<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 5, 1998
REGISTRATION NO. 333-63743
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PAN PACIFIC RETAIL PROPERTIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS GOVERNING INSTRUMENTS)
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1631-B SOUTH MELROSE DRIVE
VISTA, CALIFORNIA 92083
(760) 727-1002
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
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<TABLE>
<S> <C> <C>
STUART A. TANZ
MARYLAND 1631-B SOUTH MELROSE DRIVE
(STATE OR OTHER JURISDICTION VISTA, CALIFORNIA 92083 33-0752457
OF INCORPORATION OR ORGANIZATION) (760) 727-1002 (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
(NAME AND ADDRESS OF AGENT FOR SERVICE)
</TABLE>
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Copies to:
WILLIAM J. CERNIUS
MARK W. SENECA
LATHAM & WATKINS
650 TOWN CENTER DRIVE, 20TH FLOOR
COSTA MESA, CALIFORNIA 92626
(714) 540-1235
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement as
determined by market conditions.
----------------
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [ X ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement of the same offering. [ ] ________________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ] _________________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED(1) REGISTERED(2) PER UNIT(2) PRICE(2) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Debt Securities (3)
Common Stock, $.01 par value per share (4)
Preferred Stock, $.01 par value per share (5)
Depositary Shares representing Preferred Stock (6)
Warrants (7)
Total ....................................... $400,000,000 (8) $400,000,000 $118,000(9)(10)
===================================================================================================================================
(Footnotes on following page)
</TABLE>
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
(Footnotes from previous page)
(1) This Registration Statement also covers contracts which may be issued by
the Registrant under which the counterparty may be required to purchase
Debt Securities, Common Stock, Preferred Stock or Depository Shares.
(2) In no event will the aggregate maximum offering price of all securities
registered under this Registration Statement exceed $400,000,000. Any
securities registered hereunder may be sold separately or as units with
other securities registered hereunder.
(3) Subject to footnote (2), there are being registered hereunder an
indeterminate number of Debt Securities as may be sold from time to time by
Pan Pacific Retail Properties, Inc. (the "Company").
(4) Subject to footnote (2), there are being registered hereunder shares of
Common Stock as may be sold, from time to time, by the Company. There is
also being registered hereunder an indeterminate number of shares of Common
Stock that may be issued upon conversion, as applicable, of Preferred Stock
or Depository Shares registered hereunder or upon exercise of Warrants
registered hereunder, as the case may be.
(5) Subject to footnote (2), there are being registered hereunder shares of
Preferred Stock, as may be sold, from time to time, by the Company or as
may be issued upon the exercise of Warrants registered hereunder.
(6) To be represented by Depository Receipts representing an interest in all or
a specified portion of a share of Preferred Stock.
(7) Subject to footnote (2), there are being registered hereunder Warrants
representing rights to purchase Preferred Stock or Common Stock (as shall
be designated by the Company at the time of any such offering) registered
hereunder.
(8) The proposed maximum offering price per unit (a) has been omitted pursuant
to Instruction II.D. of Form S-3, and (b) will be determined, from time to
time, by the Registrant in connection with the issuance by the Registrant
of the securities registered hereunder.
(9) Calculated pursuant to Rule 457(o) of the rules and regulations under the
Securities Act of 1933, as amended.
(10) Filing fee previously paid.
<PAGE> 3
PROSPECTUS
$400,000,000
PAN PACIFIC RETAIL PROPERTIES, INC.
Debt Securities, Common Stock, Preferred Stock,
Depositary Shares and Warrants
Pan Pacific Retail Properties, Inc., a Maryland corporation (the
"Company"), may from time to time offer in one or more series or classes (i) its
debt securities (the "Debt Securities"), (ii) shares of its Common Stock, $.01
par value per share (the "Common Stock"), (iii) shares of its Preferred Stock,
$.01 par value per share (the "Preferred Stock"), (iv) shares of Preferred Stock
represented by Depositary Shares (the "Depositary Shares"), and (v) warrants to
purchase Common Stock or Preferred Stock (the "Warrants") in amounts, at prices
and on terms to be determined at the time of offering, with an aggregate public
offering price of up to $400,000,000 (or its equivalent in another currency
based on the exchange rate at the time of sale). The Debt Securities, the Common
Stock, the Preferred Stock, the Depositary Shares and the Warrants
(collectively, the "Offered Securities") may be offered, separately or together,
in separate series, in amounts, at prices and on terms to be set forth in one or
more supplements to this Prospectus (each, a "Prospectus Supplement").
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered will be set forth in the applicable Prospectus
Supplement and will include, where applicable: (i) in the case of Debt
Securities, the specific title, aggregate principal amount, currency, form
(which may be registered or bearer, or certificated or global), authorized
denominations, maturity, rate (or manner and calculation thereof) and time of
payment of interest, terms for redemption at the Company's option or repayment
at the holder's option, terms for sinking fund payments, terms for conversion
into shares of Preferred Stock or Common Stock, covenants and any initial public
offering price; (ii) in the case of Common Stock, the specific title and stated
value and any initial public offering price, (iii) in the case of Preferred
Stock, the specific designation, preferences, conversion and other rights,
voting powers, restrictions, limitations as to transferability, dividends and
other distributions and terms and conditions of redemption and any initial
public offering price; (iv) in the case of the Depositary Shares, the fractional
share of Preferred Stock represented by each such Depositary Share; and (v) in
the case of Warrants, the duration, offering price, exercise price and
detachability. In addition, such specific terms may include limitations on
actual, beneficial or constructive ownership and restrictions on transfer of the
Offered Securities, in each case as may be appropriate to preserve the status of
the Company as a real estate investment trust ("REIT") for federal income tax
purposes. See "Restrictions on Ownership and Transfer of Capital Stock."
The applicable Prospectus Supplement will also contain information,
where applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Offered Securities
covered by such Prospectus Supplement.
The Offered Securities may be offered directly, through agents
designated from time to time by the Company, or to or through underwriters or
dealers. If any agents or underwriters are involved in the sale of any of the
Offered Securities, their names, and any applicable purchase price, fee,
commission or discount arrangement between or among them, will be set forth, or
will be calculable from the information set forth, in the applicable Prospectus
Supplement. See "Plan of Distribution." No Offered Securities may be sold
without delivery of the applicable Prospectus Supplement describing the method
and terms of the offering of such series of Offered Securities.
----------------
See "Risk Factors" beginning on page 6 for certain factors relevant to an
investment in the Offered Securities.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
---------------------------------------------------
The date of this Prospectus is October 5, 1998
<PAGE> 4
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith the Company files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information filed can be inspected and
copied at the Commission's Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following regional offices of the Commission:
Seven World Trade Center, 13th Floor, New York, New York 10048, and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such
material can be obtained from the Public Reference Section of the Commission,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
Commission also maintains a World Wide Web site that contains reports, proxy and
information statements and other information regarding registrants, such as the
Company, that file electronically with the Commission. The address of the
Commission's site is http://www.sec.gov. In addition, the Company's Common Stock
is listed on the New York Stock Exchange and similar information concerning the
Company can be inspected and copied at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a registration statement on
Form S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") (of which this Prospectus is a part) under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Offered Securities. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain portions of which have been omitted
as permitted by the rules and regulations of the Commission. Statements
contained in this Prospectus, in any Prospectus Supplement or in any document
incorporated by reference herein or therein, as to the contents of any contract
or other document are not necessarily complete, and in each instance reference
is made to the copy of such contract or other document filed as an exhibit to,
or incorporated by reference in, the Registration Statement, each such statement
being qualified in all respects by such reference and the exhibits and schedules
thereto. For further information regarding the Company and the Offered
Securities, reference is hereby made to the Registration Statement and such
exhibits and schedules which may be obtained from the Commission at its
principal office in Washington, D.C., upon payment of the fees prescribed by the
Commission.
2
<PAGE> 5
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company under the
Exchange Act with the Commission and are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1997;
(b) The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998;
(c) The Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1998;
(d) The Company's Current Report on Form 8-K filed by the Company
with the Commission on October 2, 1998; and
(e) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A (No. 001-13243),
including any subsequently filed amendments and reports filed
for the purpose of updating such description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Registration Statement and
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part of it from the respective dates of
filing such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the extent that a
statement contained herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
Copies of all documents which are incorporated herein by reference (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference in such documents) will be provided without charge to
each person, including any beneficial owner, to whom this Prospectus and the
applicable Prospectus Supplement are delivered upon written or oral request.
Requests should be directed to the Chief Financial Officer, Pan Pacific Retail
Properties, Inc., 1631-B South Melrose Drive, Vista, California 92083, telephone
number (760) 727-1002.
3
<PAGE> 6
THE COMPANY
GENERAL
Pan Pacific Retail Properties, Inc., a Maryland corporation (the
"Company"), is a self-administered and self-managed real estate investment trust
("REIT") formed in April 1997 to continue and expand the acquisition, ownership,
management, leasing and development business of Pan Pacific Development (U.S.)
Inc. ("PPD") and its affiliates. The Company's portfolio consists principally of
community and neighborhood shopping centers predominantly located in four key
western U.S. markets. As of September 1, 1998, the Company owned or controlled a
portfolio of 45 shopping center properties of which 41 are located in the
western United States including 11 in Northern California, 9 in Southern
California, 6 in Las Vegas, Nevada and 15 in the Pacific Northwest (Washington
and Oregon).
The Company employs personnel in the areas of administration,
accounting services, property management, maintenance, design, leasing,
acquisitions and business development. The Company's executive offices are
located at 1631-B South Melrose Drive, Vista, California, and its telephone
number is (760) 727-1002. In addition to personnel located at its executive
offices, the Company operates regional offices in Las Vegas, Nevada; Kent,
Washington; Chino, California; and Sacramento, California. Each of the regional
offices is responsible for property maintenance, management and leasing.
The Company was incorporated as a Maryland corporation in April 1997
and in August 1997 completed its initial public offering of Common Stock, which
is listed on the New York Stock Exchange under the symbol "PNP."
BUSINESS STRATEGIES
The Company's business strategies involve three fundamental practices:
(i) owning and operating shopping centers in select key markets with strong
economic and demographic characteristics in order to establish and maintain a
portfolio of real estate assets with stable income and the potential for
long-term growth; (ii) developing local and regional market expertise through
the hands-on participation of senior management in property operations and
leasing in order to capitalize on market trends, retailing trends and
acquisition opportunities; and (iii) establishing and maintaining a diversified
and complementary tenant mix with an emphasis on tenants that provide day-to-day
consumer necessities in order to provide steady rental revenue.
Through its regional offices, the Company implements its business
strategies by (i) its on-going analysis of regional and submarket demographic,
economic and retailing trends; (ii) developing and maintaining relationships
with key retailers, real estate brokers and financial institutions; (iii)
emphasizing tenant satisfaction and retention through its proactive
communication with tenants, community oriented marketing activities and
comprehensive maintenance programs; and (iv) applying aggressive cost control
practices and by capitalizing on cost reduction and economy of scale
opportunities arising from the size and proximity of its properties within each
region.
GROWTH STRATEGIES
The Company seeks to continue to utilize its in-depth market knowledge
within its four key markets to pursue its strategy of opportunistic acquisitions
of shopping centers for long-term investment. The Company believes that
significant opportunities exist within these markets to acquire shopping center
properties that are consistent with its existing portfolio in terms of quality
of construction, positive submarket demographics and location attributes and
that provide attractive initial capitalization rates with potential for growth
in cash flow. The Company further believes it has certain competitive advantages
which enhance its ability to identify and capitalize on acquisition
opportunities, including: (i) long-standing relationships with institutional and
other owners of shopping center properties in the Company's four primary
regions; (ii) fully integrated real estate operations which enable the Company
to respond quickly to acquisition opportunities and to capitalize on the
resulting economies of scale; and (iii) access to capital as a public company.
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USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Offered Securities
for general corporate purposes including, without limitation, the acquisition
and development of additional properties and the repayment of indebtedness. Net
proceeds from the sale of the Offered Securities initially may be temporarily
invested in short-term securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth ratios of earnings to fixed charges for
the periods shown. The results of operations for the six months ended June 30,
1998 relate solely to the Company. The results of operations used to compute the
ratio for the year ended December 31, 1997 include those of the Company from
August 13, 1997 through December 31, 1997 and those of Pan Pacific Development
Properties (described below) for the period from January 1, 1997 through August
12, 1997. The results of operations for the years ended December 31, 1996, 1995,
1994 and 1993 are the combined historical results of operations of Pan Pacific
Development Properties, which is not a legal entity, but consists solely of the
accounts of PPD related to the ownership, management and leasing of its
neighborhood and community shopping centers and medical office building. All of
the accounts of PPD unrelated to these activities have been excluded from the
combined historical financial statements of Pan Pacific Development Properties.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30, 1998 YEAR ENDED DECEMBER 31,
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1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
2.25x 1.64x 1.01x N/A(1) N/A(1) N/A(1)
</TABLE>
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(1) Earnings were inadequate to cover fixed charges for the years ended
December 31, 1995, 1994 and 1993. The dollar amount of the coverage
deficiency was $1,421,000, $3,784,000 and $122,000 for the years ended
December 31, 1995, 1994 and 1993, respectively.
The ratios of earnings to fixed charges were computed by dividing
earnings by fixed charges. For this purpose, earnings consist of income before
extraordinary items and fixed charges included in expense. Fixed charges consist
of interest costs, whether expensed or capitalized, and the amortization of debt
issuance costs. To date, the Company has not issued any Preferred Stock;
therefore, the ratios of earnings to fixed charges and preferred share dividends
are the same as the ratios presented above.
5
<PAGE> 8
This Prospectus contains statements which constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
When used in this Prospectus, the words "may", "will", "expect", "anticipate,"
"continue", "estimate", "project", "intend" and similar expressions are intended
to identify forward-looking statements regarding events, conditions, and
financial trends that may affect the Company's future plans of operations,
business strategy, results of operations and financial position. Prospective
investors are cautioned that any forward-looking statements are not guarantees
of future performance and are subject to risks and uncertainties, and that
actual results may differ materially from those included within the
forward-looking statements as a result of various factors.
RISK FACTORS
In addition to the other information contained or incorporated by
reference in this Prospectus (including the information contained in the
Company's Annual Report on Form 10-K under the heading "Certain Cautionary
Statements") or in any accompanying Prospectus Supplement, prospective investors
should carefully consider the following factors before investing in the
securities offered hereby.
