 hereof and duly submitted such Note for conversion.
Section 4.03.
Settlement Upon Conversion
.
(a) Subject to this Section 4.03(a), upon any conversion of any Note, the Company shall
deliver to converting Holders, in respect of each $1,000 principal amount of Notes being
converted, solely cash, solely shares of Common Stock or a combination of cash and Common Stock
(the “Settlement Amount”), at the Company’s election, as set forth in this Section 4.03(a).
(i) All conversions on or after March 15, 2018 will be settled using the same
settlement method.
(ii) Prior to March 15, 2018, the Company will elect (or be deemed to have elected) the
same settlement method for all conversions occurring on any given Conversion Date. Except
for any conversions that occur on or after March 15, 2018, the Company need not elect the
same settlement method with respect to conversions that occur on different Trading Days.
(iii) If, in respect of any Conversion Date (or the period beginning on, and including,
March 15, 2018, and ending on, and including, the second Scheduled Trading Day immediately
preceding the Stated Maturity, as the case may be), the Company elects to deliver a notice
(the “Settlement Notice”) of the relevant settlement method in respect of such Conversion
Date (or such period, as the case may be), the Company, through the Trustee, shall deliver
such Settlement Notice to converting Holders no later than the second Business Day
immediately following the relevant Conversion Date. Such Settlement Notice shall specify
whether the Company shall satisfy its conversion obligation by (A) delivering solely shares
of Common Stock, (B) paying solely cash or (C) paying and delivering, as the case may be, a
combination of cash and shares of Common Stock. In the case of an election to pay and
deliver, as the case may be, a combination of cash and shares of Common Stock, the relevant
Settlement Notice shall indicate the Specified Dollar Amount. If the Company does not
deliver a Settlement Notice, the Company will be deemed to have elected to deliver solely
shares of Common Stock in respect of its conversion obligation.
(iv) The Settlement Amount in respect of any conversion of Notes shall be computed as
follows:
(A) if the Company elects to satisfy its conversion obligation in respect of
such conversion by delivering solely Common Stock, the Company will deliver to the
converting Holder a number of shares of Common Stock equal to (1)(i) the aggregate
principal amount of Notes to be converted,
divided by
(ii) $1,000,
multiplied by
(2)
the then-applicable Conversion Rate on the Conversion Date;
(B) if the Company elects to satisfy its conversion obligation in respect of
such conversion by paying solely cash, the Company shall pay to the converting
Holder cash in an amount per $1,000 principal amount of Notes being
19
converted equal to the sum of the Daily Conversion Values for each of the
thirty consecutive Trading Days during the related Cash Settlement Averaging Period;
and
(C) if the Company elects to satisfy its conversion obligation in respect of
such conversion by paying and delivering, as the case may be, a combination of cash
and shares of Common Stock, if any, the Company shall pay and deliver to the
converting Holder, as the case may be, in respect of each $1,000 principal amount of
Notes being converted, a Settlement Amount equal to the sum of the Daily Settlement
Amounts for each of the thirty consecutive Trading Days during the related Cash
Settlement Averaging Period.
(b) The “Daily Settlement Amount,” for each of the 30 consecutive Trading Days during the
Cash Settlement Averaging Period, shall consist of:
(i) cash equal to the lesser of (i) the Daily Measurement Value for such Trading Day
and (ii) the Daily Conversion Value for such Trading Day, and
(ii) to the extent the Daily Conversion Value for such Trading Day exceeds the Daily
Measurement Value for such Trading Day, a number of shares of Common Stock equal to (x) the
difference between the Daily Conversion Value and the Daily Measurement Value,
divided
by
(y) the Daily VWAP of the Common Stock for such Trading Day.
(c) Subject to Section 4.03(d), upon conversion, Holders shall not receive any separate cash
payment for accrued and unpaid interest or Additional Interest, if any, unless such conversion
occurs between a Regular Record Date and the Interest Payment Date to which it relates, in which
case such interest shall be paid on such Interest Payment Date to the Holders of record on such
Regular Record Date.
(d) Upon the conversion of any Notes, the Holder shall not be entitled to receive any
additional cash payment for accrued and unpaid interest or Additional Interest, if any, except to
the extent specified below. The Company’s delivery to the Holder of cash and, if applicable,
Common Stock, together with any cash payment for any fractional share of Common Stock, into which
a Note is convertible shall be deemed to satisfy in full the Company’s obligation to pay the
principal amount of the Notes so converted and accrued and unpaid interest and Additional
Interest, if any, to, but not including, the Conversion Date. As a result, accrued and unpaid
interest and Additional Interest, if any, to, but not including, the Conversion Date shall be
deemed to be paid in full rather than cancelled, extinguished or forfeited. Notwithstanding the
foregoing, if Notes are converted between close of business on a Regular Record Date for the
payment of interest and the open of business on the next Interest Payment Date, Holders of such
Notes at the close of business on such Regular Record Date shall receive the interest and
Additional Interest, if any, payable on such Notes on the corresponding Interest Payment Date
notwithstanding the conversion. Notes surrendered for conversion during the period from the close
of business on any Regular Record Date to the open of business on the immediately following
Interest Payment Date must be accompanied by funds equal to the amount of interest and Additional
Interest, if any, payable on the next
20
Interest Payment Date on the Notes so converted;
provided
that no such payment need be made
(i) for conversions following the Regular Record Date immediately preceding June 15, 2018, (ii) if
the Company has specified a Fundamental Change Purchase Date that is after a Regular Record Date
and on or prior to the corresponding Interest Payment Date, or (iii) to the extent of any overdue
interest, if any overdue interest exists at the time of conversion with respect to such Note.
(e) The Company shall not issue fractional shares of Common Stock upon conversion of Notes.
If multiple Notes shall be surrendered for conversion at one time by the same Holder, the number
of full shares which shall be issuable upon conversion shall be computed on the basis of the
aggregate principal amount of the Notes (or specified portions thereof to the extent permitted
hereby) so surrendered. If any fractional share of stock would be issuable upon the conversion of
any Notes, the Company shall make payment therefor in cash in lieu of fractional shares of Common
Stock based on the Daily VWAP of its Common Stock on the relevant Conversion Date (if the Company
elects to satisfy its conversion obligation solely in shares of Common Stock) and based on the
Daily VWAP of the Common Stock on the last Trading Day of the relevant Cash Settlement Averaging
Period (in the case of any other settlement method).
(f) The Company shall, subject to the exceptions set forth in this Section 4.03(f), deliver
the Settlement Amount in respect of any Notes that a Holder converts by the third Trading Day
immediately following the last Trading Day of the Cash Settlement Averaging Period. However, (i)
if the Company elects to satisfy its conversion obligation solely in shares of Common Stock or
(ii) if prior to the Conversion Date for any converted Notes, the Common Stock has been replaced
by Reference Property consisting solely of cash (pursuant to the provisions set forth in Section
4.04), the Company shall deliver the Settlement Amount due in respect of conversion on the tenth
Business Day immediately following the relevant Conversion Date. Notwithstanding the foregoing,
if any information required in order to calculate the Settlement Amount deliverable shall not be
available as of the applicable settlement date, the Company shall deliver the additional shares of
Common Stock resulting from that adjustment on the third Trading Day after the earliest Trading
Day on which such calculation can be made.
(g) The last full paragraph of Section 4.7 of the Original Indenture shall be deemed to apply
to the Conversion Agent with references to “money” being deemed references to “money, securities
or a combination thereof.”
Section 4.04.
Adjustment of Conversion Rate
.
The Conversion Rate shall be adjusted from time to time by the Company if any of the events
set forth in this Section 4.04 occurs, without duplication, except that the Company shall not make
any adjustment to the Conversion Rate if Holders of Notes participate, as a result of holding the
Notes, in any of the transactions described under Section 4.04(a), Section 4.04(b), Section
4.04(c), Section 4.04(d) and Section 4.04(e), at the same time as holders of the Common Stock
participate, without having to convert their Notes, as if such Holders held a number of shares of
Common Stock equal to the Conversion Rate in effect for such Notes immediately
21
prior to the Ex-Dividend Date for such event multiplied by the principal amount (expressed in
thousands) of Notes held by such Holder.
Except as set forth in this Section 4.04 and in Sections 4.06 and 4.11, the Company shall not
adjust the Conversion Rate.
(a) If the Company, at any time or from time to time while any of the Notes are outstanding,
issues solely shares of its Common Stock as a dividend or distribution on all or substantially all
of its shares of Common Stock, or if the Company effects a share split or share combination on its
Common Stock, then the Conversion Rate shall be adjusted based on the following formula:
where
CR
0
= The Conversion Rate in effect immediately prior to the open of business on
the Ex-Dividend Date of such dividend or distribution, or immediately prior to the open of business
on the Business Day immediately following the effective date of such share split or share
combination, as the case may be;
CR = The Conversion Rate in effect immediately after the open of business on the Ex-Dividend
Date for such dividend or distribution, or immediately after the open of business on the Business
Day immediately following the effective date of such share split or share combination, as the case
may be;
OS
0
= The number of shares of Common Stock outstanding immediately prior to such
dividend, distribution, share split or share combination, as the case may be; and
OS = The number of shares of Common Stock outstanding immediately after such dividend,
distribution, share split or share combination, as the case may be.