EFFECT ON COMMON STOCK PRICE OF FUTURE SALES OF PLEDGED SHARES
Sales of a substantial number of shares of Common Stock, or the
perception that such sales could occur, could adversely affect prevailing market
prices of the Common Stock. As of September 1, 1998, PPD and its subsidiaries,
affiliates of the Company, own 10,808,012 shares of Common Stock (the "Pledged
Shares"), representing approximately 51.1% of the Company's total outstanding
shares of Common Stock as of that date, which have been pledged to Prudential
Securities Credit Corporation ("Lender") to secure revolving credit loans
extended to PPD pursuant to a credit agreement with the Lender (the "Credit
Agreement") in connection with the formation of the Company and the completion
of its initial public offering in August 1997 (the "IPO"). There are a number of
restrictions, however, on the ability of PPD and its subsidiaries to sell their
respective shares of Common Stock.
First, pursuant to contractual agreements with the Lender, PPD and its
subsidiaries have agreed not to sell the Pledged Shares until their respective
obligations under the Credit Agreement have been satisfied. The revolving credit
loans extended to PPD and its subsidiaries by Lender pursuant to the Credit
Agreement mature on August 13, 2000.
Second, PPD has agreed pursuant to a lock-up agreement with the
underwriters of the Company's IPO in August 1997 (the "Lock-up Agreement") not
to, directly or indirectly, without the prior written consent of Prudential
Securities Incorporated (the lead underwriter of the IPO), offer, sell, offer to
sell, contract to sell, pledge (except to the Lender pursuant to the Credit
Agreement), grant any option to purchase or otherwise sell or dispose of any
shares of Common Stock of the Company until August 2000 (three years after the
consummation of the IPO); provided, however, that the Lock-up Agreement applies
to only 4,162,702 shares of Common Stock owned by PPD (representing
approximately 38.5% of PPD's interest in the Company as of September 1, 1998)
due to certain tax considerations affecting the Company. Prudential Securities
Incorporated may, in its sole discretion, at any time and without notice,
release all or any portion of the shares of Common Stock subject to the Lock-up
Agreement.
Third, the shares of Common Stock owned by PPD are "restricted"
securities under the meaning of Rule 144 promulgated under the Securities Act
("Rule 144"). Therefore, so long as PPD remains an affiliate of the Company, PPD
may only sell its shares of Common Stock in accordance with the volume
limitations, manner of sale provisions, public information requirements and
notice requirements specified in Rule 144 or pursuant to a registration
statement covering the resale of such shares. Generally speaking, the number of
shares of Common Stock which may be sold pursuant to Rule 144 during any
consecutive three month period shall not exceed the greater of (i) 1% of the
shares of Common Stock outstanding, or (ii) the average weekly trading volume in
such shares of Common Stock reported on all national securities exchanges and/or
reported through the automated
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<PAGE> 9
quotation system of a registered securities association for the four calendar
weeks specified in Rule 144. In addition to the foregoing, PPD holds certain
registration rights granted by the Company in connection with its IPO which
obligate the Company to file and generally keep continuously effective,
beginning in August 2000 (three years after the completion of the IPO and
following the termination of the Lock-up Agreement), a registration statement
permitting the resale by PPD of shares of Common Stock it then owns.
Prior to the satisfaction by PPD and its subsidiaries of their
obligations under the Credit Agreement and in the event there is an uncured
default by PPD and its subsidiaries thereunder, the Lender may sell all or any
portion of the Pledged Shares as its remedy for such default. Resales of Pledged
Shares by the Lender, however, are not subject to any restrictions under the
Lock-up Agreement.
No prediction can be made about the effect that future sales, if any,
of the Pledged Shares by either the Lender or PPD in accordance with the
foregoing will have on the market price of the Common Stock.
7
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DESCRIPTION OF DEBT SECURITIES
GENERAL
The Debt Securities will be direct obligations of the Company, which
may be secured or unsecured, and which may be senior or subordinated
indebtedness of the Company. The Debt Securities may be issued under one or more
indentures, each dated as of a date on or before the issuance of the Debt
Securities to which it relates and in the form that has been filed as an exhibit
to the Registration Statement of which this Prospectus is a part or incorporated
by reference herein by means of a post-effective amendment to the Registration
Statement or a Form 8-K, subject to such amendments or supplements as may be
adopted from time to time. Each such indenture (collectively, the "Indenture")
will be entered into between the Company and a trustee (the "Trustee"), which
may be the same Trustee. The Indenture will be subject to, and governed by, the
Trust Indenture Act of 1939, as amended. The statements made hereunder relating
to the Indenture and the Debt Securities are summaries of certain anticipated
provisions thereof, do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all provisions of the Indenture and
such Debt Securities. Capitalized terms used but not defined herein shall have
the respective meanings set forth in the Indenture.
TERM
The particular terms of the Debt Securities offered by a Prospectus
Supplement will be described in the particular Prospectus Supplement, along with
any applicable modifications of or additions to the general terms of the Debt
Securities as described herein and in the applicable Indenture. Accordingly, for
a description of the terms of any series of Debt Securities, reference must be
made to both the Prospectus Supplement relating thereto and the description of
the Debt Securities set forth in this Prospectus. To the extent that any
particular terms of the Debt Securities described in a Prospectus Supplement
differ from any of the terms described herein, then such terms described herein
shall be deemed to have been superseded by such Prospectus Supplement.
Except as set forth in any Prospectus Supplement, the Debt Securities
may be issued without limit as to aggregate principal amount, in one or more
series, in each case as established from time to time by the Company's Board of
Directors or as set forth in the applicable Indenture or one or more indentures
supplemental to the Indenture. All Debt Securities of one series need not be
issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the holders of the Debt Securities of such
series, for issuances of additional Debt Securities of such series.
Each Indenture will provide that the Company may, but need not,
designate more than one Trustee thereunder, each with respect to one or more
series of Debt Securities. Any Trustee under an Indenture may resign or be
removed with respect to one or more series of Debt Securities, and a successor
Trustee may be appointed to act with respect to such series. If two or more
persons are acting as Trustee with respect to different series of Debt
Securities, each such Trustee shall be a Trustee of a trust under the applicable
Indenture separate and apart from the trust administered by any other Trustee
and, except as otherwise indicated herein, any action described herein to be
taken by a Trustee may be taken by each such Trustee with respect to, and only
with respect to, the one or more series of Debt Securities for which it is
Trustee under the applicable Indenture.
The following summaries set forth certain general terms and provisions
of the Indenture and the Debt Securities. The Prospectus Supplement relating to
the series of Debt Securities being offered will contain further terms of such
Debt Securities, including the following specific terms:
(1) the title of such Debt Securities;
(2) the aggregate principal amount of such Debt Securities and any
limit on such aggregate principal amount;
(3) the price (expressed as a percentage of the principal amount
thereof) at which such Debt Securities will be issued and, if other than the
principal amount thereof, the portion of the principal amount thereof
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<PAGE> 11
payable upon declaration of acceleration of the maturity thereof, or (if
applicable) the portion of the principal amount of such Debt Securities that is
convertible into Common Stock or Preferred Stock, or the method by which any
such portion shall be determined;
(4) if convertible, the terms on which such Debt Securities are
convertible, including the initial conversion price or rate and conversion
period and, in connection with the preservation of the Company's status as a
REIT, any applicable limitations on the ownership or transferability of the
Common Stock or the Preferred Stock into which such Debt Securities are
convertible;
(5) the date or dates, or the method for determining such date or
dates, on which the principal of such Debt Securities will be payable;
(6) the rate or rates (which may be fixed or variable), or the
method by which such rate or rates shall be determined, at which such Debt
Securities will bear interest, if any;
(7) the date or dates, or the method for determining such date or
dates, from which any interest will accrue, the dates upon which any such
interest will be payable, the record dates for payment of such interest, or the
method by which any such dates shall be determined, the persons to whom such
interest shall be payable, and the basis upon which interest shall be calculated
if other than that of a 360-day year of twelve 30-day months;
(8) the place or places where the principal of (and premium, if
any) and interest, if any, on such Debt Securities will be payable, where such
Debt Securities may be surrendered for conversion or registration of transfer or
exchange and where notices or demands to or upon the Company in respect of such
Debt Securities and the Indenture may be served;
(9) the period or periods, if any, within which, the price or
prices at which and the terms and conditions upon which such Debt Securities may
be redeemed, as a whole or in part, at the Company's option;
(10) the obligation, if any, of the Company to redeem, repay or
purchase such Debt Securities pursuant to any sinking fund or analogous
provision or at the option of a holder thereof, and the period or periods within
which, the price or prices at which and the terms and conditions upon which such
Debt Securities will be redeemed, repaid or purchased, as a whole or in part,
pursuant to such obligation;
(11) if other than U.S. dollars, the currency or currencies in
which such Debt Securities are denominated and payable, which may be a foreign
currency or units of two or more foreign currencies or a composite currency or
currencies, and the terms and conditions relating thereto;
(12) whether the amount of payments of principal of (and premium,
if any) or interest, if any, on such Debt Securities may be determined with
reference to an index, formula or other method (which index, formula or method
may, but need not, be based on a currency, currencies, currency unit or units or
composite currency or currencies) and the manner in which such amounts shall be
determined;
(13) whether such Debt Securities will be issued in certificated
and/or book-entry form, and, if so, the identity of the depositary for such Debt
Securities;
(14) whether such Debt Securities will be in registered or bearer
form and, if in registered form, the denominations thereof if other than $1,000
and any integral multiple thereof and, if in bearer form, the denominations
thereof and terms and conditions relating thereto;
(15) the applicability, if any, of the defeasance and covenant
defeasance provisions described herein or set forth in the applicable Indenture,
or any modification thereof;
(16) any deletions from, modifications of or additions to the
events of default or covenants of the Company with respect to such Debt
Securities;
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(17) whether and under what circumstances the Company will pay any
Additional Amounts on such Debt Securities in respect of any tax, assessment or
governmental charge and, if so, whether the Company will have the option to
redeem such Debt Securities in lieu of making such payment;
(18) the subordination provisions, if any, relating to such Debt
Securities;
(19) the provisions, if any, relating to any security provided for
such Debt Securities; and
(20) any other terms of such Debt Securities.
If so provided in the applicable Prospectus Supplement, the Debt
Securities may be issued at a discount below their principal amount and provide
for less than the entire principal amount thereof to be payable upon declaration
of acceleration of the maturity thereof ("Original Issue Discount Securities").
In such cases, any material U.S. federal income tax, accounting and other
considerations applicable to Original Issue Discount Securities will be
described in the applicable Prospectus Supplement.
DENOMINATIONS, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement, the
Debt Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof. Unless otherwise described in the applicable
Prospectus Supplement, the principal of (and premium, if any) and interest on
any series of Debt Securities will be payable at the applicable Trustee's
corporate trust office, the address of which will be set forth in the applicable
Prospectus Supplement; provided, however, that, unless otherwise provided in the
applicable Prospectus Supplement, at the Company's option, payment of interest
may be made by check mailed to the address of the person entitled thereto as it
appears in the applicable register for such Debt Securities or by wire transfer
of funds to such person at an account maintained within the United States.
Subject to certain limitations imposed on Debt Securities issued in
book-entry form, the Debt Securities of any series will be exchangeable for any
authorized denomination of other Debt Securities of the same series and of a
like aggregate principal amount and tenor upon surrender of such Debt Securities
at the office of any transfer agent designated by the Company for such purpose.
In addition, subject to certain limitations imposed on Debt Securities issued in
book-entry form, the Debt Securities of any series may be surrendered for
conversion or registration of transfer thereof at the office of any transfer
agent designated by the Company for such purpose. Every Debt Security
surrendered for conversion, registration of transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer and the person
requesting such transfer must provide evidence of title and identity
satisfactory to the Company and the applicable transfer agent. No service charge
will be made for any registration of transfer or exchange of any Debt
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. The Company
may at any time rescind the designation of any transfer agent appointed with
respect to the Debt Securities of any series or approve a change in the location
through which any such transfer agent acts, except that the Company will be
required to maintain a transfer agent in each place of payment for such series.
The Company may at any time designate additional transfer agents with respect to
any series of Debt Securities.
Neither the Company nor any Trustee shall be required to (a) issue,
register the transfer of or exchange Debt Securities of any series if such Debt
Security may be among those selected for redemption during a period beginning at
the opening of business 15 days before the mailing or first publication, as the
case may be, of notice of redemption of such Debt Securities and ending at the
close of business on (i) if the Debt Securities of such series are issuable only
in registered form, the day of mailing of the relevant notice of redemption or
(ii) if the Debt Securities of such series are issuable in bearer form, the day
of the first publication of the relevant notice of redemption or, if such Debt
Securities are also issuable in registered form and there is no such
publication, the day of mailing of the relevant notice of redemption; (b)
register the transfer of or exchange any Debt Security in registered form, or
portion thereof, so selected for redemption, in whole or in part, except the
unredeemed portion of any Debt Security being redeemed in part; or (c) exchange
any Debt Security in bearer form so selected for redemption, except in exchange
for a Debt Security of such series in registered form that is simultaneously
surrendered for redemption; or
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(d) issue, register the transfer of or exchange any Debt Security that has been
surrendered for repayment at the holder's option, except the portion, if any, of
such Debt Security not to be so repaid.
MERGER, CONSOLIDATION OR SALE OF ASSETS
Each Indenture will provide that the Company will not consolidate with,
or sell, lease or convey all or substantially all of its assets to, or merge
with or into, any person unless (a) either the Company shall be the continuing
entity, or the successor person (if other than the Company) formed by or
resulting from any such consolidation or merger or which shall have received the
transfer of such assets shall be a corporation organized and existing under the
laws of the United States or any State thereof and shall expressly assume the
Company's obligation to pay the principal of (and premium, if any) and interest
on all the Debt Securities issued under such Indenture and the due and punctual
performance and observance of all the covenants and conditions contained in such
Indenture and in such Debt Securities; (b) immediately after giving effect to
such transaction and treating any indebtedness that becomes an obligation of the
Company or any Subsidiary as a result thereof as having been incurred, and any
liens on any property or assets of the Company or any Subsidiary that are
incurred, created or assumed as a result thereof as having been created,
incurred or assumed, by the Company or such Subsidiary at the time of such
transaction, no event of default under the Indenture, and no event that, after
notice or the lapse of time, or both, would become such an event of default,
shall have occurred and be continuing; and (c) an officers' certificate and
legal opinion covering such conditions shall be delivered to the Trustee.
CERTAIN COVENANTS
EXISTENCE. Except as permitted under "--Merger, Consolidation or Sale
of Assets," each Indenture will require the Company to do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence, all material rights (by charter, by-laws and statute) and all
material franchises; provided, however, that the Company shall not be required
to preserve any right or franchise if its Board of Directors determines that the
preservation thereof is no longer desirable in the conduct of its business.
MAINTENANCE OF PROPERTIES. Each Indenture will require the Company to
cause all of its material properties used or useful in the conduct of its
business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and to cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the Company's judgment may be
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that the
Company and its Subsidiaries shall not be prevented from selling or otherwise
disposing of their properties for value in the ordinary course of business.
INSURANCE. Each Indenture will require the Company to, and to cause
each of its Subsidiaries to, keep in force upon all of its properties and
operations policies of insurance carried with responsible companies in such
amounts and covering all such risks as shall be customary in the industry in
accordance with prevailing market conditions and availability.
PAYMENT OF TAXES AND OTHER CLAIMS. Each Indenture will require the
Company to pay or discharge or cause to be paid or discharged, before the same
shall become delinquent, (a) all taxes, assessments and governmental charges
levied or imposed on it or any Subsidiary or on the income, profits or property
of the Company or any Subsidiary and (b) all lawful claims for labor, materials
and supplies that, if unpaid, might by law become a lien upon the property of
the Company or any Subsidiary; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim the amount, applicability or validity of which is
being contested in good faith by appropriate proceedings.
PROVISION OF FINANCIAL INFORMATION. Whether or not the Company is
subject to Section 13 or 15(d) of the Exchange Act, each Indenture will require
the Company, within 15 days after each of the respective dates by which the
Company would have been required to file annual reports, quarterly reports and
other documents with the Commission if the Company were so subject, (a) to
transmit by mail to all holders of Debt Securities issued under such Indenture,
as their names and addresses appear in the applicable register for such Debt
Securities, without cost to such holders, copies of the annual reports,
quarterly reports and other documents that the Company would have
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been required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act if the Company were subject to such Sections, (b) to file with the
applicable Trustee copies of the annual reports, quarterly reports and other
documents that the Company would have been required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act if the Company were subject
to such Sections, and (c) to supply, promptly upon written request and payment
of the reasonable cost of duplication and delivery, copies of such documents to
any prospective holder of such Debt Securities.
Except as may otherwise be provided in the Prospectus Supplement
relating to any series of Debt Securities, the term "Subsidiary", as used in the
Indenture, means with respect to the Company, any other Person of which more
than 50% of (i) the equity or other ownership interests or (ii) the total voting
power of shares of capital stock or other ownership interests entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers, trustees or general or managing partners thereof is at the
time owned by the Company or one or more of the other Subsidiaries of the
Company or a combination thereof.
ADDITIONAL COVENANTS. Any additional covenants of the Company with
respect to any of the series of Debt Securities will be set forth in the
Prospectus Supplement relating thereto.
EVENTS OF DEFAULT, NOTICE AND WAIVER
Unless otherwise provided in the applicable Indenture, each Indenture
will provide that the following events are "events of default" with respect to
any series of Debt Securities issued thereunder: (a) default for 30 days in the
payment of any installment of interest on any Debt Security of such series; (b)
default in the payment of the principal of (or premium, if any, on) any Debt
Security of such series when due, whether at stated maturity or by declaration
of acceleration, notice of redemption, notice of option to elect repayment or
otherwise; (c) default in making any sinking fund payment as required for any
Debt Security of such series; (d) default in the performance of any other
covenant of the Company contained in the Indenture (other than a covenant added
to the Indenture solely for the benefit of a series of Debt Securities issued
thereunder other than such series), continued for 60 days after written notice
to the Company by the Trustee or the holders of at least 25% in principal amount
of the outstanding Debt Securities of such series; (e) a default under any bond,
debenture, note or other evidence of indebtedness for money borrowed by the
Company or any of its Subsidiaries (including obligations under leases required
to be capitalized on the balance sheet of the lessee under generally accepted
accounting principles, but not including any indebtedness or obligations for
which recourse is limited to property purchased) in an aggregate principal
amount in excess of $25,000,000 or under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any indebtedness for money borrowed by the Company or any of its Subsidiaries
(including such leases, but not including such indebtedness or obligations for
which recourse is limited to property purchased) in an aggregate principal
amount in excess of $25,000,000, whether such indebtedness exists at the date of
the relevant Indenture or shall thereafter be created, which default shall have
resulted in such indebtedness becoming or being declared due and payable prior
to the date on which it would otherwise have become due and payable or such
obligations being accelerated, without such acceleration having been rescinded
or annulled; (f) certain events of bankruptcy, insolvency or reorganization, or
court appointment of a receiver, liquidator or trustee of the Company or any
Significant Subsidiary of the Company; and (g) any other Event of Default
provided with respect to a particular series of Debt Securities. The term
"Significant Subsidiary" has the meaning ascribed to such term in Regulation S-X
promulgated under the Securities Act.
If an event of default under any Indenture with respect to Debt
Securities of any series at the time outstanding occurs and is continuing, then
in every such case the applicable Trustee or the holders of not less than 25% in
principal amount of the outstanding Debt Securities of that series may declare
the principal amount (or, if the Debt Securities of that series are Original
Issue Discount Securities or Indexed Securities, such portion of the principal
amount as may be specified in the terms thereof) of all the Debt Securities of
that series to be due and payable immediately by written notice thereof to the
Company (and to the applicable Trustee if given by the holders). However, at any
time after such a declaration of acceleration with respect to Debt Securities of
such series has been made, but before a judgment or decree for payment of the
money due has been obtained by the applicable Trustee, the holders of not less
than a majority of the principal amount of the outstanding Debt Securities of
such series may rescind and annul such declaration and its consequences if (a)
the Company shall have deposited with the
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applicable Trustee all required payments of the principal of (and premium, if
any) and interest on the Debt Securities of such series (other than principal
and premium, if any, and interest which have become due solely as a result of
such acceleration), plus certain fees, expenses, disbursements and advances of
the applicable Trustee and (b) all events of default, other than the nonpayment
of accelerated principal (or specified portion thereof), premium, if any, and
interest with respect to Debt Securities of such series have been cured or
waived as provided in the Indenture. Each Indenture will also provide that the
holders of not less than a majority in principal amount of the outstanding Debt
Securities of any series may waive any past default with respect to such series
and its consequences, except a default (y) in the payment of the principal of
(or premium, if any) or interest on any Debt Security of such series or (z) in
respect of a covenant or provision contained in such Indenture that cannot be
modified or amended without the consent of the holder of each outstanding Debt
Security of such series affected thereby.
Each Indenture will require each Trustee to give notice to the holders
of Debt Securities within 90 days of a default under the Indenture unless such
default shall have been cured or waived, subject to certain exceptions;
provided, however, that such Trustee may withhold notice to the holders of any
series of Debt Securities of any default with respect to such series (except a
default in the payment of the principal of (or premium, if any) or interest on
any Debt Security of such series or in the payment of any sinking fund
installment in respect of any Debt Security of such series) if specified
Responsible Officers of the Trustee consider such withholding to be in such
holders' interest.
Each Indenture will provide that no holders of Debt Securities of any
series may institute any proceedings, judicial or otherwise, with respect to the
Indenture or for any remedy thereunder, except in the case of failure of the
Trustee, for 60 days, to act after it has received a written request to
institute proceedings in respect of an event of default from the holders of not
less than 25% in principal amount of the outstanding Debt Securities of such
series, as well as an offer of indemnity reasonably satisfactory to it, and no
direction inconsistent with such written request has been given to the Trustee
during such 60-day period by holders of a majority in principal amount of the
outstanding Debt Securities of such series. This provision will not prevent,
however, any holder of Debt Securities from instituting suit for the enforcement
of payment of the principal of (and premium, if any) and interest on such Debt
Securities at the respective due dates thereof.
Each Indenture will provide that, subject to provisions in the Trust
Indenture Act of 1939 relating to its duties in case of default, the Trustee is
under no obligation to exercise any of its rights or powers under the Indenture
at the request or direction of any holders of any series of Debt Securities then
outstanding under the Indenture, unless such holders shall have offered to the
Trustee reasonable security or indemnity. The holders of not less than a
majority in principal amount of the outstanding Debt 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 of exercising any trust
or power conferred upon the Trustee; provided that such direction shall not
conflict with any rule of law or the Indenture and the Trustee may refuse to
follow any direction that may involve the Trustee in personal liability or that
may be unduly prejudicial to the holders of Debt Securities of such series not
joining therein.
Within 120 days after the close of each fiscal year, the Company will
be required to deliver to the Trustee a certificate, signed by one of several
specified officers, stating whether or not such officer has knowledge of any
default under the Indenture and, if so, specifying each such default and the
nature and status thereof.
MODIFICATION OF THE INDENTURE
Modifications and amendments of any Indenture will be permitted with
the consent of the holders of not less than a majority in principal amount of
all outstanding Debt Securities of each series issued under such Indenture
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the holder of each Debt
Security affected thereby, (a) change the stated maturity of the principal of,
or any installment of principal, interest (or premium, if any) on, any such Debt
Security; (b) reduce the principal amount of, or the rate or amount of interest
on, or any premium payable on redemption of, any such Debt Security, or reduce
the amount of principal of an Original Issue Discount Security that would be due
and payable upon declaration of acceleration of the maturity thereof or would be
provable in bankruptcy, or adversely affect any right of repayment at the option
of the holder of any Debt Security (or reduce the amount of premium payable upon
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any such repayment); (c) change the place of payment, or the coin or currency,
for payment of principal of (or premium, if any) or interest on any such Debt
Security; (d) impair the right to institute suit for the enforcement of any
payment on or with respect to any such Debt Security when due; (e) reduce the
above-stated percentage of outstanding Debt Securities of any series necessary
to modify or amend the Indenture, to waive compliance with certain provisions
thereof or certain defaults and consequences thereunder or to reduce the quorum
or voting requirements set forth in the Indenture; or (f) modify any of the
foregoing provisions or any of the provisions relating to the waiver of certain
past defaults or certain covenants, except to increase the required percentage
to effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the holder of each outstanding Debt
Security affected thereby.
The holders of a majority in aggregate principal amount of outstanding
Debt Securities of any series may, on behalf of all holders of Debt Securities
of that series waive, insofar as that series is concerned, compliance by the
Company with certain restrictive covenants in the applicable Indenture.
Modifications and amendments of an Indenture will be permitted to be
made by the Company and the Trustee without the consent of any holder of Debt
Securities for any of the following purposes: (a) to evidence the succession of
another person to the Company as obligor under the Indenture; (b) to add to the
covenants of the Company for the benefit of the holders of all or any series of
Debt Securities or to surrender any right or power conferred upon the Company in
the Indenture; (c) to add events of default for the benefit of the holders of
all or any series of Debt Securities; (d) to add or change any provisions of the
Indenture to facilitate the issuance of, or to liberalize certain terms of, Debt
Securities in bearer form, or to permit or facilitate the issuance of Debt
Securities in uncertificated form, provided that such action shall not adversely
affect the interests of the holders of the Debt Securities of any series in any
material respect; (e) to change or eliminate any provisions of the Indenture,
provided that any such change or elimination does not apply to any outstanding
Debt Securities of a series created prior to the date of such amendment or
supplement that are entitled to the benefit of such provision; (f) to secure the
Debt Securities; (g) to establish the form or terms of Debt Securities of any
series, including the provisions and procedures, if applicable, for the
conversion of such Debt Securities into Common Stock or Preferred Stock; (h) to
provide for the acceptance of appointment by a successor Trustee or facilitate
the administration of the trusts under the Indenture by more than one Trustee;
(i) to cure any ambiguity, defect or inconsistency in the Indenture or to make
any other provisions with respect to matters or questions arising under the
Indenture provided, however, that such action shall not adversely affect the
interests of holders of Debt Securities of any series in any material respect;
or (j) to supplement any of the provisions of the Indenture to the extent
necessary to permit or facilitate defeasance, covenant defeasance and discharge
of any series of such Debt Securities, provided, however, that such action shall
not adversely affect the interests of the holders of the Debt Securities of any
series in any material respect.
Each Indenture will provide that in determining whether the holders of
the requisite principal amount of outstanding Debt Securities of a series have
given any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of holders of Debt
Securities, (a) the principal amount of an Original Issue Discount Security that
shall be deemed to be outstanding shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon
declaration of acceleration of the maturity thereof, (b) the principal amount of
any Debt Security denominated in a foreign currency that shall be deemed
outstanding shall be the U.S. dollar equivalent, determined on the issue date
for such Debt Security, of the principal amount (or, in the case of an Original
Issue Discount Security, the U.S. dollar equivalent on the issue date of such
Debt Security of the amount determined as provided in (a) above), (c) the
principal amount of an Indexed Security that shall be deemed outstanding shall
be the principal face amount of such Indexed Security at original issuance,
unless otherwise provided with respect to such Indexed Security in the
applicable Indenture, and (d) Debt Securities owned by the Company or any other
obligor upon the Debt Securities or any affiliate of the Company or of such
other obligor shall be disregarded.
Each Indenture will contain provisions for convening meetings of the
holders of Debt Securities of a series. A meeting may be permitted to be called
at any time by the Trustee, and also, upon request, by the Company or the
holders of at least 10% in principal amount of the outstanding Debt Securities
of such series, in any such case upon notice given as provided in the Indenture.
Except for any consent or waiver that must be given by the holder of each Debt
Security affected thereby, any resolution presented at a meeting or adjourned
meeting duly reconvened at
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which a quorum is present may be adopted by the affirmative vote of the holders
of a majority in principal amount of the outstanding Debt Securities of that
series; provided, however, that, except as referred to above, any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that may be made, given or taken by the holders of a
specified percentage, which is less than a majority, in principal amount of the
outstanding Debt Securities of a series may be adopted at a meeting or adjourned
meeting duly reconvened at which a quorum is present by the affirmative vote of
the holders of such specified percentage in principal amount of the outstanding
Debt Securities of that series. Any resolution passed or decision taken at any
meeting of holders of Debt Securities of any series duly held in accordance with
the Indenture will be binding on all holders of Debt Securities of that series.
The persons holding or representing a majority in principal amount of the
outstanding Debt Securities of a series shall constitute a quorum for a meeting
of holders of such series; provided, however, that if any action is to be taken
at such meeting with respect to a consent or waiver that may be given by the
holders of not less than a specified percentage in principal amount of the
outstanding Debt Securities of a series, the persons holding or representing
such specified percentage in principal amount of the outstanding Debt Securities
of such series will constitute a quorum.