Any adjustment made pursuant to this Section 4.04(a) shall become effective immediately after
the open of business on the Ex-Dividend Date for such dividend or distribution or immediately after
the open of business on the effective date for such share split or share combination. If any
dividend or distribution of the type described in this Section 4.04(a) is declared but not so paid
or made, the Conversion Rate shall be immediately readjusted, effective as of the date the Board of
Directors determines not to pay such dividend or distribution, to the Conversion Rate that would
then be in effect if such dividend or distribution had not been declared. As used in this Section
4.04(a), “effective date” means, in respect of any transaction, the first date on which the shares
of the Common Stock trade on the applicable exchange or in the applicable market (used to determine
the Last Reported Sale Price), regular way, reflecting the transaction.
(b) If the Company, at any time or from time to time while any of the Notes are outstanding,
issues to all or substantially all holders of the Common Stock any rights, options
22
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or warrants entitling them for a period of not more than 45 calendar days from the record
date for such distribution to subscribe for or purchase shares of the Common Stock at a price per
share less than the average of the Last Reported Sale Prices of Common Stock for the 10
consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the
declaration date for such distribution, the Conversion Rate shall be increased based on the
following formula (provided that the Conversion Rate shall be readjusted to the extent that such
rights, options or warrants are not exercised prior to their expiration or are not distributed):
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|
|
|
|
CR = CR
0
x
|
|
OS
0
+ X
|
|
|
|
|
|
|
|
OS
0
+ Y
|
|
where
CR
0
= The Conversion Rate in effect immediately prior to the open of business on
the Ex-Dividend Date for such distribution;
CR = The Conversion Rate in effect immediately after the open of business on the Ex-Dividend
Date for such distribution;
OS
0
= The number of shares of Common Stock outstanding immediately prior to the
open of business on the Ex-Dividend Date for such distribution;
X = The total number of shares of Common Stock issuable pursuant to such rights, options or
warrants; and
Y = The number of shares of Common Stock equal to the aggregate price payable to exercise such
rights, options or warrants
divided
by the average of the Last Reported Sale Prices of the Common
Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day
immediately preceding the date of announcement of such distribution.
Any increase made under this Section 4.04(b) shall be made successively whenever any such
rights, options, or warrants are issued and shall become effective immediately after the open of
business on the Ex-Dividend Date for such issuance. To the extent such rights, options or warrants
are not exercised prior to their expiration or termination, the Conversion Rate shall be decreased
to the Conversion Rate that would then be in effect had the increase with respect to the issuance
of such rights, options or warrants been made on the basis of the delivery of only the number of
shares of Common Stock actually delivered. To the extent such rights, options or warrants are not
so issued, the Conversion Rate shall be decreased to be the Conversion Rate that would then be in
effect if such Ex-Dividend Date for such issuance had not occurred. For the purposes of this
Section 4.04(b), in determining whether any rights or warrants entitle the holders to subscribe for
or purchase shares of Common Stock at less than the average of the Last Reported Sale Prices of
Common Stock for the 10 consecutive Trading Day period ending on the Trading Day immediately
preceding the date of announcement of such distribution, there shall be taken into account any
consideration received by the Company for such rights, options or
23
warrants and any amount payable on the exercise thereof, with the value of such consideration,
if other than cash, as shall be determined by the Board of Directors.
(c) If the Company, at any time or from time to time while the Notes are outstanding,
distributes shares of any class of Capital Stock of the Company, evidences of its indebtedness or
other assets or property to all or substantially all holders of the Common Stock of the Company,
excluding:
(i) dividends or distributions (including share splits) pursuant to Section 4.04(a) or
Section 4.04(b);
(ii) dividends or distributions paid exclusively in cash pursuant to Section 4.04(d);
and
(iii) Spin-Offs to which the provisions set forth in this Section 4.04(c) shall apply;
then the Conversion Rate shall be adjusted based on the following formula:
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|
|
CR = CR
0
x
|
|
SP
0
|
|
|
|
|
|
|
|
SP
0
— FMV
|
|
where
CR
0
= the Conversion Rate in effect immediately prior to the open of business on
the Ex-Dividend Date for such distribution;
CR = the Conversion Rate in effect immediately after the open of business on the Ex-Dividend
Date for such distribution;
SP
0
= the average of the Last Reported Sale Prices of the Common Stock over the 10
consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the
Ex-Dividend Date for such distribution; and
FMV = the fair market value (as determined by the Board of Directors) of the shares of capital
stock, evidences of indebtedness, assets or property distributed with respect to each outstanding
share of the Common Stock as of the open of business on the Ex-Dividend Date for such distribution.
Such adjustment shall become effective immediately after the open of business on the
Ex-Dividend Date for such distribution. If such distribution is not so paid or made, the Conversion
Rate shall be decreased to be the Conversion Rate that would then be in effect if such dividend or
distribution had not been declared.
If the fair market value (as determined by the Board of Directors) of the shares of capital
stock, evidences of indebtedness or other assets or property so distributed with respect to one
share of Common Stock as of the open of business on the Ex-Dividend Date for such distribution is
equal to or greater than the average of the Last Reported Sale Prices of the Common Stock
24
over the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the
Ex-Dividend Date for such distribution, in lieu of the foregoing adjustment, adequate provision
shall be made so that each Holder of a Note shall have the right to receive on conversion in
respect of each Note held by such Holder, in addition to the number of shares of Common Stock to
which such Holder is entitled to receive, the amount and kind of securities and assets such Holder
would have received had such Holder already owned a number of shares of Common Stock equal to the
Conversion Rate immediately prior to the record date for the distribution of the securities or
assets.
With respect to an adjustment pursuant to this Section 4.04(c) where there has been a payment
of a dividend or other distribution on the Common Stock of shares of capital stock of any class or
series, or similar equity interest, of or relating to a Subsidiary or other business unit (a
“Spin-Off”), the Conversion Rate shall be increased based on the following formula:
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|
|
CR = CR
0
x
|
|
FMV + MP
0
|
|
|
|
|
|
MP
0
|
where
CR
0
= the Conversion Rate in effect immediately prior to the open of business on
the Ex-Dividend Date for the Spin-Off;
CR = the Conversion Rate in effect immediately after the open of business on the Ex-Dividend
Date for the Spin-Off;
FMV = the average of the Last Reported Sale Prices of the capital stock or similar equity
interest distributed to holders of Common Stock applicable to one share of Common Stock (determined
for purposes of the definition of Last Reported Sale Price as if such capital stock or similar
equity interest were the Common Stock) over the first ten consecutive Trading Day period
immediately following, and including, the Ex-Dividend Date of the Spin-Off (such period, the
“Valuation Period”); and
MP
0
= the average of the Last Reported Sale Prices of Common Stock over the
Valuation Period.
The adjustment to the Conversion Rate under the preceding paragraph of this Section 4.04(c)
shall occur immediately after the open of business on the day after the last day of the Valuation
Period, but shall be given effect as of the open of business on the Ex-Dividend Date for the
Spin-Off. If the Ex-Dividend Date for the Spin-Off is less than 10 Trading Days prior to, and
including, the end of the Cash Settlement Averaging Period in respect of any conversion, references
within this Section 4.04(c) to 10 consecutive Trading Days shall be deemed replaced, for purposes
of calculating the affected daily Conversion Rates in respect of that conversion, with such lesser
number of Trading Days as shall elapse from, and including, the Ex-Dividend Date for the Spin-Off
to, and including, the last Trading Day of such Cash Settlement Averaging Period. For purposes of
determining the Conversion Rate, in respect of any conversion during the 10 consecutive Trading
Days commencing on the Ex-Dividend Date for any Spin-Off, references within the portion of this
Section 4.04(c) related to “Spin-Offs” to
25
10 consecutive Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed from, and
including, the Ex-Dividend Date for such Spin-Off to, but excluding, the relevant Conversion Date.
If any such Spin-Off dividend or distribution is declared but not so paid or made, the Conversion
Rate shall be decreased to be the Conversion Rate that would then be in effect if such dividend or
distribution had not been declared.
(d) (i) If the Company makes or pays any cash dividend or distribution made to all or
substantially all holders of Common Stock, the Conversion Rate shall be increased based on the
following formula:
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CR = CR
0
x
|
|
SP
0
|
|
|
|
|
|
SP
0
— C
|
where
CR
0
= The Conversion Rate in effect immediately prior to the open of business on
the Ex-Dividend Date for such distribution;
CR = The Conversion Rate in effect immediately after the open of business on the Ex-Dividend
Date for such distribution;
SP
0
= The average of the Last Reported Sale Prices of the Common Stock over the 10
consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the
Ex-Dividend Date for such distribution; and
C = The amount in cash per share the Company pays or distributes to holders of the Common
Stock.
In the case of an adjustment pursuant to this Section 4.04(d), such adjustment shall become
effective immediately after the open of business on the Ex-Dividend Date for the relevant dividend
or distribution. If any dividend or distribution described in this Section 4.04(d) is declared but
not so paid or made, the new Conversion Rate shall be readjusted to the Conversion Rate that would
then be in effect if such distribution had not been declared.