Notwithstanding the foregoing provisions, each Indenture will provide
that if any action is to be taken at a meeting of holders of Debt Securities of
any series with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that the Indenture expressly provides
may be made, given or taken by the holders of such series and one or more
additional series: (a) there shall be no minimum quorum requirement for such
meeting and (b) the principal amount of the outstanding Debt Securities of all
such series that are entitled to vote in favor of such request, demand,
authorization, direction, notice, consent, waiver or other action shall be taken
into account in determining whether such request, demand, authorization,
direction, notice, consent, waiver or other action has been made, given or taken
under the Indenture.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Unless otherwise indicated in the applicable Prospectus Supplement,
upon request of the Company any Indenture shall cease to be of further effect
with respect to any series of Debt Securities issued thereunder specified in
such Company request (except as to certain limited provisions of such Indenture
which shall survive) when either (i) all Debt Securities of such series have
been delivered to the Trustee for cancellation or (ii) all Debt Securities of
such series have become due and payable or will become due and payable within
one year (or are scheduled for redemption within one year) and the Company has
irrevocably deposited with the applicable Trustee, in trust, funds in such
currency or currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are payable in an amount sufficient to
pay the entire indebtedness on such Debt Securities in respect of principal (and
premium, if any) and interest to the date of such deposit (if such Debt
Securities have become due and payable) or to the stated maturity or redemption
date, as the case may be.
Each Indenture will provide that, unless otherwise indicated in the
applicable Prospectus Supplement, the Company may elect either to (a) defease
and be discharged from any and all obligations with respect to any series of
Debt Securities (except for the obligation to pay Additional Amounts, if any,
upon the occurrence of certain events of tax with respect to payments on such
Debt Securities and the obligations to register the transfer or exchange of such
Debt Securities, to replace temporary or mutilated, destroyed, lost or stolen
Debt Securities, to maintain an office or agency in respect of such Debt
Securities and to hold money for payment in trust) ("defeasance") or (b) be
released from its obligations with respect to certain covenants (which will be
described in the relevant Prospectus Supplement) applicable to such Debt
Securities under the applicable Indenture (which may include, subject to a
limited exception, the covenants described under "--Certain Covenants"), and any
omission to comply with such obligations shall not constitute a default or an
event of default with respect to such Debt Securities ("covenant defeasance"),
in either case upon the irrevocable deposit by the Company with the applicable
Trustee, in trust, of an amount, in such currency or currencies, currency unit
or units or composite currency or currencies in which such Debt Securities are
payable at stated maturity, or Government Obligations (as defined below), or
both, applicable to such Debt Securities that through the scheduled payment of
principal and interest in accordance with their terms will provide money in an
amount sufficient to pay the principal of (and premium, if any) and interest on
such Debt Securities, and any mandatory sinking fund or analogous payments
thereon, on the scheduled due dates therefor.
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Such a trust may only be established if, among other things, the
Company has delivered to the applicable Trustee an opinion of counsel (as
specified in the applicable Indenture) to the effect that the holders of such
Debt Securities will not recognize income, gain or loss for U.S. federal income
tax purposes as a result of such defeasance or covenant defeasance and will be
subject to U.S. federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance or covenant
defeasance had not occurred, and such opinion of counsel, in the case of
defeasance, must refer to and be based on a ruling of the Internal Revenue
Service (the "IRS") or a change in applicable U.S. federal income tax law
occurring after the date of the applicable Indenture. In the event of such
defeasance, the holders of such Debt Securities would thereafter be able to look
only to such trust fund for payment of principal (and premium, if any) and
interest.
"Government Obligations" means securities that are (a) direct
obligations of the United States of America or the government which issued the
foreign currency in which the Debt Securities of a particular series are
payable, for the payment of which its full faith and credit is pledged, or (b)
obligations of a person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which issued
the foreign currency in which the Debt Securities of such series are payable,
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other government, which, in
either case, are not callable or redeemable at the option of the issuer thereof,
and shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such Government Obligation or a specific payment
of interest on or principal of any such Government, provided, however, that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the Government Obligation or
the specific payment of interest on or principal of the Government Obligation
evidenced by such depository receipt.
Unless otherwise provided in the applicable Prospectus Supplement, if
after the Company has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any series,
(a) the holder of a Debt Security of such series is entitled to, and does, elect
pursuant to the applicable Indenture or the terms of such Debt Security to
receive payment in a currency, currency unit or composite currency other than
that in which such deposit has been made in respect of such Debt Security or (b)
a Conversion Event (as defined below) occurs in respect of the currency,
currency unit or composite currency in which such deposit has been made, the
indebtedness represented by such Debt Security will be deemed to have been, and
will be, fully discharged and satisfied through the payment of the principal of
(and premium, if any) and interest on such Debt Security as they become due out
of the proceeds yielded by converting the amount so deposited in respect of such
Debt Security into the currency, currency unit or composite currency in which
such Debt Security becomes payable as a result of such election or Conversion
Event based on the applicable market exchange rate. "Conversion Event" means the
cessation of use of (i) a currency, currency unit or composite currency both by
the government of the country which issued such currency and for the settlement
of transactions by a central bank or other public institution of or within the
international banking community, (ii) the ECU both within the European Monetary
System and for the settlement of transactions by public institutions of or
within the European Communities, or (iii) any currency unit or composite
currency other than the ECU for the purposes for which it was established.
Unless otherwise provided in the applicable Prospectus Supplement, all
payments of principal of (and premium, if any) and interest on any Debt Security
that is payable in a foreign currency that ceases to be used by its government
of issuance shall be made in U.S. dollars.
In the event the Company effects covenant defeasance with respect to
any Debt Securities and such Debt Securities are declared due and payable
because of the occurrence of any event of default, other than the event of
default described in clause (d) under "--Events of Default, Notice and Waiver"
with respect to the specified sections of the applicable Indenture (which
sections would no longer be applicable to such Debt Securities) or clause (g)
thereunder with respect to any other covenant as to which there has been
covenant defeasance, the amount in such currency, currency unit or composite
currency in which such Debt Securities are payable, and Government Obligations
on deposit with the applicable Trustee, may not be sufficient to pay amounts due
on such Debt Securities at the time of the acceleration resulting from such
event of default. The Company would, however, remain liable to make payment of
such amounts due at the time of acceleration. The applicable Prospectus
Supplement may further describe the provisions, if any, permitting such
defeasance or covenant defeasance,
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including any modifications to the provisions described above, with respect to
the Debt Securities of or within a particular series.
CONVERSION RIGHTS
The terms and conditions, if any, upon which the Debt Securities are
convertible into Common Stock or Preferred Stock will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include
whether such Debt Securities are convertible into Common Stock or Preferred
Stock, the conversion price (or manner of calculation thereof), the conversion
period, provisions as to whether conversion will be at the option of the holders
or the Company, the events requiring an adjustment of the conversion price and
provisions affecting conversion in the event of the redemption of such Debt
Securities and any restrictions on conversion, including restrictions directed
at maintaining the Company's REIT status.
UNCLAIMED PAYMENTS
All amounts paid by the Company to a paying agent or a Trustee for the
payment of the principal of or any premium or interest on any Debt Security that
remain unclaimed at the end of two years after such principal, premium or
interest has become due and payable will be repaid to the Company, and the
holder of such Debt Security thereafter may look only to the Company for payment
thereof.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in
the form of one or more global securities (the "Global Securities") that will be
deposited with, or on behalf of, a depositary identified in the applicable
Prospectus Supplement relating to such series. Global Securities may be issued
in either registered or bearer form and in either temporary or permanent form.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be described in the applicable Prospectus Supplement
relating to such series.
DESCRIPTION OF COMMON STOCK
The following summary of the terms of the Company's capital stock does
not purport to be complete and is subject to and qualified in its entirety by
reference to the Company's Charter and Bylaws, copies of which are on file with
the Commission as exhibits to registration statements previously filed by the
Company. See "Available Information."
The Company has authority to issue 100,000,000 shares of Common Stock,
$.01 par value per share: As of September 1, 1998, the Company had outstanding
21,162,012 shares of Common Stock.
GENERAL
The following description of the Common Stock sets forth certain
general terms and provisions of the Common Stock to which any Prospectus
Supplement may relate, including a Prospectus Supplement providing that shares
of Common Stock will be issuable upon conversion of Debt Securities, Preferred
Stock or Depository Shares or upon the exercise of Warrants issued by the
Company.
TERMS
Each outstanding share of Common Stock entitles the holder to one vote
on all matters presented to stockholders for a vote, including the election of
directors, and, except as otherwise required by law and except as now or later
provided in the Charter, the holders of such shares will possess the exclusive
voting power, subject to the provisions of the Charter regarding the ownership
of shares of Common Stock in excess of the Ownership Limit, or such other limit
as provided in the Charter or as otherwise permitted by the Board of Directors
described below. Holders of shares of Common Stock have no preference,
conversion, exchange, sinking fund, redemption or appraisal rights and, with the
exception of PPD's proportional participation rights, have no preemptive rights
to
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subscribe for any securities of the Company or cumulative voting rights in the
election of directors. All shares of Common Stock issued and outstanding are
duly authorized, fully paid and nonassessable. Subject to the preferential
rights of any other shares or series of stock and to the provisions of the
Charter regarding ownership of shares of Common Stock in excess of the Ownership
Limit, or such other limit as provided in the Charter or as otherwise permitted
by the Board of Directors described below, distributions are paid to the holders
of shares of Common Stock if and when authorized by the Board of Directors of
the Company out of assets legally available therefor.
If the Company is liquidated, subject to the right of any holders of
Preferred Stock to receive preferential distributions, each outstanding share of
Common Stock will be entitled to participate pro rata in the assets remaining
after payment of, or adequate provision for, all known debts and liabilities of
the Company.
Subject to the provisions of the Charter regarding the ownership of
shares of Common Stock in excess of the Ownership Limit, or such other limit as
provided in the Charter or as otherwise permitted by the Board of Directors as
described below, all shares of Common Stock will have equal distribution,
liquidation and voting rights, and will have no preference or exchange rights.
See "Restrictions on Ownership and Transfer of Capital Stock."
Under the Maryland General Corporation Law (the "MGCL"), a Maryland
corporation generally cannot dissolve, amend its charter, merge, sell all or
substantially all of its assets, engage in a share exchange or engage in similar
transactions outside the ordinary course of business unless approved by the
affirmative vote of stockholders holding at least two-thirds of the shares
entitled to vote on the matter unless a lesser percentage (but not less than a
majority of all of the votes entitled to be cast on the matter) is set forth in
the corporation's charter. The phrase "substantially all of the assets" is not
defined in the MGCL and is, therefore, subject to interpretation by courts
applying Maryland law in the context of the facts and circumstances of any
particular case. The Charter of the Company provides that each of these matters
may be approved by the stockholders by a majority of all the votes entitled to
be cast on the matter.
The Charter authorizes the Board of Directors to reclassify any
unissued shares of Common Stock into other classes or series of classes of stock
and to establish the number of shares in each class or series and to set the
preferences, conversion and other rights, voting powers, restrictions,
limitations and restrictions on ownership, limitations as to dividends or other
distributions, qualifications and terms or conditions of redemption for each
such class or series.
RESTRICTIONS ON OWNERSHIP
For the Company to qualify as a REIT under the Internal Revenue Code of
1986, as amended (the "Code'), subject to certain exceptions, no more than 50%
in value of the Company's outstanding shares of stock may be owned, actually or
constructively, by five or fewer individuals (defined in the Code to include
certain entities) during the last half of a taxable year. To assist the Company
in meeting this requirement and certain other requirements relating to its tax
status as a REIT, the Company may take certain actions to limit the actual,
beneficial or constructive ownership by a single person or entity of the
Company's outstanding equity securities. See "Restrictions on Ownership and
Transfer of Capital Stock."
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is The Bank of
New York.
DESCRIPTION OF PREFERRED STOCK
The Company is authorized to issue 30,000,000 shares of Preferred
Stock, $.01 par value per share, of which no shares were outstanding as of
September 1, 1998.
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GENERAL
Preferred Stock may be issued from time to time, in one or more series,
as authorized by the Board of Directors. No Preferred Stock is currently issued
or outstanding. Prior to the issuance of shares of each series, subject to the
provisions of the Charter regarding the restrictions on transfer of stock, the
Board of Directors is required by the MGCL and the Charter to fix for each
series the terms, preferences, conversion or other rights, voting powers,
restrictions, limitations as to distributions, qualifications and terms or
conditions of redemption, as permitted by Maryland law. Because the Board of
Directors has the power to establish the preferences, powers and rights of each
series of Preferred Stock, it may afford the holders of any series of Preferred
Stock preferences, powers and rights, voting or otherwise, senior to the rights
of holders of shares of Common Stock. The issuance of Preferred Stock could have
the effect of delaying or preventing a transaction or a change of control of the
Company that might involve a premium price for holders of Common Stock or
otherwise be in their best interest. The Board of Directors has no present plans
to issue any Preferred Stock.
Preferred Stock, upon issuance against full payment of the purchase
price therefor, will be fully paid and nonassessable. The specific terms of a
particular class or series of Preferred Stock will be described in the
Prospectus Supplement relating to that class or series, including a Prospectus
Supplement providing that Preferred Stock may be issuable upon the exercise of
Warrants issued by the Company. The description of Preferred Stock set forth
below and the description of the terms of a particular class or series of
Preferred Stock set forth in a Prospectus Supplement do not purport to be
complete and are qualified in their entirety by reference to the articles
supplementary relating to that class or series.
The preferences and other terms of the Preferred Stock of each class or
series will be fixed by the articles supplementary relating to such class or
series. A Prospectus Supplement, relating to each class or series, will specify
the terms of the Preferred Stock as follows:
(1) The title and stated value of such Preferred Stock;
(2) The number of shares of such Preferred Stock offered, the
liquidation preference per share and the offering price of
such Preferred Stock;
(3) The dividend rate(s), period(s), and/or payment date(s) or
method(s) of calculation thereof applicable to such Preferred
Stock;
(4) Whether such Preferred Stock is cumulative or not and, if
cumulative, the date from which dividends on such Preferred
Stock shall accumulate;
(5) The provision for a sinking fund, if any, for such Preferred
Stock;
(6) The provision for redemption, if applicable, of such Preferred
Stock;
(7) Any listing of such Preferred Stock on any securities
exchange;
(8) The terms and conditions, if applicable, upon which such
Preferred Stock will be converted into Common Stock of the
Company, including the conversion price (or manner of
calculation thereof);
(9) A discussion of any material federal income tax considerations
applicable to such Preferred Stock;
(10) Any limitations on actual and constructive ownership and
restrictions on transfer, in each case as may be appropriate
to preserve the status of the Company as a REIT;
(11) The relative ranking and preferences of such Preferred Stock
as to dividend rights and rights upon liquidation, dissolution
or winding up of the affairs of the Company;
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(12) Any limitations on issuance of any class or series of
preferred stock ranking senior to or on a parity with such
class or series of Preferred Stock as to dividend rights and
rights upon liquidation, dissolution or winding up of the
affairs of the Company;
(13) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Stock; and
(14) Any voting rights of such Preferred Stock.