(e) If (i) the Company or any of its Subsidiaries makes a payment in respect of a tender
offer or exchange offer for Common Stock (subject to the tender offer rules under the Exchange Act
then applicable), and (ii) the cash and value of any other consideration included in the payment
per share of Common Stock exceeds the average of the Last Reported Sale Prices per share of Common
Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day
next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or
exchange offer (the “Expiration Date”), the Conversion Rate shall be increased based on the
following formula:
26
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|
|
|
CR = CR
0
|
X
|
AC + (SP x OS)
OS
0
x SP
|
|
|
where
CR
0
= the Conversion Rate in effect immediately prior to the open of business on
the Trading Day next succeeding the Expiration Date;
CR = the Conversion Rate in effect immediately after the open of business on the Trading Day
next succeeding the Expiration Date;
AC = the aggregate value of all cash and any other consideration (as determined by the Board
of Directors) paid or payable for shares purchased in such tender or exchange offer;
OS
0
= the number of shares of Common Stock outstanding immediately prior to the
time (the “Expiration Time”) such tender or exchange offer expires (prior to giving effect to such
tender offer or exchange offer);
OS = the number of shares of Common Stock outstanding immediately after the Expiration Time
(after giving effect to such tender or exchange offer); and
SP = the average of the Last Reported Sale Prices of Common Stock over the 10 consecutive
Trading Day period commencing on, and including, the Trading Day next succeeding the Expiration
Date.
The adjustment to the Conversion Rate under this Section 4.04(e) shall be given effect at the
open of business on the Trading Day next succeeding the Expiration Date. If the Trading Day next
succeeding the Expiration Date is less than 10 consecutive Trading Days prior to, and including,
the end of the Cash Settlement Averaging Period in respect of any conversion, references in this
Section 4.04(e) to 10 consecutive Trading Days shall be deemed replaced, for purposes of
calculating the affected daily Conversion Rates in respect of that conversion, with such lesser
number of Trading Days as shall elapse from, and including, the Trading Day next succeeding the
Expiration Date to, and including, the last Trading Day of such Cash Settlement Averaging Period.
For purposes of determining the Conversion Rate, in respect of any conversion during the 10
consecutive Trading Days commencing on the Trading Day next succeeding the Expiration Date,
references in this Section 4.04(e) to 10 consecutive Trading Days shall be deemed replaced with
such lesser number of Trading Days as have elapsed from, and including, the Trading Day next
succeeding the Expiration Date to, but excluding, the relevant Conversion Date.
(f) The Company is permitted (but not required) to increase the Conversion Rate by any amount
for a period of time of at least 20 Business Days if the Board of Directors determines that such
increase would be in the best interests of the Company. The Company shall not take any action that
would result in adjustment of the Conversion Rate, in such a manner as to result in the reduction
of the Conversion Price to less than the par value per share of the Common Stock.
27
(g) The Company may (but shall not be required to) increase the Conversion Rate, in addition
to any adjustments pursuant to Section 4.04(a), 4.04(b), 4.04(c), 4.04(d), 4.04(e) or 4.04(f), to
avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock in
connection with a dividend or distribution of shares (or rights to acquire shares) or similar
event.
(h) Adjustments to the Conversion Rate shall be calculated to the nearest one ten-thousandth
of a share. No adjustment to the Conversion Rate shall be required to be made for the Company’s
issuance of Common Stock or any securities convertible into or exchangeable for shares of Common
Stock or the right, option or warrant to purchase shares of Common Stock or such convertible or
exchangeable securities, other than as provided in this Section 4.04 and in Section 4.11 hereof.
(i) Whenever the Conversion Rate is adjusted as provided in this Section 4.04, the Company
shall promptly file with the Trustee and any Conversion Agent an Officers’ Certificate setting
forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts
requiring such adjustment. Unless and until a Trust Officer of the Trustee shall have received
such Officers’ Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of
the Conversion Rate and may assume without inquiry that the last Conversion Rate of which it has
knowledge is still in effect. As soon as practicable following the adjustment, the Company shall
notify the Holders of the Notes of such adjustment of the Conversion Rate setting forth the
adjusted Conversion Rate and the date on which each adjustment becomes effective, and will issue a
press release containing the relevant information (and make such press release available on the
Company’s website). Failure to deliver such notice shall not affect the legality or validity of
any such adjustment.
(j)
For purposes of this Section 4.04, the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company so long as the Company
does not pay any dividend or make any distribution on shares of Common Stock held in the treasury
of the Company, but shall include shares issuable in respect of scrip certificates issued in lieu
of fractions of shares of Common Stock.
(k)
Notwithstanding anything to the contrary in this Article 4, no adjustment to the
Conversion Rate shall be made:
(i) upon the issuance of any shares of Common Stock pursuant to any present or future
plan providing for the reinvestment of dividends or interest payable on the Company’s
securities and the investment of additional optional amounts in shares of Common Stock under
any plan;
(ii) upon the issuance of any shares of Common Stock or options or rights to purchase
those shares pursuant to any present or future employee, director or consultant benefit plan
or program of or assumed by the Company or any of its Subsidiaries;
(iii) upon the issuance of any shares of Common Stock pursuant to any option, warrant,
right or exercisable, exchangeable or convertible security not described in clause (ii)
above and outstanding as of the date the Initial Notes were first issued;
28
(iv) for a change in the par value of the Common Stock; or
(v) for accrued and unpaid interest and Additional Interest, if any, on the Notes.
(l) The Company shall not be required to make an adjustment in the Conversion Rate unless the
adjustment would require a change of at least 1% in the Conversion Rate. However, the Company
shall carry forward and take into account in any future adjustment any adjustments that are less
than 1% of the Conversion Rate and make such carried forward adjustment, regardless of whether the
aggregate adjustment is less than 1%, (i) upon any Conversion Date of Notes and (ii) on each
Trading Day of any Cash Settlement Averaging Period, if applicable.
(m) If:
(i) the Company elects to satisfy its conversion obligation through delivery of a
combination of cash and Common Stock, and shares of Common Stock are deliverable to settle
the Daily Settlement Amount for a given Trading Day within the Cash Settlement Averaging
Period applicable to Notes that a Holder has converted;
(ii) any distribution or transaction described in Section 4.04(a), Section 4.04(b),
Section 4.04(c), Section 4.04(d) or Section 4.04(e) has not yet resulted in an adjustment to
the Conversion Rate on the Trading Day in question; and
(iii) the shares the Holder shall receive in respect of such Trading Day are not
entitled to participate in the relevant distribution or transaction (because they were not
held by such Holder on a related record date or otherwise);
then the Company shall adjust the number of shares that it delivers to the Holder in respect of the
relevant Trading Day to reflect the relevant distribution or transaction.
(n) If:
(i) the Company elects to satisfy the conversion obligation solely in shares of Common
Stock;
(ii) any event that requires an adjustment to the Conversion Rate in Section 4.04(a),
Section 4.04(b), Section 4.04(c), Section 4.04(d) or Section 4.04(e) made prior to the
settlement date has not resulted in an adjustment to the Conversion Rate as of the
Conversion Date; and
(iii) the shares of Common Stock the converting Holder will receive on settlement are
not entitled to participate in the distribution or transaction giving rise to such
adjustment event because such shares were not held by such Holder on the record date for
such distribution or transaction or otherwise;
then the Company shall adjust the number of shares of Common Stock deliverable to reflect the
relevant distribution or transaction.
29
Notwithstanding anything in this Section 4.04, if (i) a Conversion Rate adjustment pursuant to
this Section 4.04 becomes effective on any Ex-Dividend Date as described above and (ii) a Holder
converting its Notes on or after such Ex-Dividend Date and on or prior to the close of business on
the related record date would be treated as the record holder of shares of Common Stock as of the
related Conversion Date as described in Section 4.02 based on an adjusted Conversion Rate for such
Ex-Dividend Date, then, notwithstanding the foregoing Conversion Rate adjustment provisions, the
Conversion Rate adjustment relating to such Ex-Dividend Date will not be made for any Holder
converting Notes on or after such Ex-Dividend Date and on or prior to the close of business on the
related record date. Instead, such Holder will be treated as if such Holder were the record owner
of the shares of Common Stock on an unadjusted basis and participate in the related dividend,
distribution or other event giving rise to such adjustment.
Section 4.05.
Exchange in Lieu of Conversion.
When a Holder surrenders its Notes for conversion, the Company may, at its election, direct
the Conversion Agent to surrender, on or prior to the second Business Day following the relevant
Conversion Date, such Notes to a financial institution designated by the Company (the “Designated
Institution”) for exchange in lieu of conversion. In order to accept any Notes surrendered for
conversion for exchange in lieu of conversion, the Designated Institution must agree to timely
deliver to the Conversion Agent for delivery to the Holder, in exchange for such Notes, the shares
of Common Stock, cash or any combination thereof that would otherwise be due upon conversion
pursuant to Section 4.02 and in respect of which the Company has notified converting Holders. If
the Company makes the election provided for in this Section 4.05, the Company shall, by the close
of business on the second Business Day following the relevant Conversion Date notify the Holder
surrendering its Notes for conversion that the Company has made such election. In addition, the
Company shall concurrently notify the Designated Institution of the method of settlement that the
Company has elected with respect to such conversion and the relevant deadline for delivery of the
consideration due upon conversion. Any Notes exchanged by the Designated Institution will remain
outstanding.
If the Designated Institution agrees to accept any Notes for exchange but does not timely
deliver the related consideration due upon conversion to the Conversion Agent, or if the Designated
Institution does not accept such Notes for exchange, the Company shall, as promptly as practical
thereafter, convert such Notes into cash, shares of Common Stock or any combination thereof, as
applicable in accordance with the provisions of Section 4.02
For the avoidance of doubt, in no event will the Company’s designation of a Designated
Institution pursuant to this Section 4.05 require the Designated Institution to accept any Notes
for exchange.
Section 4.06.
Adjustments Upon Certain Fundamental Changes
.
(a) If a Make-Whole Fundamental Change occurs and a Holder elects to convert its Notes in
connection with such Make-Whole Fundamental Change at any time from, and including the Effective
Date (as defined below) of such Make-Whole Fundamental Change to, and including the Business Day
immediately preceding the related Fundamental Change Purchase Date, or if a Make-Whole Fundamental
Change does not also constitute a
30
Fundamental Change, the 25
th
Trading Day immediately following the Effective Date
of such Make-Whole Fundamental Change, the Company shall increase the Conversion Rate for the
Notes so surrendered for conversion by a number of additional shares of Common Stock (the
“Additional Shares”) as set forth in this Section 4.06.
(b) The number of Additional Shares, if any, shall be determined by reference to the table
attached as Schedule A hereto, based on the date on which the Make-Whole Fundamental Change occurs
or becomes effective (the “Effective Date”) and the price (the “Stock Price”) paid or deemed paid
per share of the Common Stock in the Make-Whole Fundamental Change. If the holders of the Common
Stock receive only cash in a Make-Whole Fundamental Change described in clause (2) of the
definition of Fundamental Change, the Stock Price shall be the cash amount paid per share of the
Common Stock. Otherwise, the Stock Price shall be the average of the Last Reported Sale Prices of
the Common Stock on each of the five consecutive Trading Day periods ending on the Trading Day
immediately preceding the Effective Date.
The exact Stock Prices and Effective Dates may not be set forth in the table in Schedule A, in
which case, if the Stock Price is:
(i) between two Stock Prices in the table or the Effective Date is between two
Effective Dates in the table, the number of Additional Shares shall be determined by a
straight-line interpolation between the number of Additional Shares set forth for the higher
and lower Stock Prices and the earlier and later Effective Dates, as applicable, based on a
365-day year.
(ii) greater than $120.00 per share (subject to adjustment in the same manner as the
Stock Prices set forth in the column headings of the table in Schedule A pursuant to
subsection (c) below), no Additional Shares shall be added to the Conversion Rate.
(iii) less than $23.00 per share (subject to adjustments in the same manner as the
Stock Prices set forth in the column headings of the table in Schedule A pursuant to
subsection (c) below), no Additional Shares shall be added to the Conversion Rate.
Notwithstanding the foregoing, in no event shall the Conversion Rate, as increased by any
Additional Shares applicable, exceed 43.4782 shares of Common Stock per $1,000 principal amount of
Notes, subject to adjustments in the same manner and for the same events as the Conversion Rate as
set forth in Section 4.04.
(c) The Stock Prices set forth in the column headings of the table in Schedule A hereto shall
be adjusted as of any date on which the Conversion Rate of the Notes is otherwise adjusted. The
adjusted Stock Prices shall equal the Stock Prices applicable immediately prior to such
adjustment, multiplied by a fraction, the numerator of which is the Conversion Rate in effect
immediately prior to such adjustment giving rise to the Stock Price adjustment and the denominator
of which is the Conversion Rate as so adjusted. The number of Additional Shares set forth in such
table shall be adjusted in the same manner and for the same events as the Conversion Rate as set
forth in Section 4.04.
(d) The Company shall notify the Holders of Notes of the Effective Date of any Make-Whole
Fundamental Change by issuing a press release (and make the press release
31
available on the Company’s website) announcing such Effective Date as soon as practicable
after the Company first determines the anticipated Effective Date of such Make-Whole Fundamental
Change. The Company will use commercially reasonable efforts to make such determination in time to
deliver such notice no later than 40 Business Days in advance of such anticipated Effective Date,
and will update the notice promptly if the anticipated Effective Date subsequently changes.
Notwithstanding the foregoing, in no event will the Company be required to provide such notice to
the Holders and the Trustee before the earlier of such time as the Company publicly discloses or
acknowledges the circumstances giving rise to such Make-Whole Fundamental Change or is required to
publicly disclose under applicable law or the rules of any stock exchange on which the Company’s
equity is then listed the circumstances giving rise to such anticipated Make-Whole Fundamental
Change.
Section 4.07.
Effect of Recapitalization, Reclassification, Consolidation, Merger
or Sale
.
(a) If any of the following events occur:
(i) any reclassification of the Common Stock;
(ii) a consolidation, merger, combination or binding share exchange involving the
Company; or
(iii) a sale or conveyance to another Person of all or substantially all of the
Company’s property and assets;
(any event as set forth in clauses (i), (ii), or (iii) above a “Merger Event”) in each case, in
which holders of the Common Stock would be entitled to receive cash, securities or other property
for their shares of the Common Stock (“Reference Property”), the Holders shall be entitled
thereafter to convert their Notes into the kind and amount of shares of stock, other securities or
other property or assets (including cash or any combination thereof) that a holder of a number of
shares of the Common Stock equal to the Conversion Rate immediately prior to such transaction would
have owned or been entitled to receive upon such transaction;
provided
,
however
, that at and after
the effective time of the Merger Event the Settlement Amount shall be calculated and settled in
accordance with Section 4.03 (including the Company’s right to elect a settlement method as
described therein) such that (i) any amount payable in cash upon conversion of the Notes as set
forth under Section 4.03 shall continue to be payable as set forth in Section 4.03, (ii) the number
of shares of Common Stock deliverable upon conversion of the Notes under Section 4.03, if any,
shall be instead deliverable in the amount and type of Reference Property that a holder of that
number of shares of Common Stock would have been entitled to receive in such Merger Event and (iii)
the Daily VWAP shall be calculated based on the value of a unit of Reference Property that a holder
of one share of Common Stock would have been entitled to receive in such Merger Event.
If, as a result of the Merger Event, each share of Common Stock is converted into the right to
receive more than a single type of consideration (determined based in part upon any form of
stockholder election), then (x) the Reference Property into which the Notes shall be convertible
shall be deemed to be the weighted average of the types and amounts of
32
consideration received by the holders of Common Stock that affirmatively make such an
election, and (y) the unit of Reference Property for purposes of this Section 4.07 shall refer to
the consideration referred to in clause (x) attributable to one share of Common Stock. The Company
shall notify Holders of such weighted average as soon as practicable after such determination is
made.
(b)
The Company shall not become a party to any such Merger Event unless its terms are
consistent with this Section 4.07.
Section 4.08.
Taxes on Shares Issued
.
The Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue
or delivery of shares of Common Stock on conversion of Notes pursuant hereto;
provided
,
however
,
that if such documentary, stamp or similar issue or transfer tax is due because the Holder of such
Notes has requested that shares of Common Stock be issued in a name other than that of the Holder
of the Notes converted, then such taxes shall be paid by the Holder, and the Company shall not be
required to issue or deliver any stock certificate evidencing such shares unless and until the
Holder shall have paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid. Nothing herein shall preclude any tax
withholding required by law or regulations.
Section 4.09.
Reservation of Shares; Shares to be Fully Paid; Compliance With
Governmental Requirements; Listing of Common Stock
.
The Company shall reserve, out of its authorized but unissued shares or shares held in
treasury, sufficient shares of Common Stock to satisfy conversion of the Notes from time to time as
such Notes are presented for conversion (assuming that, at the time of the computation of such
number of shares or securities, all such Notes would be converted by a single Holder).
The Company covenants that all shares of Common Stock that may be issued upon conversion of
Notes shall be newly issued shares or treasury shares, shall be duly authorized, validly issued,
fully paid and non-assessable and shall be free from preemptive rights and free from any tax, lien
or charge (other than those created by the Holder).
Section 4.10.
Responsibility of Trustee
.
The Trustee and any Conversion Agent shall not at any time be under any duty or responsibility
to any Holder of Notes to determine or calculate the Conversion Rate, to determine whether any
facts exist which may require any adjustment of the Conversion Rate, or to confirm the accuracy of
any such adjustment when made or the appropriateness of the method employed, or herein or in any
supplemental indenture provided to be employed, in making the same. The Trustee and any other
Conversion Agent shall not be accountable with respect to the validity or value (or the kind or
amount) of any shares of Common Stock or of any other securities or property that may at any time
be issued or delivered upon the conversion of any Notes; and the Trustee and the Conversion Agent
make no representations with respect thereto. Neither the Trustee nor any Conversion Agent shall be
responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock
or stock certificates or other securities or property or cash upon the surrender of any Notes for
the purpose of conversion or to comply
33
with any of the duties, responsibilities or covenants of the Company contained in this Article
4. The rights, privileges, protections, immunities and benefits given to the Trustee, including
without limitation its right to be compensated, reimbursed, and indemnified, are extended to, and
shall be enforceable by, the Trustee in each of its capacities hereunder, including its capacity as
Conversion Agent.