RANK
Unless otherwise specified in the applicable Prospectus Supplement, the
Preferred Stock will, with respect to dividend rights and rights upon
liquidation, dissolution or winding up of the Company, rank (i) senior to all
classes or series of common stock of the Company, and to all equity securities
ranking junior to such Preferred Stock with respect to dividend rights and
rights upon liquidation, dissolution or winding up of the Company; (ii) on a
parity with all equity securities issued by the Company the terms of which
specifically provide that such equity securities rank on a parity with the
Preferred Stock with respect to dividends rights or rights upon liquidation,
dissolution or winding up of the Company; and (iii) junior to all equity
securities issued by the Company the terms of which specifically provide that
such equity securities rank senior to the Preferred Stock with respect to
dividend rights or rights upon liquidation, dissolution or winding up of the
Company. For these purposes, the term "equity securities" does not include
convertible debt securities.
DIVIDENDS
Holders of shares of the Preferred Stock of each series or class shall
be entitled to receive, when, as and if authorized and declared by the Company's
Board of Directors, out of the Company's assets legally available for payment,
cash dividends at such rates and on such dates as will be set forth in the
applicable Prospectus Supplement. Each such dividend shall be payable to holders
of record as they appear on the Company's stock transfer books on such record
dates as shall be fixed by the Company's Board of Directors.
Dividends on any series or class of Preferred Stock may be cumulative
or noncumulative, as provided in the applicable Prospectus Supplement.
Dividends, if cumulative, will be cumulative from and after the date set forth
in the applicable Prospectus Supplement. If the Company's Board of Directors
fails to authorize a dividend payable on a dividend payment date on any series
or class of Preferred Stock for which dividends are noncumulative, then the
holders of such series or class of Preferred Stock will have no right to receive
a dividend in respect of the dividend period ending on such dividend payment
date, and the Company will have no obligation to pay the dividend accrued for
such period, whether or not dividends on such series or class are declared or
paid for any future period.
If any shares of Preferred Stock of any series or class are
outstanding, no full dividends shall be authorized or paid or set apart for
payment on the Preferred Stock of any other series or class ranking, as to
dividends, on a parity with or junior to the Preferred Stock of such series or
class for any period unless (a) if such series or class of Preferred Stock has a
cumulative dividend, then full cumulative dividends have been or
contemporaneously are authorized and paid or authorized and a sum sufficient for
the payment thereof is set apart for such payment on the Preferred Stock of such
series or class for all past dividend periods and the then current dividend
period or (b) if such series or class of Preferred Stock does not have a
cumulative dividend, then full dividends for the then current dividend period
have been or contemporaneously are authorized and paid or authorized and a sum
sufficient for the payment thereof is set apart for such payment on the
Preferred Stock of such series or class. When dividends are not paid in full (or
a sum sufficient for such full payment is not so set apart) upon the shares of
Preferred Stock of any series or class and the shares of any other series or
class of Preferred Stock ranking on a parity as to dividends with the Preferred
Stock of such series or class, then all dividends authorized on shares of
Preferred Stock of such series or class and any other series or class of
Preferred Stock ranking on a parity as to dividends with such Preferred Stock
shall be authorized pro rata so that the amount of dividends authorized per
share on the Preferred Stock of such series or class and such other series or
class of Preferred Stock shall in all cases bear to each other the same
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ratio that accrued dividends per share on the shares of Preferred Stock of such
series or class (which shall not include any accumulation in respect of unpaid
dividends for prior dividend periods if such Preferred Stock does not have a
cumulative dividend) and such other series or class of Preferred Stock bear to
each other. No interest, or sum of money in lieu of interest, shall be payable
in respect of any dividend payment or payments on Preferred Stock of such series
or class that may be in arrears.
Except as provided in the immediately preceding paragraph, unless (a)
if such series or class of Preferred Stock has a cumulative dividend, full
cumulative dividends on the Preferred Stock of such series or class have been or
contemporaneously are authorized and paid or authorized and a sum sufficient for
the payment thereof is set apart for payment for all past dividend periods and
the then current dividend period and (b) if such series or class of Preferred
Stock does not have a cumulative dividend, full dividends on the Preferred Stock
of such series or class have been or contemporaneously are authorized and paid
or authorized and a sum sufficient for the payment thereof is set apart for
payment for the then current dividend period, then no dividends (other than in
the Common Stock or other stock of the Company ranking junior to the Preferred
Stock of such series or class as to dividends and upon liquidation) shall be
authorized or paid or set aside for payment nor shall any other distribution be
authorized or made on the Common Stock or any other stock of the Company ranking
junior to or on a parity with the Preferred Stock of such series or class as to
dividends or upon liquidation, nor shall the Common Stock or any other stock of
the Company ranking junior to or on a parity with the Preferred Stock of such
series or class as to dividends or upon liquidation be redeemed, purchased or
otherwise acquired for any consideration (or any amounts be paid to or made
available for a sinking fund for the redemption of any shares of any such stock)
by the Company (except by conversion into or exchange for other stock of the
Company ranking junior to the Preferred Stock of such series or class as to
dividends and upon liquidation).
Any dividend payment made on shares of a series or class of Preferred
Stock shall first be credited against the earliest accrued but unpaid dividend
due with respect to shares of such series or class that remains payable.
REDEMPTION
If so provided in the applicable Prospectus Supplement, the shares of
Preferred Stock will be subject to mandatory redemption or redemption at the
Company's option, as a whole or in part, in each case on the terms, at the times
and at the redemption prices set forth in such Prospectus Supplement.
The Prospectus Supplement relating to a series or class of Preferred
Stock that is subject to mandatory redemption will specify the number of shares
of such Preferred Stock that shall be redeemed by the Company in each year
commencing after a date to be specified, at a redemption price per share to be
specified, together with an amount equal to all accumulated and unpaid dividends
thereon (which shall not, if such Preferred Stock does not have a cumulative
dividend, include any accumulation in respect of unpaid dividends for prior
dividend periods) to the date of redemption. The redemption price may be payable
in cash or other property, as specified in the applicable Prospectus Supplement.
If the redemption price for Preferred Stock of any series or class is payable
only from the net proceeds of the issuance of stock of the Company, the terms of
such Preferred Stock may provide that, if no such stock shall have been issued
or to the extent the net proceeds from any issuance are insufficient to pay in
full the aggregate redemption price then due, such Preferred Stock shall
automatically and mandatorily be converted into shares of the applicable stock
of the Company pursuant to conversion provisions specified in the applicable
Prospectus Supplement.
Notwithstanding the foregoing, unless (a) if such series or class of
Preferred Stock has a cumulative dividend, full cumulative dividends on all
shares of such series or class of Preferred Stock have been or contemporaneously
are authorized and paid or authorized and a sum sufficient for the payment
thereof is set apart for payment for all past dividend periods and the then
current dividend period and (b) if such series or class of Preferred Stock does
not have a cumulative dividend, full dividends on the Preferred Stock of such
series or class have been or contemporaneously are authorized and paid or
authorized and a sum sufficient for the payment thereof is set apart for payment
for the then current dividend period, then no shares of such series or class of
Preferred Stock shall be redeemed unless all outstanding shares of Preferred
Stock of such series or class are simultaneously redeemed; provided, however,
that the foregoing shall not prevent the purchase or acquisition of shares of
Preferred Stock of such series or class to preserve the Company's REIT status or
pursuant to a purchase or exchange offer
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made on the same terms to holders of all outstanding shares of Preferred Stock
of such series or class. In addition, unless (i) if such series or class of
Preferred Stock has a cumulative dividend, full cumulative dividends on all
outstanding shares of such series or class of Preferred Stock have been or
contemporaneously are authorized and paid or authorized and a sum sufficient for
the payment thereof is set apart for payment for all past dividend periods and
the then current dividend period and (ii) if such series or class of Preferred
Stock does not have a cumulative dividend, full dividends on the Preferred Stock
of such series or class have been or contemporaneously are authorized and paid
or authorized and a sum sufficient for the payment thereof is set apart for
payment for the then current dividend period, the Company shall not purchase or
otherwise acquire directly or indirectly any shares of Preferred Stock of such
series or class (then except by conversion into or exchange for stock of the
Company ranking junior to the Preferred Stock of such series or class as to
dividends and upon liquidation); provided, however, that the foregoing shall not
prevent the purchase or acquisition of shares of Preferred Stock of such series
or class to preserve the Company's REIT status or pursuant to a purchase or
exchange offer made on the same terms to holders of all outstanding shares of
Preferred Stock of such series or class.
If fewer than all the outstanding shares of Preferred Stock of any
series or class are to be redeemed, the number of shares to be redeemed will be
determined by the Company and such shares may be redeemed pro rata from the
holders of record of such shares in proportion to the number of such shares held
by such holders (with adjustments to avoid redemption of fractional shares) or
any other equitable method determined by the Company.
Notice of redemption will be mailed at least 30, but not more than 60,
days before the redemption date to each holder of record of a share of Preferred
Stock of any series or class to be redeemed at the address shown on the
Company's stock transfer books. Each notice shall state: (a) the redemption
date; (b) the number of shares and series or class of the Preferred Stock to be
redeemed; (c) the redemption price; (d) the place or places where certificates
for such Preferred Stock are to be surrendered for payment of the redemption
price; (e) that dividends on the shares to be redeemed will cease to accumulate
on such redemption date; and (f) the date on which the holder's conversion
rights, if any, as to such shares shall terminate. If fewer than all the shares
of Preferred Stock of any series or class are to be redeemed, the notice mailed
to each such holder thereof shall also specify the number of shares of Preferred
Stock to be redeemed from each such holder and, upon redemption, a new
certificate shall be issued representing the unredeemed shares without cost to
the holder thereof. If notice of redemption of any shares of Preferred Stock has
been given and if the funds necessary for such redemption have been set aside by
the Company in trust for the benefit of the holders of any shares of Preferred
Stock so called for redemption, then from and after the redemption date
dividends will cease to accrue on such shares of Preferred Stock, such shares of
Preferred Stock shall no longer be deemed outstanding and all rights of the
holders of such shares will terminate, except the right to receive the
redemption price. In order to facilitate the redemption of shares of Preferred
Stock of any series or class, the Board of Directors may fix a record date for
the determination of shares of such series or class of Preferred Stock to be
redeemed.
Subject to applicable law and the limitation on purchases when
dividends on a series or class of Preferred Stock are in arrears, the Company
may, at any time and from time to time, purchase any shares of such series or
class of Preferred Stock in the open market, by tender or by private agreement.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Company, then, before any distribution or payment shall
be made to the holders of the Common Stock or any other series or class of stock
of the Company ranking junior to any series or class of the Preferred Stock in
the distribution of assets upon any liquidation, dissolution or winding up of
the affairs of the Company, the holders of such series or class of Preferred
Stock shall be entitled to receive out of assets of the Company legally
available for distribution to shareholders liquidating distributions in the
amount of the liquidation preference per share (set forth in the applicable
Prospectus Supplement), plus an amount equal to all dividends accrued and unpaid
thereon (which shall not include any accumulation in respect of unpaid dividends
for prior dividend periods if such Preferred Stock does not have a cumulative
dividend). After payment of the full amount of the liquidating distributions to
which they are entitled, the holders of Preferred Stock will have no right or
claim to any of the remaining assets of the Company. If, upon any such voluntary
or involuntary liquidation, dissolution or winding up, the legally available
assets of the
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Company are insufficient to pay the amount of the liquidating distributions on
all outstanding shares of any series or class of Preferred Stock and the
corresponding amounts payable on all shares of other classes or series of stock
of the Company ranking on a parity with such series or class of Preferred Stock
in the distribution of assets upon liquidation, dissolution or winding up, then
the holders of such series or class of Preferred Stock and all other such
classes or series of capital stock shall share ratably in any such distribution
of assets in proportion to the full liquidating distributions to which they
would otherwise be respectively entitled.
If liquidating distributions shall have been made in full to all
holders of any series or class of Preferred Stock, the remaining assets of the
Company shall be distributed among the holders of any other classes or series of
stock ranking junior to such series or class of Preferred Stock upon
liquidation, dissolution or winding up, according to their respective rights and
preferences and in each case according to their respective number of shares. For
such purposes, the consolidation or merger of the Company with or into any other
entity, or the sale, lease, transfer or conveyance of all or substantially all
of the Company's property or business, shall not be deemed to constitute a
liquidation, dissolution or winding up of the affairs of the Company.
VOTING RIGHTS
Holders of the Preferred Stock will not have any voting rights, except
as set forth below or as otherwise from time to time required by law or as
indicated in the applicable Prospectus Supplement.
Unless provided otherwise for any series or class of Preferred Stock,
so long as any shares of Preferred Stock of a series or class remain
outstanding, the Company shall not, without the affirmative vote or consent of
the holders of at least a majority of the shares of such series or class of
Preferred Stock outstanding at the time, given in person or by proxy, either in
writing or at a meeting (such series or class voting separately as a class), (a)
authorize or create, or increase the authorized or issued amount of, any class
or series of stock ranking prior to such series or class of Preferred Stock with
respect to payment of dividends or the distribution of assets upon liquidation,
dissolution or winding up or reclassify any authorized stock of the Company into
any such shares, or create, authorize or issue any obligation or security
convertible into or evidencing the right to purchase any such shares; or (b)
amend, alter or repeal the provisions of the Charter or the Articles
Supplementary for such series or class of Preferred Stock, whether by merger,
consolidation or otherwise, so as to materially and adversely affect any right,
preference, privilege or voting power of such series or class of Preferred Stock
or the holders thereof; provided, however, that any increase in the amount of
the authorized Preferred Stock or the creation or issuance of any other series
or class of Preferred Stock, or any increase in the amount of authorized shares
of such series or class or any other series or class of Preferred Stock, in each
case ranking on a parity with or junior to the Preferred Stock of such series or
class with respect to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding up, shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting powers.
The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of such series or class of Preferred
Stock shall have been redeemed or called for redemption upon proper notice and
sufficient funds shall have been deposited in trust to effect such redemption.
CONVERSION RIGHTS
The terms and conditions, if any, upon which any shares of any class or
series of Preferred Stock are convertible into Common Stock will be set forth in
the applicable Prospectus Supplement relating thereto. Such terms will include
the number of shares of Common Stock into which the shares of Preferred Stock
are convertible, the conversion price (or manner of calculation thereof), the
conversion period, provisions as to whether conversion will be at the option of
the holders of such class or series of Preferred Stock or the Company, the
events requiring an adjustment of the conversion price and provisions affecting
conversion in the event of the redemption of such class or series of Preferred
Stock.