Section 4.11.
Stockholder Rights Plan.
Each share of Common Stock issued upon conversion of Notes pursuant to this Article 4 shall be
entitled to receive the appropriate number of rights, if any, and the certificates representing the
Common Stock issued upon such conversion shall bear such legends, if any, in each case as may be
provided by the terms of any stockholder rights plan adopted by the Company, as the same may be
amended from time to time. Notwithstanding the foregoing, if prior to any conversion such rights
have separated from the shares of Common Stock in accordance with the provisions of the applicable
stockholder rights agreement, the Conversion Rate shall be adjusted at the time of separation as if
the Company had distributed to all holders of the Common Stock, shares of the Company’s capital
stock, evidences of indebtedness or other assets or property as set forth in Section 4.04(c),
subject to readjustment in the event of the expiration, termination or redemption of such rights.
ARTICLE V
REMEDIES
Section 5.01.
Events of Default
.
The Notes shall not be subject to Section 6.1 of the Original Indenture. In lieu thereof, the
Notes shall be subject to the following provisions of this Section 5.01.
An “Event of Default” on the Notes occurs if, voluntarily or involuntarily, whether by
operation of law or otherwise, any of the following shall occur:
(a) default in the payment in respect of the principal of any Note at its maturity upon
required repurchase, upon declaration of acceleration or otherwise;
(b) default in the payment of any interest (including Additional Interest, if any) upon any
Note when it becomes due and payable, and continuance of such default for a period of 30 days;
(c) default in the performance, or breach, of any covenant or agreement of the Company in
this Indenture (other than a covenant or agreement a default in whose performance or whose breach
is specifically dealt with in clauses (a), (b), (f) or (g) of this Section 5.01), and continuance
of such default or breach for a period of 60 days after written notice thereof has been given to
the Company by the Trustee or to the Company and the Trustee by the holders of at least 25% in
aggregate principal amount of the outstanding Notes;
(d) a default or defaults under any bonds, debentures, notes or other evidences of
indebtedness (other than the Notes and, for the avoidance of doubt, with full recourse to the
34
obligor) by the Company or any Subsidiary that is a Significant Subsidiary (or any group of
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary) having,
individually or in the aggregate, a principal or similar amount outstanding of at least $50.0
million, whether such indebtedness now exists or shall hereafter be created, which default or
defaults shall have resulted in the acceleration of the maturity of such indebtedness prior to its
express maturity or shall constitute a failure to pay at least $50.0 million of such indebtedness
when due and payable after the expiration of any applicable grace period with respect thereto;
(e) the entry against the Company or any Subsidiary that is a Significant Subsidiary (or any
group of Subsidiaries that, taken together, would constitute a Significant Subsidiary) of a final
judgment or final judgments for the payment of money in an aggregate amount in excess of $50.0
million, by a court or courts of competent jurisdiction, which judgments remain undischarged,
unwaived, unstayed, unbonded or unsatisfied for a period of 60 consecutive days;
(f) the failure by the Company to comply with the obligation to convert the Notes into Common
Stock, cash or a combination of cash and Common Stock, as applicable, in accordance with Article 4
hereof upon exercise of a Holder’s conversion right and such failure continues for 5 Business
Days;
(g) failure by the Company to provide a Fundamental Change Company Notice pursuant to Section
3.01(b) when due if such failure continues for 5 Business Days;
(h) the Company or any Subsidiary that is a Significant Subsidiary (or any group of
subsidiaries that, taken together, would constitute a Significant Subsidiary) pursuant to or
within the meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an involuntary case,
(iii) consents to the appointment of a Custodian of it or for all or substantially all
of its property, or
(iv) makes a general assignment for the benefit of its creditors;
(v) generally is unable to pay its debts as the same become due; or
(i)
a court of competent jurisdiction enters an order or decree under any Bankruptcy Law
that:
(i) is for relief against the Company or any Subsidiary that is a Significant
Subsidiary (or any group of subsidiaries that, taken together, would constitute a
Significant Subsidiary) in an involuntary case,
(ii) appoints a Custodian of the Company or any Significant Subsidiary (or any group of
subsidiaries that, taken together, would constitute a Significant Subsidiary) or a Custodian
for all or substantially all of the property of the Company, or
35
(iii) orders the liquidation of the Company or any Significant Subsidiary (or any group
of subsidiaries that, taken together, would constitute a Significant Subsidiary),
and the order or decree remains unstayed and in effect for 60 days.
The term “Custodian” means any receiver, trustee, assignee, liquidator, custodian or similar
official under any Bankruptcy Law.
The Company is required to deliver to the Trustee, with 30 days after the occurrence thereof,
written notice of any events which would constitute a Default, the status of such events and the
actions the Company is taking or proposes to take in respect therof.
Section 5.02.
Additional Interest
.
Notwithstanding anything in this Indenture or in the Notes to the contrary, if the Company so
elects, the sole remedy of Holders for an Event of Default relating to any obligation either to
file reports as required under Section 314(a) of the Trust Indenture Act, or Section 2.03 of this
Supplemental Indenture, shall, for the first 365 days after the occurrence of such an Event of
Default (which will be the 60th day after written notice is provided to the Company in accordance
with Section 5.01(c)), consist exclusively of the right to receive Additional Interest on the Notes
at an annual rate equal to (x) 0.25% of the outstanding principal amount of the Notes for the first
180 days an Event of Default is continuing in such 365-day period and (y) 0.50% of the outstanding
principal amount of the Notes for the remaining 185 days an Event of Default is continuing in such
365-day period. Additional Interest shall be payable in arrears on each Interest Payment Date
following the occurrence of such Event of Default in the same manner as regular interest on the
Notes. The Company may elect to pay Additional Interest as the sole remedy under this Section 5.02
by giving notice to the Holders, the Trustee and Paying Agent of such election on or before the
close of business on the 5th Business Day after the date on which such Event of Default otherwise
would occur. If the Company fails to timely give such notice or pay Additional Interest, the Notes
shall be immediately subject to acceleration as provided in Section 5.03. On the 366th day after
such Event of Default (if such violation is not cured or waived prior to such 366th day), the Notes
shall be subject to acceleration as provided in Section 5.03. This Section 5.02 shall not affect
the rights of the Holders in the event of the occurrence of any other Event of Default. In the
event the Company does not elect to pay Additional Interest upon an Event of Default in accordance
with this Section 5.02, the Notes shall be subject to acceleration as provided in Section 5.03.
Whenever in the Original Indenture there is mentioned, in any context, the payment of interest on,
or in respect of, any Note, such mention shall be deemed to include mention of the payment of
“Additional Interest” provided for in this Section 5.02 to the extent that, in such context,
Additional Interest is, was or would be payable in respect thereof pursuant to the provisions of
such sections, and express mention of the payment of Additional Interest (if applicable) in any
provision shall not be construed as excluding Additional Interest in those provisions where such
express mention is not made.
Section 5.03.
Acceleration
.
If an Event of Default occurs and is continuing, then, and in each and every such case, either
the Trustee or the Holders of not less than 25% in aggregate principal amount of all of the
36
Notes then outstanding (treated as one class) by notice in writing to the Company (and to the
Trustee if given by Holders), may declare the entire principal of all of the Notes then
outstanding, and the interest accrued thereon, including any Additional Interest, if any, to be due
and payable immediately, and upon such declaration, the same shall become immediately due and
payable. If an Event of Default described in clause Section 5.01(h) or (i) occurs and is
continuing, then the principal amount of all the Notes then outstanding, and the interest accrued
thereon, including any Additional Interest, if any, shall become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.
The Holders of a majority in aggregate principal amount of the Notes then outstanding, by
written notice to the Company and to the Trustee, may waive all past Defaults or Events of Default
with respect to the Notes (other than a Default or an Event of Default resulting from (i)
nonpayment of principal or interest, including any Additional Interest, (ii) failure to repurchase
any Notes when required upon a Fundamental Change or (iii) a failure to deliver, upon conversion,
cash, shares of Common Stock or a combination of cash and shares of Common Stock, as applicable,
due upon conversion) and rescind any such acceleration with respect to the Notes and its
consequences if (A) rescission would not conflict with any judgment or decree of a court of
competent jurisdiction and (B) all existing Events of Default, other than the nonpayment of the
principal of and interest, including any Additional Interest, on the Notes that have become due
solely by such declaration of acceleration have been cured or waived.
For the avoidance of doubt, this Section 5.03 supersedes the provisions of Section 6.2 and
Section 6.13 of the Original Indenture.
ARTICLE VI
SATISFACTION AND DISCHARGE
Section 6.01.
Satisfaction and Discharge of the Supplemental Indenture
.
(a) The satisfaction and discharge provisions set forth in this Section 6.01 shall, with
respect to the Notes, supersede in their entirety those in Section 8.1 of the Original Indenture,
and all references in the Original Indenture to Section 8.1 thereof and satisfaction and discharge
provisions therein, as the case may be, shall, with respect to the Notes, be deemed to be
references to this Section 6.01 and the satisfaction and discharge provisions set forth in this
Section 6.01, respectively. When (i) the Company shall deliver to the Registrar for cancellation
all Notes theretofore authenticated (other than any Notes that have been destroyed, lost or stolen
and in lieu of or in substitution for which other Notes shall have been authenticated and
delivered) and not theretofore canceled, or (ii) all the Notes not theretofore canceled or
delivered to the Trustee for cancellation shall have become due and payable (whether at Stated
Maturity for the payment of the principal amount thereof, on any Fundamental Change Purchase Date
or following the last day of the applicable Cash Settlement Averaging Period upon conversion or
otherwise) and the Company shall deposit with the Trustee, in trust, or deliver to the Holders, as
applicable, cash funds and shares of Common Stock, as applicable, sufficient to pay all amounts
due (and shares of Common Stock deliverable following conversion, if applicable) on all of such
Notes (other than any Notes that shall have been mutilated, destroyed, lost or stolen and in lieu
of or in substitution for which
37
other Notes shall have been authenticated and delivered) not theretofore canceled or
delivered to the Trustee for cancellation, including principal and interest due, accompanied by a
verification report as to the sufficiency of the deposited amount from an independent certified
accountant or other financial professional reasonably satisfactory to the Trustee, and if the
Company shall also pay or cause to be paid all other sums payable hereunder by the Company, then
this Supplemental Indenture shall cease to be of further effect (except as to (A) rights hereunder
of Holders of the Notes to receive all amounts owing upon the Notes and the other rights, duties
and obligations of Holders of the Notes, as beneficiaries hereof with respect to the amounts, if
any, so deposited with the Trustee and (B) the rights, obligations and immunities of the Trustee
hereunder), and the Trustee, on written demand of the Company accompanied by an Officers’
Certificate and an Opinion of Counsel as required by Section 7.2(b) of the Original Indenture and
at the cost and expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Supplemental Indenture; the Company, however, hereby agrees to
reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred by the
Trustee, including the fees and expenses of its counsel, and to compensate the Trustee for any
services thereafter reasonably and properly rendered by the Trustee in connection with this
Supplemental Indenture or the Notes.
ARTICLE VII
SUPPLEMENTAL INDENTURES
Section 7.01.
Amendments or Supplements Without Consent of Holders
.
(a) The provisions set forth in this Section 7.01 shall, with respect to the Notes, supersede
in their entirety those in Section 9.1 of the Original Indenture. The Company and the Trustee may
amend or supplement the Indenture or the Notes without notice to or the consent of any Holder of
the Notes:
(i) to cure any ambiguity, inconsistency or omission in this Indenture or the Notes in
a manner that does not adversely affect the rights of any Holder;
(ii) to cure any defect or error in the Indenture or the Notes or to conform the terms
of the Indenture or the Notes to the description thereof in the Prospectus;
(iii) to provide for the assumption by a successor Company of the obligations of the
Company under this Indenture as provided in Article 5 of the Original Indenture;
(iv) to add guarantees with respect to the Notes;
(v) to secure the Notes;
(vi) to add to the covenants of the Company such further covenants, restrictions or
conditions for the benefit of the Noteholders or surrender any right or power conferred upon
the Company;
(vii) to make any change that does not materially adversely affect the rights of any
holder of Notes;
38
(viii) to appoint a successor Trustee with respect to the Notes; or
(ix) to comply with any requirements of the Trust Indenture Act.
Section 7.02.
Amendments or Supplements With Consent of Holders
.
The provisions set forth in this Section 7.02 shall, with respect to the Notes, supersede in
their entirety those in Section 9.3 of the Original Indenture. Without the consent of each Holder
of an outstanding Note affected thereby, no amendment may:
(a) reduce the percentage in aggregate principal amount of Notes whose Holders must consent
to an amendment of the Indenture or to waive any past Event of Default;
(b) reduce the rate of or extend the stated time for payment of interest, including any
Additional Interest, on any Note;
(c) reduce the principal amount or extend the Stated Maturity of any Note;
(d) make any change that impairs or otherwise adversely affects the conversion rights of any
Notes;
(e) reduce any repurchase price or the Fundamental Change Purchase Price of any Note or amend
or modify in any manner adverse to the Holders of Notes the Company’s obligation to make such
payments whether through an amendment or waiver of provisions in the covenants, definitions or
otherwise;
(f) make any Note payable in a currency other than that stated in the Note;
(g) change the ranking of the Notes;
(h) impair the right of any Holder to receive payment of principal of and interest, including
any Additional Interest, on such Holder’s Notes on or after the due dates therefor or to institute
suit for the enforcement of any payment on or with respect to such Holder’s Notes; or
(i) make any change in the amendment or waiver provisions of the Indenture.
Section 7.03.
Notice of Amendment or Supplement
.
After any amendment or supplement to the Indenture or the Notes becomes effective, the Company
shall provide to Holders, pursuant to the procedures set forth in Section 11.2 of the Original
Indenture, a notice briefly describing such amendment or supplement and shall make such notice
available on the Company’s website, provided that any failure to give such notice to all the
Holders, or any defect in such notice, shall not impair or affect the validity of such amendment or
supplement.
39
ARTICLE VIII
INAPPLICABLE PROVISIONS OF THE ORIGINAL INDENTURE
Section 8.01.
Redemption
.
The provisions of Article 3 of the Original Indenture shall not apply to the Notes.
Section 8.02.
Legend
.
The provisions of Section 2.14.3 of the Original Indenture shall not apply to the Notes.
Instead, any Global Note shall bear the legend set forth in the Exhibit A hereto.
Section 8.03.
Legal Defeasance and Covenant Defeasance
.
The provisions of Section 8.3 and Section 8.4 of the Original Indenture shall not apply to the
Notes.
Section 8.04.
Subordination
.
The provisions of Section 8.6 and Article 10 of the Original Indenture shall not apply to the
Notes.
Section 8.05.
Securities in a Foreign Currency
.
The provisions of Section 11.15 and Article 10 of the Original Indenture shall not apply to
the Notes.
Section 8.06.
Sinking Funds
.
The provisions of Article 12 of the Original Indenture shall not apply to the Notes.
Section 8.07.
When Company May Merge
.
The provisions of Section 5.1 of the Original Indenture shall be hereby amended with respect
to the Notes by deleting the following words in the first paragraph thereof: “and may not permit
any Person to merge into, or convey, transfer or lease its properties and assets substantially as
an entirety to, the Company,”.
ARTICLE IX
MISCELLANEOUS
Section 9.01.
Governing Law
.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS SUPPLEMENTAL INDENTURE AND EACH OF THE
NOTES.
40
Section 9.02.
Payments on Business Days
.
If any Interest Payment Date or the Stated Maturity of the Notes or any Fundamental Change
Purchase Date would fall on a day that is not a Business Day, the required payment shall be made on
the next succeeding Business Day and no interest on such payment shall accrue in respect of the
delay.
Section 9.03.
No Security Interest Created
.
Nothing in this Supplemental Indenture or in the Notes, expressed or implied, shall be
construed to constitute a security interest under the Uniform Commercial Code or similar
legislation, as now or hereafter enacted and in effect, in any jurisdiction.
Section 9.04.
Trust Indenture Act
.
This Supplemental Indenture is hereby made subject to, and shall be governed by, the
provisions of the Trust Indenture Act required to be part of and to govern indentures qualified
under the Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another
provision hereof or the Original Indenture that is required to be included in an indenture
qualified under the Trust Indenture Act, such required provision shall control.
Section 9.05.
Benefits of Indenture
.
Nothing in this Supplemental Indenture or in the Notes, expressed or implied, shall give to
any Person, other than the parties hereto, any Paying Agent, any Conversion Agent, any
authenticating agent, any Registrar and their successors hereunder or the Holders of the Notes, any
benefit or any legal or equitable right, remedy or claim under this Supplemental Indenture.
Section 9.06.
Calculations
.
Except as otherwise expressly provided in this Supplemental Indenture, the Company shall be
responsible for making all calculations called for under this Supplemental Indenture and the Notes.
These calculations include, but are not limited to, determinations of any Last Reported Sale Price
of the Common Stock, accrued interest payable on the Notes and the Conversion Rate. The Company
shall make all these calculations in good faith and, absent manifest error, the Company’s
calculations shall be final and binding on Holders of Notes. The Company shall provide a schedule
of its calculations to each of the Trustee and the Conversion Agent (if different than the
Trustee), and each of the Trustee and Conversion Agent (if different than the Trustee) is entitled
to rely conclusively upon the accuracy of the Company’s calculations without independent
verification. The Trustee shall forward the Company’s calculations to any Holder of Notes upon the
request of that Holder at the sole cost and expense of the Company. Neither the Trustee nor the
Conversion Agent shall be responsible for making any calculations for determining amounts to be
paid or for monitoring any stock price.
Section 9.07.
Table of Contents, Headings, Etc
.