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RESTRICTIONS ON OWNERSHIP
For the Company to qualify as a REIT under the Code, subject to certain
exceptions, no more than 50% in value of the Company's outstanding shares of
stock may be owned, actually or constructively, by five or fewer individuals
(defined in the Code to include certain entities) during the last half of a
taxable year. To assist the Company in meeting this requirement and certain
other requirements relating to its tax status as a REIT, the Company may take
certain actions to limit the actual, beneficial or constructive ownership by a
single person or entity of the Company's outstanding equity securities. See
"Restrictions on Ownership and Transfer of Capital Stock."
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for any series or class of Preferred
Stock will be set forth in the applicable Prospectus Supplement.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
The Company may issue Depositary Shares, each of which will represent a
fractional interest of a share of a particular class or series of Preferred
Stock, as specified in the applicable Prospectus Supplement. Shares of a class
or series of Preferred Stock represented by Depositary Shares will be deposited
under a separate Deposit Agreement (each, a "Deposit Agreement") among the
Company, the depositary named therein (the "Preferred Stock Depositary") and the
holders from time to time of the depositary receipts issued by the Preferred
Stock Depositary which will evidence the Depositary Shares ("Depositary
Receipts"). Subject to the terms of the Deposit Agreement, each owner of a
Depositary Receipt will be entitled, in proportion to the fractional interest of
a share of a particular class or series of Preferred Stock represented by the
Depositary Shares evidenced by such Depositary Receipt, to all the rights and
preferences of the class or series of the Preferred Stock represented by such
Depositary Shares (including dividend, voting, conversion, redemption and
liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the applicable Deposit Agreement. Immediately following the issuance
and delivery of the Preferred Stock by the Company to a Preferred Stock
Depositary, the Company will cause such Preferred Stock Depositary to issue, on
behalf of the Company, the Depositary Receipts. Copies of the applicable form of
Deposit Agreement and Depositary Receipt may be obtained from the Company upon
request, and the statements made hereunder relating to the Deposit Agreement and
the Depositary Receipt to be issued thereunder are summaries of certain
anticipated provisions thereof and do not purport to be complete and are subject
to, and qualified in their entirety by reference to, all of the provisions of
the applicable Deposit Agreement and related Depositary Receipts.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or
other cash distributions received in respect of a class or series of Preferred
Stock to the record holders of Depositary Receipts evidencing the related
Depositary Shares in proportion to the number of such Depositary Receipts owned
by such holders, subject to certain obligations of holders to file proofs,
certificates and other information and to pay certain charges and expenses to
such Preferred Stock Depositary.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Receipts entitled thereto, subject to certain obligations of holders
to file proofs, certificates and other information and to pay certain charges
and expenses to the Preferred Stock Depositary, unless such Preferred Stock
Depositary determines that it is not feasible to make such distribution, in
which case the Preferred Stock Depositary may, with the approval of the Company,
sell such property and distribute the net proceeds from such sale to such
holders.
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No distribution will be made in respect of any Depositary Share to the
extent that it represents any class or series of Preferred Stock converted into
shares in excess of the Ownership Limit or otherwise converted or exchanged.
WITHDRAWAL OF STOCK
Upon surrender of the Depositary Receipts at the corporate trust office
of the Preferred Stock Depositary (unless the related Depositary Shares have
previously been called for redemption or converted or converted into Excess
Shares or otherwise), the holders thereof will be entitled to delivery at such
office, to or upon each such holder's order, of the number of whole or
fractional shares of the class or series of Preferred Stock and any money or
other property represented by the Depositary Shares evidenced by such Depositary
Receipts. Holders of Depositary Receipts will be entitled to receive whole or
fractional shares of the related class or series of Preferred Stock on the basis
of the proportion of Preferred Stock represented by each Depositary Share as
specified in the applicable Prospectus Supplement, but holders of such shares of
Preferred Stock will not thereafter be entitled to receive Depositary Shares
therefor. If the Depositary Receipts delivered by the holder evidence a number
of Depositary Shares in excess of the number of Depositary Shares representing
the number of shares of Preferred Stock to be withdrawn, the Preferred Stock
Depositary will deliver to such holder at the same time a new Depositary
Receipt evidencing such excess number of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
Whenever the Company redeems shares of Preferred Stock held by the
Preferred Stock Depositary, the Preferred Stock Depositary will redeem as of the
same redemption date the number of the Depositary Shares representing shares of
such class or series of Preferred Stock so redeemed, provided the Company shall
have paid in full to the Preferred Stock Depositary the redemption price of the
Preferred Stock to be redeemed plus an amount equal to any accrued and unpaid
dividends thereon to the date fixed for redemption. The redemption price per
Depositary Share will be equal to the corresponding portion of the redemption
price and any other amounts per share payable with respect to such class or
series of Preferred Stock. If fewer than all the Depositary Shares are to be
redeemed, the Depositary Shares to be redeemed will be selected pro rata (as
nearly as may be practicable without creating fractional Depositary Shares) or
by any other equitable method determined by the Company that will not result in
the issuance of any Excess Shares.
From and after the date fixed for redemption, all dividends in respect
of the shares of a class or series of Preferred Stock so called for redemption
will cease to accrue, the Depositary Shares so called for redemption will no
longer be deemed to be outstanding and all rights of the holders of the
Depositary Receipts evidencing the Depositary Shares so called for redemption
will cease, except the right to receive any moneys payable upon such redemption
and any money or other property to which the holders of such Depositary Receipts
were entitled upon such redemption upon surrender thereof to the Preferred Stock
Depositary.
VOTING OF THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of a class
or series of Preferred Stock deposited with the Preferred Stock Depositary are
entitled to vote, the Preferred Stock Depositary will mail the information
contained in such notice of meeting to the record holders of the Depositary
Receipts evidencing the Depositary Shares which represent such class or series
of Preferred Stock. Each record holder of Depositary Receipts evidencing
Depositary Shares on the record date (which will be the same date as the record
date for such class or series of Preferred Stock) will be entitled to instruct
the Preferred Stock Depositary as to the exercise of the voting rights
pertaining to the amount of Preferred Stock represented by such holder's
Depositary Shares. The Preferred Stock Depositary will vote the amount of such
class or series of Preferred Stock represented by such Depositary Shares in
accordance with such instructions, and the Company will agree to take all
reasonable action which may be deemed necessary by the Preferred Stock
Depositary in order to enable the Preferred Stock Depositary to do so. The
Preferred Stock Depositary will abstain from voting the amount of Preferred
Stock represented by such Depositary Shares to the extent it does not receive
specific instructions from the holders of Depositary Receipts evidencing such
Depositary Shares. The Preferred Stock Depositary will not be responsible for
any failure to carry
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out any instruction to vote, or for the manner or effect of any such vote made,
as long as any such action or non-action is in good faith and does not result
from negligence or willful misconduct of the Preferred Stock Depositary.
LIQUIDATION PREFERENCE
In the event of the liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary, the holders of each Depositary
Receipt will be entitled to the fraction of the liquidation preference accorded
each such share of Preferred Stock represented by the Depositary Share evidenced
by such Depositary Receipt as set forth in the applicable Prospectus Supplement.
CONVERSION OF PREFERRED STOCK
The Depositary Shares, as such, will not be convertible into Common
Stock or any other securities or property of the Company, except in connection
with certain exchanges in connection with the preservation of the Company's
status as a REIT. See "Description of Common Stock -- Restrictions on
Ownership." Nevertheless, if so specified in the applicable Prospectus
Supplement relating to an offering of Depositary Shares, the Depositary Receipts
may be surrendered by holders thereof to the applicable Preferred Stock
Depositary with written instructions to the Preferred Stock Depositary to
instruct the Company to cause conversion of a class or series of Preferred Stock
represented by the Depositary Shares evidenced by such Depositary Receipts into
whole shares of Common Stock, other shares of a class or series of Preferred
Stock (including Excess Shares) of the Company or other shares of stock, and the
Company has agreed that upon receipt of such instructions and any amounts
payable in respect thereof, it will cause the conversion thereof utilizing the
same procedures as those provided for delivery of Preferred Stock to effect such
conversion. If the Depositary Shares evidenced by a Depositary Receipt are to be
converted in part only, a Depositary Receipt or Receipts will be issued for any
Depositary Shares not to be converted. No fractional shares of Common Stock will
be issued upon conversion, and if such conversion will result in a fractional
share being issued, an amount will be paid in cash by the Company equal to the
value of the fractional interest based upon the closing price of the Common
Stock on the last business day prior to the conversion.
AMENDMENT AND TERMINATION OF A DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing Depositary Shares which
represent the Preferred Stock and any provision of the Deposit Agreement may at
any time be amended by agreement between the Company and the Preferred Stock
Depositary. However, any amendment that materially and adversely alters the
rights of the holders of Depositary Receipts or that would be materially or
adversely inconsistent with the rights granted to the holders of the related
Preferred Stock will not be effective unless such amendment has been approved by
the existing holders of at least two-thirds of the applicable Depositary Shares
evidenced by the applicable Depositary Receipts then outstanding. No amendment
shall impair the right, subject to certain anticipated exceptions in the Deposit
Agreements, of any holder of Depositary Receipts to surrender any Depositary
Receipt with instructions to deliver to the holder the related class or series
of Preferred Stock and all money and other property, if any, represented
thereby, except in order to comply with law. Every holder of an outstanding
Depositary Receipt at the time any such amendment becomes effective shall be
deemed, by continuing to hold such Depositary Receipt, to consent and agree to
such amendment and to be bound by the applicable Deposit Agreement as amended
thereby.
The Deposit Agreement may be terminated by the Company upon not less
than 30 days' prior written notice to the Preferred Stock Depositary if (i) such
termination is necessary to preserve the Company's status as a REIT or (ii) a
majority of each class or series of Preferred Stock subject to such Deposit
Agreement consents to such termination, whereupon the Preferred Stock Depositary
will deliver or make available to each holder of Depositary Receipts, upon
surrender of the Depositary Receipts held by such holder, such number of whole
or fractional shares of each Preferred Stock as are represented by the
Depositary Shares evidenced by such Depositary Receipts together with any other
property held by Preferred Stock Depositary with respect to such Depositary
Receipts. The Company has agreed that if the Deposit Agreement is terminated to
preserve the Company's status as a REIT, then the Company will use its best
efforts to list each class or series of Preferred Stock issued upon surrender of
the related Depositary Shares. In addition, the Deposit Agreement will
automatically terminate if (i) all outstanding Depositary Shares shall have been
redeemed, (ii) there shall have been a final distribution in respect of each
class or
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series of Preferred Stock in connection with any liquidation, dissolution or
winding up of the Company and such distribution shall have been distributed to
the holders of the Depositary Receipts evidencing the Depositary Shares
representing such class or series of Preferred Stock or (iii) each share of the
related Preferred Stock shall have been converted into stock of the Company not
so represented by Depositary Shares.
CHARGES OF A PREFERRED STOCK DEPOSITARY
The Company will pay all transfer and other taxes and governmental
charges arising solely from the existence of the Deposit Agreement. In addition,
the Company will pay the fees and expenses of the Preferred Stock Depositary in
connection with the performance of its duties under the Deposit Agreement.
However, holders of Depositary Receipts will pay the fees and expenses of the
Preferred Stock Depositary for any duties requested by such holders to be
performed which are outside of those expressly provided for in the Deposit
Agreement.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Preferred Stock Depositary may resign at any time by delivering to
the Company notice of its election to do so, and the Company may at any time
remove the Preferred Stock Depositary, any such resignation or removal to take
effect upon the appointment of a successor Preferred Stock Depositary. A
successor Preferred Stock Depositary must be appointed within 60 days after
delivery of the notice of resignation or removal and must be a bank or trust
company having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000.
MISCELLANEOUS
The Preferred Stock Depositary will forward to holders of Depositary
Receipts any reports and communications from the Company which are received by
the Preferred Stock Depositary with respect to the related Preferred Stock.
Neither the Preferred Stock Depositary nor the Company will be liable
if it is prevented from or delayed in, by law or any circumstances beyond its
control, performing its obligations under the Deposit Agreement. the obligations
of the Company and the Preferred Stock Depositary under the Deposit Agreement
will be limited to performing their duties thereunder in good faith and without
negligence (in the case of any action or inaction in the voting of a class or
series of Preferred Stock represented by the Depositary Shares), gross
negligence or willful misconduct, and the Company and the Preferred Stock
Depositary will not be obligated to prosecute or defend any legal proceeding in
respect of any Depositary Receipts, Depositary Shares or shares of a class or
series of Preferred Stock represented thereby unless satisfactory indemnity is
furnished. The Company and the Preferred Stock Depositary may rely on written
advice of counsel or accountants, or information provided by persons presenting
shares of Preferred Stock represented thereby for deposit, holders of Depositary
Receipts or other persons believed in good faith to be competent to give such
information, and on documents believed in good faith to be genuine and signed by
a proper party.
In the event a Preferred Stock Depositary shall receive conflicting
claims, requests or instructions from any holders of Depositary Receipts, on the
one hand, and the Company, on the other hand, the Preferred Stock Depositary
shall be entitled to act on such claims, requests or instructions received by
the Company.
DESCRIPTION OF WARRANTS
The Company currently has no Warrants outstanding (other than options
issued under the Company's stock option plan). The Company may issue Warrants
for the purchase of Common Stock or Preferred Stock. Warrants may be issued
independently or together with any other Offered Securities offered by any
Prospectus Supplement and may be attached to or separate from such Offered
Securities. Each series of Warrants will be issued under a separate warrant
agreement (each, a "Warrant Agreement") to be entered into between the Company
and a warrant agent specified in the applicable Prospectus Supplement (the
"Warrant Agent"). The Warrant Agent will act solely as an agent of the Company
in connection with the Warrants of such series and will not assume any
obligation or
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relationship of agency or trust for or with any provisions of the Warrants
offered hereby. Further terms of the Warrants and the applicable Warrant
Agreements will be set forth in the applicable Prospectus Supplement.
The applicable Prospectus Supplement will describe the terms of the
Warrants in respect of which this Prospectus is being delivered, including,
where applicable, the following: (1) the title of such Warrants; (2) the
aggregate number of such Warrants; (3) the price or prices at which such
Warrants will be issued; (4) the designation, terms and number of shares of
Preferred Stock or Common Stock purchasable upon exercise of such Warrants; (5)
the designation and terms of the Offered Securities, if any, with which such
Warrants are issued and the number of such Warrants issued with each such
Offered Security; (6) the date, if any, on and after which such Warrants and the
related Preferred Stock or Common Stock will be separately transferable,
including any limitations on ownership and transfer of such warrants as may be
appropriate to preserve the status of the Company as a REIT; (7) the price at
which each share of Preferred Stock or Common Stock purchasable upon exercise of
such Warrants may be purchased; (8) the date on which the right to exercise such
Warrants shall commence and the date on which such right shall expire; (9) the
minimum or maximum amount of such Warrants which may be exercised at any one
time; (10) information with respect to book-entry procedures, if any; (11) a
discussion of certain federal income tax considerations; and (12) any other
terms of such Warrants, including terms, procedures and limitations relating to
the exchange and exercise of such Warrants.