The table of contents and the titles and headings of the articles and sections of this
Supplemental Indenture have been inserted for convenience of reference only, are not to be
41
considered a part hereof, and shall in no way modify or restrict any of the terms or
provisions hereof.
Section 9.08.
Execution in Counterparts
.
This Supplemental Indenture may be executed in any number of counterparts, each of which shall
be an original, but such counterparts shall together constitute but one and the same instrument.
Section 9.09.
Severability
.
In the event any provision of this Supplemental Indenture or in the Notes shall be invalid,
illegal or unenforceable, then (to the extent permitted by law) the validity, legality or
enforceability of the remaining provisions shall not in any way be affected or impaired.
[Remainder of the page intentionally left blank]
42
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed as of the day and year first above written.
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BROOKDALE SENIOR LIVING INC.
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By:
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/s/ T. Andrew Smith
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Name:
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T. Andrew Smith
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Title:
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Executive Vice President,
General Counsel and Secretary
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AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, as
Trustee
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By:
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/s/ David H. Brill
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Name:
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David H. Brill
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Title:
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General Counsel and Secretary
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SCHEDULE A
The following table sets forth the numbers of Additional Shares to be received per $1,000
principal amount of Notes pursuant to Section 4.06 of this Supplemental Indenture based on
hypothetical Stock Prices and Effective Dates, subject to adjustment as provided herein.
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Stock Price
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Effective Date
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$23.00
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$25.00
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$27.50
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$29.33
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$32.50
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$35.00
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$40.00
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$45.00
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$50.00
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$60.00
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$75.00
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$90.00
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$105.00
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$120.00
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June 14, 2011
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9.3776
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8.2049
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6.8930
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6.1417
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5.1347
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4.5292
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3.6421
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3.0294
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2.5819
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1.9870
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1.4445
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1.0984
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0.8567
|
|
|
|
0.6787
|
|
|
June 15, 2012
|
|
|
9.3776
|
|
|
|
8.1254
|
|
|
|
6.7169
|
|
|
|
5.9197
|
|
|
|
4.8693
|
|
|
|
4.2490
|
|
|
|
3.3628
|
|
|
|
2.7688
|
|
|
|
2.3451
|
|
|
|
1.7914
|
|
|
|
1.3020
|
|
|
|
0.9926
|
|
|
|
0.7769
|
|
|
|
0.6174
|
|
|
June 15, 2013
|
|
|
9.3776
|
|
|
|
8.0444
|
|
|
|
6.5131
|
|
|
|
5.6587
|
|
|
|
4.5515
|
|
|
|
3.9133
|
|
|
|
3.0281
|
|
|
|
2.4573
|
|
|
|
2.0632
|
|
|
|
1.5651
|
|
|
|
1.1385
|
|
|
|
0.8703
|
|
|
|
0.6838
|
|
|
|
0.5455
|
|
|
June 15, 2014
|
|
|
9.3776
|
|
|
|
7.9071
|
|
|
|
6.2296
|
|
|
|
5.3093
|
|
|
|
4.1420
|
|
|
|
3.4888
|
|
|
|
2.6167
|
|
|
|
2.0828
|
|
|
|
1.7299
|
|
|
|
1.3059
|
|
|
|
0.9513
|
|
|
|
0.7304
|
|
|
|
0.5760
|
|
|
|
0.4612
|
|
|
June 15, 2015
|
|
|
9.3776
|
|
|
|
7.6443
|
|
|
|
5.8012
|
|
|
|
4.8098
|
|
|
|
3.5886
|
|
|
|
2.9318
|
|
|
|
2.1022
|
|
|
|
1.6318
|
|
|
|
1.3390
|
|
|
|
1.0123
|
|
|
|
0.7415
|
|
|
|
0.5722
|
|
|
|
0.4530
|
|
|
|
0.3638
|
|
|
June 15, 2016
|
|
|
9.3776
|
|
|
|
7.1808
|
|
|
|
5.1398
|
|
|
|
4.0742
|
|
|
|
2.8198
|
|
|
|
2.1889
|
|
|
|
1.4633
|
|
|
|
1.1016
|
|
|
|
0.9034
|
|
|
|
0.6906
|
|
|
|
0.5118
|
|
|
|
0.3971
|
|
|
|
0.3154
|
|
|
|
0.2541
|
|
|
June 15, 2017
|
|
|
9.3776
|
|
|
|
6.3459
|
|
|
|
4.0355
|
|
|
|
2.8963
|
|
|
|
1.6850
|
|
|
|
1.1673
|
|
|
|
0.6947
|
|
|
|
0.5258
|
|
|
|
0.4469
|
|
|
|
0.3532
|
|
|
|
0.2649
|
|
|
|
0.2062
|
|
|
|
0.1642
|
|
|
|
0.1326
|
|
|
June 15, 2018
|
|
|
9.3776
|
|
|
|
5.8994
|
|
|
|
2.2630
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
Sc. A - 1
EXHIBIT A
[FORM OF FACE OF NOTE]
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS NOTE IS EXCHANGEABLE FOR
NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A
TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE
OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT
IN LIMITED CIRCUMSTANCES.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY NOTE 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 HEREON 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.
Ex. A - 1
BROOKDALE SENIOR LIVING INC.
2.75% Convertible Senior Note due 2018
CUSIP No. 112463 AA2
Brookdale Senior Living Inc., a Delaware corporation (herein called the “Company”, which term
includes any successor Person under the Indenture hereinafter referred to), for value received,
hereby promises to pay CEDE & CO., or registered assigns, [ ] ($[ ])
(or such lesser principal amount as shall be specified in the “Schedule of Exchanges of
Securities”) on June 15, 2018 unless earlier converted or repurchased, and to pay interest thereon
as set forth in the manner, at the rates and to the Persons set forth in the Indenture.
Interest Payment Dates: June 15 and December 15, commencing December 15, 2011.
Regular Record Dates: June 1 and December 1.
Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at
this place.
[Remainder of page intentionally left blank]
Ex. A - 2
IN WITNESS WHEREOF, BROOKDALE SENIOR LIVING INC. has caused this instrument to be signed
manually or by facsimile by its duly authorized officers.
Dated:
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BROOKDALE SENIOR LIVING INC.
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By:
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Name:
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Title:
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CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred to in the
within-mentioned Indenture.
Dated:
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AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, as
Trustee
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By:
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Name:
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Title:
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Ex. A - 3
[FORM OF REVERSE OF NOTE]
BROOKDALE SENIOR LIVING INC.
2.75% Convertible Senior Note due 2018
This Note is one of a duly authorized issue of Securities of the Company (herein called the
“Notes”), issued under an Indenture dated as of June 14, 2011, as amended and supplemented from
time to time in accordance with the terms thereof (herein called the “Original Indenture”) and as
further supplemented by the Supplemental Indenture dated as of June 14, 2011 (herein called the
“Supplemental Indenture” and the Original Indenture, as supplemented by the Supplemental Indenture,
the “Indenture”) by and between the Company and American Stock Transfer & Trust Company, LLC,
herein called the “Trustee”, and reference is hereby made to the Indenture for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of the Company, the
Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. Additional Notes may be issued in an unlimited aggregate principal
amount, subject to conditions specified in the Indenture.
1. INTEREST
This Note shall bear interest at a rate of 2.75% per annum from June 14, 2011 or from the
most recent date to which interest had been paid or provided to, but excluding, the next scheduled
Interest Payment Date, until the principal hereof shall be repaid. Interest on this Note shall be
computed on the basis of a 360-day year composed of twelve 30-day months. Interest is payable
semi-annually in arrears on each June 15 and December 15, commencing on December 15, 2011, to the
Person in whose name this Note (or one or more predecessor securities) is registered at the close
of business on the Regular Record Date for such interest. Additional Interest shall be payable at
the option of the Company on the terms set forth in Section 5.02 of the within-mentioned
Supplemental Indenture.
The Company shall pay interest on overdue principal, and, to the extent lawful, on overdue
interest, in each case at a rate of 2.75% per annum. Interest not paid when due and any interest on
principal or interest not paid when due will be paid to Holders on a special record date, which
will be the 15th day preceding the date fixed by the Company for the payment of such interest,
whether or not such day is a Business Day. At least 15 days before a special record date, the
Company will send to each Holder and to the Trustee a notice that sets forth the special record
date, the payment date and the amount of interest to be paid.
2. MATURITY DATE
The Notes shall mature on June 15, 2018.
3. METHOD OF PAYMENT
The Company shall pay the principal of and interest on any Global Note in immediately
available funds to the Depositary or its nominee, as the case may be, as the registered Holder of
such Global Note. The Company shall pay the principal of any Definitive Notes at the office or
agency designated by the Company for that purpose. The Company has initially designated the
Ex. A - 4
Trustee as its Paying Agent and Registrar in respect of the Notes and its agency in New York,
New York as a place where Notes may be presented for payment or for registration of transfer. The
Company may, however, change the Paying Agent or Registrar for the Notes without prior notice to
the Holders thereof, and the Company may act as Paying Agent or Registrar for the Notes. Interest
on any Definitive Notes shall be payable to Holders of Definitive Notes either by check mailed to
each Holder at its address in the Register or, upon application by a Holder to the Registrar not
later than the relevant Regular Record Date, by wire transfer in immediately available funds to
that Holder’s account within the United States, which application shall remain in effect until that
Holder notifies, in writing, the Registrar to the contrary.
As provided in and subject to the provisions of the Indenture, the Company shall make all
payments and deliveries in respect of the Fundamental Change Purchase Price and the principal
amount on the Stated Maturity thereof, as the case may be, to the holder who surrenders a Note to
the Paying Agent to collect such payments in respect of the Note. The Company shall pay cash
amounts in money of the United States that at the time of payment is legal tender for payment of
public and private debts.
4. PAYING AGENT, REGISTRAR, CONVERSION AGENT.
Initially, American Stock Transfer & Trust Company, LLC shall act as Paying Agent, Registrar
and Conversion Agent. The Company may change the Paying Agent, Registrar or Conversion Agent
without prior notice.
5. NO REDEMPTION
This Note is not subject to redemption at the option of the Company and, for the avoidance of
doubt, this Note is not subject to the provisions of Article 3 of the Original Indenture.
6. FUNDAMENTAL CHANGES AND REPURCHASES THEREUPON
Upon the occurrence of a Fundamental Change, the Holder has the right, at such Holder’s
option, to require the Company to repurchase all of such Holder’s Notes or any portion thereof (in
principal amounts of $1,000 or integral multiples thereof) on the Fundamental Change Purchase Date
at a price equal to the Fundamental Change Purchase Price.
7. CONVERSION
As provided in and subject to the provisions of the Indenture, the Holder hereof has the
right, at its option, during periods and upon the occurrence of conditions specified in the
Indenture, prior to the close of business on the second Scheduled Trading Day immediately preceding
June 15, 2018, to convert this Note or a portion thereof that is $1,000 or an integral multiple
thereof, into cash, shares of Common Stock or any combination thereof
at the Conversion Rate specified in the Indenture as adjusted from time to time as provided in the Indenture.
8. SATISFACTION AND DISCHARGE
Ex. A - 5
The provisions in Section 6.01 of the Supplemental Indenture supersede the entirety of Section
8.1 of the Original Indenture with respect to this Note.
9. DENOMINATIONS, TRANSFER, EXCHANGE
As provided in the Indenture and subject to limitations therein set forth, the transfer of
this Note is registrable in the Register, upon surrender of this Note for registration of transfer
at the office or agency of the Company in any place where the principal of and interest on this
Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor,
of authorized denominations and for the same aggregate principal amount, shall be issued to the
designated transferee or transferees.
The Notes are issuable only in registered form without coupons in denominations of $2,000 and
in integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to
limitations therein set forth, the Notes are exchangeable for a like aggregate principal amount of
Notes and of like tenor of a different authorized denomination, as requested by the Holder
surrendering the same. No conversion or repurchase shall be permitted if it would result in the
issuance of a Note with a minimum denomination of less than $2,000.
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.
10. DEFAULTS AND REMEDIES
As provided in and subject to the provisions of the Indenture, in case an Event of Default, as
defined in the Indenture, shall have occurred and be continuing, the principal of and interest on
all Notes may be declared due and payable, by either the Trustee or Holders of not less than 25% in
aggregate principal amount of Notes then outstanding, and upon said declaration shall become due
and payable, in the manner, with the effect and subject to the conditions provided in the
Indenture;
provided
that upon the occurrence of an Event of Default specified in Section 5.01(h) or
(i) of the Supplemental Indenture, the principal amount of, and interest on, all the Notes shall
automatically become due and payable.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Company, which is absolute and unconditional, to pay the
principal of and any premium and interest on this Note at the time, place and rate, and in the coin
and currency, herein prescribed.
11. AMENDMENT, SUPPLEMENT AND WAIVER
The Indenture permits, with 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
Notes to be effected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Notes at the time outstanding. The
Indenture also contains provisions permitting the Holders of specified percentages in
Ex. A - 6
principal amount of the Notes at the time outstanding, on behalf of the Holders of all Notes,
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 Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note
and of any Note 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 Note.
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12. PERSONS DEEMED OWNERS
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The Holder of a Note may be treated as the owner of it for all purposes.
13. DEFINITIONS
All defined terms used in this Note that are defined in the Indenture shall have the meanings
assigned to them in the Indenture.
14. AUTHENTICATION
Unless the certificate of authentication hereon has been executed by the Trustee or an
authenticating agent by manual signature, this Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
15. INDENTURE TO CONTROL; GOVERNING LAW
In the case of any conflict between this Note and the Indenture, the provisions of the
Indenture shall control. This Note, for all purposes, shall be governed by and construed in
accordance with the laws of the State of New York.
16. ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of this Note, shall be
construed as though they were written out in full according to applicable laws or regulations:
TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= as joint tenants
with right of Survivorship and not as tenants in common), UGMA (= Uniform Gifts to Minors Act),
CUST (= Custodian).
Additional abbreviations may also be used though not in the above list.
Ex. A - 7
EXHIBIT B
[FORM OF NOTICE OF CONVERSION]
To: Brookdale Senior Living Inc.
The undersigned owner of this Note hereby irrevocably exercises the option to convert this
Note, or a portion hereof (which is $1,000 or an integral multiple hereof) below designated, into
cash, shares of
Common Stock or any combination thereof, in accordance with the terms of the Indenture referred to
in this Note, and directs that cash payable and any shares of Common Stock issuable and deliverable
upon conversion, together with any payment for fractional shares of Common Stock, and any Notes
representing any unconverted principal amount hereof, be paid or issued and delivered, as the case
may be, to the registered Holder hereof unless a different name has been indicated below. Subject
to exceptions set forth in the Indenture, if this notice is being delivered on a date after the
close of business on a Regular Record Date and prior to the opening of business on the related
Interest Payment Date, this notice is accompanied by payment of an amount equal to the interest
payable on such Interest Payment Date of the principal of this Note to be converted. If any shares
of Common Stock are to be issued in the name of a Person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect hereto. Any amount required to be paid
by the undersigned on account of interest accompanies this Note.
Principal amount to be converted (in an integral multiple of $1,000, if less than all):
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Date:
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Your Signature:
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(Sign exactly as your name appears on the
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other side of this Security)
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*
Signature guaranteed by:
By: ________________________________________
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*
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This signature must be guaranteed by an
institution which is a member of one of the following recognized signature
guaranty programs: (i) the Securities Transfer Agent Medallion Program
(STAMP); (ii) the New York Stock Exchange Medallion Program (MSP); (iii) the
Stock Exchange Medallion Program (SEMP); or (iv) such other guaranty program
acceptable to the Trustee.
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Ex. B - 1
Signature Guarantee
Fill in for registration of any shares of Common Stock and Notes if to be issued otherwise than to
the registered Holder.
Agent to transfer this Security on the books of the Company. The Agent may substitute another
to act for him or her.
(Name)
(Address)
Please print Name and Address
(including zip code number)
Social Security or other Taxpayer
Identifying Number
Ex. B - 2
EXHIBIT C
[FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE]
To: Brookdale Senior Living Inc.
The undersigned registered owner of this Note hereby acknowledges receipt of a notice from
Brookdale Senior Living Inc. (the “Company”) as to the occurrence of a Fundamental Change with
respect to the Company and specifying the Fundamental Change Purchase Date and requests and
instructs the Company to repay to the registered holder hereof in accordance with the applicable
provisions of this Note and the Indenture referred to in this Note (1) the entire principal amount
of this Note, or the portion thereof (that is $1,000 principal amount or an integral multiple
thereof) below designated, and (2) if such Fundamental Change Purchase Date does not fall during
the period after a Regular Record Date and on or prior to the corresponding Interest Payment Date,
accrued and unpaid interest thereon to, but excluding, such Fundamental Change Purchase Date.
In the case of certificated Notes, the certificate numbers of the Notes to be repurchased are
as set forth below:
Dated:
Signature(s)
Signature(s) must be guaranteed by a qualified guarantor institution with membership in an approved
signature guarantee program pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934.
Signature Guaranty
Social Security or Other Taxpayer Identification Number
Principal amount to be repurchased (in an integral multiple of $1,000, if less than all):
$__________, 000
NOTICE: The signature on the Fundamental Change Purchase Notice must correspond with the name as
written upon the face of the Note in every particular without alteration or enlargement or any
change whatever.
Ex. C - 1
EXHIBIT D
[FORM OF ASSIGNMENT AND TRANSFER]
For value received hereby sell(s), assign(s) and
transfer(s) unto (Please insert social security or Taxpayer Identification Number of assignee) the
within Note, and hereby irrevocably constitutes and appoints to transfer the said Note on the books
of the Company, with full power of substitution in the premises.
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Date:
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Your Signature:
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(Sign exactly as your name appears on the
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other side of this Security)
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*
Signature guaranteed by:
By: ________________________________________
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*
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This signature must be guaranteed by an
institution which is a member of one of the following recognized signature
guaranty programs: (i) the Securities Transfer Agent Medallion Program
(STAMP); (ii) the New York Stock Exchange Medallion Program (MSP); (iii) the
Stock Exchange Medallion Program (SEMP); or (iv) such other guaranty program
acceptable to the Trustee.
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Ex. D - 1