RESTRICTIONS ON OWNERSHIP AND TRANSFER OF CAPITAL STOCK
For the Company to qualify as a REIT under the Code, subject to certain
exceptions, no more than 50% in value of the Company's outstanding shares of
stock may be owned, actually or constructively, by five or fewer individuals (as
defined in the Code to include certain entities) during the last half of a
taxable year (other than the first year for which an election to be treated as a
REIT has been made). In addition, if the Company, or an owner of 10% or more of
the Company, actually or constructively owns 10% or more of a tenant of the
Company (or a tenant of any partnership in which the Company is a partner), the
rent received by the Company (either directly or through any such partnership)
from such tenant will not be qualifying income for purposes of the REIT gross
income tests of the Code. A REIT's stock must also be beneficially owned by 100
or more persons during at least 335 days of a taxable year of twelve months or
during a proportionate part of a shorter taxable year (other than the first year
for which an election to be treated as a REIT has been made).
The Charter prohibits (i) any person from actually or constructively
owning shares of stock of the Company that would result in the Company being
"closely held" under Section 856(h) of the Code or otherwise cause the Company
to fail to qualify as a REIT, and (ii) any person from transferring shares of
stock of the Company if such transfer would result in shares of stock of the
Company being owned by fewer than 100 persons. The Charter contains restrictions
on the ownership and transfer of Common Stock which are intended to assist the
Company in enforcing these prohibitions. The ownership limit set forth in the
Charter (the "Ownership Limit") provides that, subject to certain specified
exceptions, no person or entity may own, or be deemed to own by virtue of the
applicable constructive ownership provisions of the Code, more than 6.25% (by
number or value, whichever is more restrictive) of the outstanding shares of
Common Stock. The constructive ownership rules of the Code are complex, and may
cause shares of Common Stock owned actually or constructively by a group of
related individuals and/or entities to be constructively owned by one individual
or entity. As a result, the acquisition of less than 6.25% of the shares of
Common Stock (or the acquisition of an interest in an entity, such as Revenue
Properties Company Limited ("Revenue Properties") or Acktion Corporation that
owns, actually or constructively, Common Stock) by an individual or entity,
could, nevertheless cause that individual or entity, or another individual or
entity, to own constructively in excess of 6.25% of the outstanding Common Stock
and thus violate the Ownership Limit, or such other limit as provided in the
Charter or as otherwise permitted by the Board of Directors. For example, an
increase in the proportionate ownership interest in Revenue Properties held by
Mark Tanz, Stuart Tanz or any other Tanz family members (collectively, the "Tanz
Family"), or some other individual or entity, could cause one or more members of
the Tanz Family or such other individual or entity to violate the Ownership
Limit, or such other limit as provided in the Charter or as otherwise permitted
by the Board of Directors. The Board of Directors may, but in no event will be
required to, waive the Ownership Limit with respect to a particular stockholder
if it determines that such ownership will not jeopardize the Company's status as
a REIT and the Board of Directors otherwise decides
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such action would be in the best interest of the Company. As a condition of such
waiver, the Board of Directors may require an opinion of counsel satisfactory to
it and/or undertakings or representations from the applicant with respect to
preserving the REIT status of the Company. The Board of Directors has obtained
such undertakings and representations from PPD and, as a result, has waived the
Ownership Limit with respect to PPD and its affiliates and has permitted PPD to
own up to 55.0% of the outstanding Common Stock (the "PPD Ownership Limit").
The Board of Directors has also obtained such undertakings and representations
from the Tanz Family and, as a result, has waived the Ownership Limit with
respect to the Tanz Family and has permitted the Tanz Family to own, in the
aggregate, actually or constructively (including through the ownership of stock
of PPD or Revenue Properties), up to 24.0% (by number of shares or value,
whichever is more restrictive) of the outstanding Common Stock (the "Tanz Family
Ownership Limit"). Further, the Board of Directors has waived the Ownership
Limit with respect to Acktion Corporation and certain entities affiliated with
such corporation, and has permitted such entity to actually or constructively
own up to 10.5% (by number of shares or value, whichever is more restrictive) of
the outstanding Common Stock (the "Acktion Ownership Limit").
Any person who acquires or attempts or intends to acquire actual or
constructive ownership of shares of stock of the Company (including by acquiring
shares of PPD or Revenue Properties) that will or may violate any of the
foregoing restrictions on transferability and ownership is required to give
notice immediately to the Company and provide the Company with such other
information as the Company may request in order to determine the effect of such
transfer on the Company's status as a REIT. The foregoing restrictions on
transferability and ownership will not apply if the Board of Directors
determines that it is no longer in the best interest of the Company to attempt
to qualify, or to continue to qualify, as a REIT. Except as otherwise described
above, any change in the Ownership Limit would require an amendment to the
Charter. Amendments to the Charter require the affirmative vote of a majority of
all votes entitled to be cast on that matter.
Pursuant to the Charter, if any purported transfer of Common Stock of
the Company or any other event would otherwise result in any person violating
the Ownership Limit or such other limit as provided in the Charter or as
otherwise permitted by the Board of Directors (including, but not limited to,
the PPD Ownership Limit, the Tanz Family Ownership Limit and the Acktion
Ownership Limit), then any such purported transfer will be void and of no force
or effect with respect to the purported transferee (the "Prohibited Transferee")
as to that number of shares in excess of the Ownership Limit or such other limit
(the "Excess Shares"), and the Prohibited Transferee shall acquire no right or
interest (or, in the case of any event other than a purported transfer, the
person or entity holding record title to any such Excess Shares (the "Prohibited
Owner") shall cease to own any right or interest) in such Excess Shares.
Furthermore, an acquisition or increase in the actual or constructive ownership
of stock in Revenue Properties, PPD or Acktion Corporation by one or more
members of the Tanz Family, or some other individual or entity, or the actual or
constructive acquisition by PPD or Acktion Corporation of additional shares of
Common Stock, could result in the disqualification of the Company as a REIT (the
"Violative Indirect Transfer"). In such circumstances, pursuant to the Charter,
the Company will treat PPD or Acktion Corporation, as applicable, as a
Prohibited Owner with respect to the number of shares (the "Excess PPD Shares")
of Common Stock owned by it which, if divested, would permit the Company to
continue to maintain its REIT status. Any such Excess Shares or Excess PPD
Shares described above will be transferred automatically, by operation of law,
to a trust, the beneficiary of which will be a qualified charitable organization
selected by the Company (the "Beneficiary"). Such automatic transfer shall be
deemed to be effective as of the close of business on the business day prior to
the date of such violative transfer (including any Violative Indirect Transfer).
Within 20 days of receiving notice from the Company of the transfer of shares to
the trust, the trustee of the trust (who shall be designated by the Company and
be unaffiliated with the Company and any Prohibited Transferee or Prohibited
Owner) will be required to sell such Excess Shares to a person or entity who
could own such shares without violating the Ownership Limit, or such other limit
as provided in the Charter or as otherwise permitted by the Board of Directors,
and distribute to the Prohibited Transferee or Prohibited Owner an amount equal
to the lesser of the price paid by the Prohibited Transferee or Prohibited Owner
for such Excess Shares or the sales proceeds received by the trust for such
Excess Shares. In the case of any Excess Shares resulting from any event other
than a transfer (such as a Violative Indirect Transfer), or from a transfer for
no consideration (such as a gift), the trustee will be required to sell such
Excess Shares (or Excess PPD Shares) to a qualified person or entity and
distribute to the Prohibited Owner an amount equal to the lesser of the fair
market value (as defined in the Charter) of such Excess Shares (or Excess PPD
Shares) as of the date of such event (including the date of a Violative Indirect
Transfer) or the sales proceeds received by the trust for
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such Excess Shares (or Excess PPD Shares). In either case, any proceeds in
excess of the amount distributable to the Prohibited Transferee or Prohibited
Owner, as applicable, will be distributed to the Beneficiary. Prior to a sale of
any such Excess Shares (or Excess PPD Shares) by the trust, the trustee will be
entitled to receive, in trust for the Beneficiary, all dividends and other
distributions paid by the Company with respect to such Excess Shares (or Excess
PPD Shares), and also will be entitled to exercise all voting rights with
respect to such Excess Shares (or Excess PPD Shares). Subject to Maryland law,
effective as of the date that such shares have been transferred to the trust,
the trustee shall have the authority (at the trustee's sole discretion) (i) to
rescind as void any vote cast by a Prohibited Transferee or Prohibited Owner, as
applicable, prior to the discovery by the Company that such shares have been
transferred to the trust and (ii) to recast such vote in accordance with the
desires of the trustee acting for the benefit of the Beneficiary. However, if
the Company has already taken irreversible corporate action, then the trustee
shall not have the authority to rescind and recast such vote. Any dividend or
other distribution paid to the Prohibited Transferee or Prohibited Owner (prior
to the discovery by the Company that such shares had been automatically
transferred to a trust as described above) will be required to be repaid to the
trustee upon demand for distribution to the Beneficiary. In the event that the
transfer to the trust as described above is not automatically effective (for any
reason) to prevent violation of the Ownership Limit or such other limit as
provided in the Charter or as otherwise permitted by the Board of Directors,
then the Charter provides that the transfer of the Excess Shares will be void
or, in the case of a Violative Indirect Transfer, the Excess PPD Shares will be
redeemable by the Company at its sole option at a price equal to the fair market
value of such shares at the time of the Violative Indirect Transfer.
In addition, shares of stock of the Company held in the trust shall be
deemed to have been offered for sale to the Company, or its designee, at a price
per share equal to the lesser of (i) the price per share in the transaction that
resulted in such transfer to the trust (or, in the case of a devise, gift or
Violative Indirect Transfer, the fair market value at the time of such devise,
gift or transfer) and (ii) the fair market value on the date the Company, or its
designee, accepts such offer. The Company shall have the right to accept such
offer until the trustee has sold the shares of stock held in the trust. Upon
such a sale to the Company, the interest of the Beneficiary in the shares sold
shall terminate and the trustee shall distribute the net proceeds of the sale to
the Prohibited Transferee or Prohibited Owner.
If any purported transfer of shares of Common Stock would cause the
Company to be beneficially owned by fewer than 100 persons, such transfer will
be null and void in its entirety and the intended transferee will acquire no
rights to the stock.
All certificates representing shares of Common Stock will bear a legend
referring to the restrictions described above. The foregoing ownership
limitations could delay, defer or prevent a transaction or a change in control
of the Company that might involve a premium price for the Common Stock or
otherwise be in the best interest of stockholders.
Pursuant to the Charter, each stockholder shall upon demand be required
to disclose to the Company in writing such information as the Company may
request in order to determine the effect, if any, of such stockholder's actual
and constructive ownership of Common Stock on the Company's status as a REIT and
to ensure compliance with the Ownership Limit, or such other limit as provided
in the Charter or as otherwise permitted by the Board of Directors.
CERTAIN PROVISIONS OF MARYLAND LAW AND OF
THE COMPANY'S CHARTER AND BYLAWS
The following paragraphs summarize certain provisions of the MGCL and
the Company's Charter and Bylaws. The summary does not purport to be complete
and is subject to and qualified in its entirety by reference to the MGCL and to
the Company's Charter and Bylaws, copies of which are on file with the
commission as exhibits to registration statements previously filed by the
Company. See "Available Information."
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BOARD OF DIRECTORS
The Charter provides that the number of directors of the Company shall
be established by the Bylaws but shall not be less than the minimum number
required by the MGCL. Pursuant to the Charter, the Board of Directors is divided
into three classes as nearly equal in size as practicable. One class held office
initially for a term expiring at the annual meeting of stockholders held in June
1998, another class holds office initially for a term expiring at the annual
meeting of stockholders to be held in 1999 and another class holds office
initially for a term expiring at the annual meeting of stockholders to be held
in 2000. As the term of each class expires, directors in that class will be
elected for a term of three years and until their successors are duly elected
and qualified and the directors in the other two classes will continue in
office. The Company believes that classification of the Board of Directors will
help to assure the continuity and stability of the Company's business strategies
and policies as determined by the Board of Directors.
The classified director provision could have the effect of making the
removal of incumbent directors more time consuming and difficult, which could
discourage a third party from making a tender offer or otherwise attempting to
obtain control of the Company, even though such an attempt might be beneficial
to the Company and its stockholders. At least two annual meetings of
stockholders, instead of one, will generally be required to effect a change in a
majority of the Board of Directors. Thus, the classified board provision could
increase the likelihood that incumbent directors will retain their positions.
Holders of shares of Common Stock will have no right to cumulative voting for
the election of directors. Consequently, at each annual meeting of stockholders,
the holders of a majority of the shares of Common Stock will be able to elect
all of the successors of the class of directors whose term expires at that
meeting.
PPD has the right to nominate two persons for election to the Board of
Directors of the Company so long as PPD and its affiliates collectively
beneficially own at least 25% of the outstanding shares of Common Stock.
Any vacancy on the Board of Directors will be filled, at any regular
meeting or at any special meeting called for that purpose, by a majority of the
remaining directors or, in the case of a vacancy resulting from an increase in
the number of directors, by a majority of the entire Board of Directors. In
addition, a vacancy resulting from removal may be filled by the stockholders at
the next annual meeting of stockholders or at a special meeting of the
stockholders called for that purpose. The Charter provides that a majority of
the Board must be Independent Directors.
REMOVAL OF DIRECTORS
While the MGCL and the Charter empower the stockholders to fill
vacancies in the Board of Directors that are caused by the removal of a
director, the Charter precludes stockholders from removing incumbent directors
except for cause and upon a substantial affirmative vote. Specifically, the
Charter provides that a director may be removed only for cause (as defined in
the Charter) and only by the affirmative vote of at least a majority of the
votes entitled to be cast in the election of directors. This provision, when
coupled with the provision in the Bylaws authorizing the Board of Directors to
fill vacant directorships, precludes stockholders from removing incumbent
directors except for cause and upon a substantial affirmative vote and filling
the vacancies created by such removal with their own nominees.
BUSINESS COMBINATIONS
Under the MGCL, certain "business combinations" (including a merger,
consolidation, share exchange, or, in certain circumstances, an asset transfer
or issuance or reclassification of equity securities) between the Company and an
Interested Stockholder or an affiliate thereof are prohibited for five years
after the most recent date on which the person who beneficially owns 10% or more
of the voting power of the Company's then outstanding shares or an affiliate of
the Company which, at any time within the two-year period prior to the date in
question, was the beneficial owner of 10% or more of the voting power of the
Company's then outstanding shares (an "Interested Stockholder") became an
Interested Stockholder. Thereafter, any such business combination must be
recommended by the Board of Directors and approved by the affirmative vote of at
least (i) 80% of the votes entitled to be cast by
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holders of outstanding shares of the Company's voting stock and (ii) two-thirds
of the votes entitled to be cast by holders of outstanding shares of the
Company's voting stock other than shares held by the Interested Stockholder with
whom the business combination is to be effected, unless, among other things, the
Company's stockholders receive a minimum price (as defined in the MGCL) for
their shares of stock and the consideration is received in cash or in the same
form as previously paid by the Interested Stockholder for its shares. These
provisions of the MGCL do not apply, however, to business combinations that are
approved or exempted by the Board of Directors prior to the time that the
Interested Stockholder becomes an Interested Stockholder. The Company has opted
out of the business combinations provisions of the MGCL. Therefore, an
Interested Stockholder would be able to effect a "business combination" without
complying with the requirements set forth above. Stockholder approval is
required to opt back in to such provisions.
CONTROL SHARE ACQUISITIONS
The MGCL provides that "control shares" of the Company acquired in a
"control share acquisition" have no voting rights except to the extent approved
by a vote of two-thirds of the votes entitled to be cast on the matter,
excluding shares owned by the acquiror or by officers or directors who are
employees of the Company. "Control shares" are voting shares of stock which, if
aggregated with all other such shares of stock previously acquired by the
acquiror, or in respect of which the acquiror is able to exercise or direct the
exercise of voting power (except solely by revocable proxy), would entitle the
acquiror to exercise voting power in electing directors within one of the
following ranges of voting power: (i) one-fifth or more but less than one-
third; (ii) one-third or more but less than a majority; or (iii) a majority of
all voting power. Control shares do not include shares of stock the acquiring
person is then entitled to vote as a result of having previously obtained
stockholder approval. A "control share acquisition" means the acquisition of
control shares, subject to certain exceptions.
A person who has made or proposes to make a control share acquisition,
upon satisfaction of certain conditions (including an undertaking to pay
expenses), may compel the Board of Directors to call a special meeting of
stockholders to be held within 50 days of demand to consider voting rights for
the shares. If no request for a meeting is made, the Company may itself present
the question at any stockholders' meeting.
If voting rights are not approved at the stockholders' meeting or if
the acquiring person does not deliver an acquiring person statement as required
by the MGCL, then, subject to certain conditions and limitations, the Company
may redeem any or all of the control shares (except those for which voting
rights have previously been approved) for fair value determined, without regard
to the absence of voting rights for the control shares, as of the date of the
last control share acquisition by the acquiror or of any meeting of stockholders
at which the voting rights of such shares are considered and not approved. If
voting rights for control shares are approved at a stockholders' meeting and the
acquiror becomes entitled to vote a majority of the shares of stock entitled to
vote, all other stockholders may exercise appraisal rights. The fair value of
the shares of stock as determined for purposes of such appraisal rights may not
be less than the highest price per share paid by the acquiror in the control
share acquisition, and certain limitations and restrictions otherwise applicable
to the exercise of dissenters' rights do not apply in the context of a control
share acquisition.
The control share acquisition statute does not apply to shares acquired
in a merger, consolidation or share exchange if the Company is a party to the
transaction, or to acquisitions approved or exempted by the Charter or Bylaws
and adopted at any time before the acquisition of shares. The Bylaws of the
Company contain a provision exempting from the control share acquisition statute
any and all acquisitions by any person of the Company's shares of stock. Such
provision of the Bylaws may only be amended with stockholder approval. There can
be no assurance that such provision will not be amended or eliminated at any
time in the future. As a result of the Company's decision to opt out of the
"control share acquisition" provisions of the MGCL, stockholders who acquire a
substantial block of Common Stock are not precluded from exercising full voting
rights with respect to their shares on all matters without first obtaining the
approval of other stockholders entitled to vote. This may have the effect of
making it easier for any such control share stockholder to effect a business
combination with the Company. However, no assurance can be given that any such
business combination would be consummated or, if consummated, would result in a
purchase of shares of Common Stock from any stockholder at a premium.
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AMENDMENT TO THE CHARTER AND BYLAWS
The Charter provides that the Charter may be amended by the affirmative
vote of a majority of all votes entitled to be cast on the matter. The Bylaws
may be amended by the affirmative vote of a majority of the Board of Directors
or the affirmative vote of the holders of not less than a majority of the shares
of the Company's stock entitled to vote thereon.
MEETINGS OF STOCKHOLDERS
The Bylaws provide for annual meetings of stockholders to elect the
Board of Directors and transact such other business as may properly be brought
before the meeting. Special meetings of stockholders may be called by the
President, the Chief Executive Officer or the Board of Directors and shall be
called at the request in writing of the holders of shares entitled to cast not
less than a majority of all the votes entitled to be cast at such meeting.
ADVANCE NOTICE OF DIRECTOR NOMINATIONS AND NEW BUSINESS
The Bylaws provide that (i) with respect to an annual meeting of
stockholders, nominations of persons for election to the Board of Directors and
the proposal of business to be considered by stockholders may be made only (a)
pursuant to the Company's notice of the meeting, (b) by or at the direction of
the Board of Directors or (c) by a stockholder who is entitled to vote at the
meeting and has complied with the advance notice procedures set forth in the
Bylaws, and (ii) with respect to special meetings of stockholders, only the
business specified in the Company's notice of meeting may be brought before the
meeting of stockholders, or provided that the Board of Directors has determined
that directors shall be elected at such meeting, nominations of persons for
election to the Board of Directors may be brought by a stockholder who is
entitled to vote at the meeting and has complied with the advance notice
provisions set forth in the Bylaws.
The provisions in the Charter on classification of the Board of
Directors and the advance notice provisions of the Bylaws could have the effect
of discouraging a takeover or other transaction in which holders of some, or a
majority, of the shares of Common Stock might receive a premium for their shares
of Common Stock over the then prevailing market price or which such holders
might believe to be otherwise in their best interests.
DISSOLUTION OF THE COMPANY
Under the MGCL and the Charter, the voluntary dissolution of the
Company must be approved by (i) the affirmative vote of a majority of the entire
Board of Directors declaring such dissolution to be advisable and directing that
the proposed dissolution be submitted for consideration at any annual or special
meeting of stockholders, and (ii) upon proper notice, the affirmative vote of
the holders of a majority of the total number of shares of stock outstanding and
entitled to vote thereon.
LIMITATION OF LIABILITY AND INDEMNIFICATION FOR DIRECTORS AND OFFICERS
The MGCL permits a Maryland corporation to include in its charter a
provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages except for liability
resulting from (a) actual receipt of an improper benefit or profit in money,
property or services or (b) active and deliberate dishonesty established by a
final judgment as being material to the cause of action. The Charter contains
such a provision which eliminates such liability to the maximum extent permitted
by Maryland law. This provision does not limit the right of the Company or its
stockholders to obtain other relief, such as an injunction or rescission.
The Charter of the Company authorizes it, to the maximum extent
permitted by Maryland law, to obligate itself to indemnify and to pay or
reimburse reasonable expenses in advance of final disposition of a proceeding to
(a) any present or former director or officer or (b) any individual who, while a
director of the Company and at the request of the Company, serves or has served
another corporation, real estate investment trust, partnership, joint venture,
trust, employee benefit plan or any other enterprise as a director, officer,
partner or trustee of such corporation, real estate investment trust,
partnership, joint venture, trust, employee benefit plan or other enterprise
from and against any claim or liability to which such person may incur by reason
of his or her stature as a present or
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former stockholder, director or officer of the Company. The Bylaws of the
Company obligate it, to the maximum extent permitted by Maryland law, to
indemnify and to pay or reimburse reasonable expenses in advance of final
disposition of a proceeding to (a) any present or former director or officer who
is made a party to the proceeding by reason of his service in that capacity or
(b) any individual who, while a director of the Company and at the request of
the Company, serves or has served another corporation, real estate investment
trust, partnership, joint venture, trust, employee benefit plan or any other
enterprise as a director, officer, partner or trustee of such corporation, real
estate investment trust, partnership, joint venture, trust, employee benefit
plan or other enterprise and who is made party to the proceeding by reason of
his service in that capacity against any claim or liability to which he may
become subject by reason of such service. The Charter and Bylaws also permit the
Company to indemnify and advance expenses to any person who served a predecessor
of the Company in any of the capacities described above and to any employee or
agent of the Company or a predecessor of the Company.
The MGCL requires a corporation (unless its charter provides otherwise,
which the Company's Charter does not) to indemnify a director or officer who has
been successful, on the merits or otherwise, in the defense of any proceeding to
which he is made a party by reason of his service in that capacity. The MGCL
permits a corporation to indemnify its present and former directors and
officers, among others, against judgments, penalties, fines, settlements and
reasonable expenses actually incurred by them in connection with any proceeding
to which they may be made a party by reason of their service in those or other
capacities unless it is established that (a) the act or omission of the director
or officer was material to the matter giving rise to the proceeding and (i) was
committed in bad faith or (ii) was the result of active and deliberate
dishonesty, (b) the director or officer actually received an improper personal
benefit in money, property or services, or (c) in the case of any criminal
proceeding, the director or officer had reasonable cause to believe that the act
or omission was unlawful. However, a Maryland corporation may not indemnify for
an adverse judgment in a suit by or in the right of the corporation or for a
judgment of liability on the basis that personal benefit was improperly
received, unless in either case a court orders indemnification and then only for
expenses. In addition, the MGCL permits a corporation to advance reasonable
expenses to a director or officer upon the corporation's receipt of (a) a
written affirmation by the director or officer of his good faith belief that he
has met the standard of conduct necessary for indemnification by the Company as
authorized by the Bylaws and (b) a written undertaking by him or on his behalf
to repay the amount paid or reimbursed by the corporation if it shall ultimately
be determined that the standard of conduct was not met.
The inclusion of the above provisions in the Charter and Bylaws may
have the effect of reducing the likelihood of stockholder derivative suits
against directors and may discourage or deter shareholders or management from
bringing a lawsuit against directors for breach of their duty of care, even
though such an action, if successful, might otherwise have benefitted the
Company and its stockholders.
The Company has entered into indemnification agreements with each of
its executive officers and directors. The indemnification agreements require,
among other matters, that the Company indemnify its executive officers and
directors to the fullest extent permitted by law and advance to the executive
officers and directors all related expenses, subject to reimbursement if it is
subsequently determined that indemnification is not permitted. Under the
indemnification agreements, the Company must also indemnify and advance all
expenses incurred by executive officers and directors seeking to enforce their
rights under the indemnification agreements and may cover executive officers and
directors under the Company's directors' and officers' liability insurance.
Although the form of indemnification agreement offers substantially the same
scope of coverage afforded by law, it provides greater assurance to directors
and executive officers that indemnification will be available, because, as a
contract, it cannot be modified unilaterally in the future by the Board of
Directors or the stockholders to eliminate the rights it provides.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES TO THE COMPANY OF ITS REIT ELECTION
The following summary of material federal income tax consequences
regarding the Company is based on current law, is for general information only
and is not tax advice. The tax treatment of a holder of any of the Offered
Securities will vary depending upon the terms of the specific securities
acquired by such holder, as well as his or her particular situation, and the
summary below does not attempt to address any aspects of federal income
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taxation relating to holders of Offered Securities. Certain federal income tax
considerations relevant to holders of the Offered Securities will be provided in
the applicable Prospectus Supplement relating thereto. The information set forth
below, to the extent that it constitutes matters of law, summaries of legal
matters or legal conclusions, is the opinion of Latham & Watkins, tax counsel to
the Company. The summary below does not consider the effect of any foreign,
state, local or other tax laws that may be applicable to the Company.
The information in this section is based on the Code, current,
temporary and proposed Treasury Regulations promulgated thereunder, the
legislative history of the Code, current administrative interpretations and
practices of the Internal Revenue Service (the "IRS") (including its practices
and policies as expressed in certain private letter rulings which are not
binding on the IRS except with respect to the particular taxpayers who requested
and received such rulings), and court decisions, all as of the date hereof. No
assurance can be given that future legislation, Treasury Regulations,
administrative interpretations and practices and/or court decisions will not
alter the Code or existing interpretations thereof, and any such change could
apply retroactively to transactions preceding the date of the change. The
Company has not requested, and does not plan to request, any ruling from the IRS
concerning the tax treatment of the Company. Thus, no assurance can be provided
that the statements set forth herein (which are, in any event, not binding on
the IRS or courts) will not be challenged by the IRS or will be sustained by a
court if so challenged.
EACH INVESTOR IS ADVISED TO CONSULT THE APPLICABLE PROSPECTUS
SUPPLEMENT, AS WELL AS HIS OR HER TAX ADVISOR, REGARDING THE TAX CONSEQUENCES TO
HIM OR HER OF THE ACQUISITION, OWNERSHIP AND SALE OF THE OFFERED SECURITIES,
INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF SUCH
ACQUISITION, OWNERSHIP AND SALE AND OF POTENTIAL CHANGES IN THE APPLICABLE TAX
LAWS.
TAXATION OF THE COMPANY
General.
The Company has elected to be taxed as a REIT under Sections 856
through 860 of the Code commencing with its taxable year ended December 31,
1997. The Company believes that, commencing with its taxable year ended
December 31, 1997, it has been organized and has operated in such a manner as to
qualify for taxation as a REIT under the Code commencing with such taxable year,
and the Company intends to continue to operate in such a manner, but no
assurance can be given that it has operated or will continue to operate in such
a manner so as to qualify or remain qualified.
These sections of the Code and the corresponding Treasury Regulations
are highly technical and complex. The following sets forth the material aspects
of the sections that govern the federal income tax treatment of a REIT. This
summary is qualified in its entirety by the applicable Code provisions, rules
and regulations promulgated thereunder, and administrative and judicial
interpretations thereof.
As a condition to the closing of each offering of Offered Securities,
other than medium term notes and as otherwise specified in the applicable
Prospectus Supplement, tax counsel to the Company will render an opinion to the
underwriters of such offering to the effect that, commencing with the Company's
taxable year ended December 31, 1997, the Company has been organized and
operated in conformity with the requirements for qualification as a REIT, and
its proposed method of operation will enable it to continue to meet the
requirements for qualification and taxation as a REIT under the Code. It must be
emphasized that each such opinion will be based on various factual assumptions
relating to the organization and operation of the Company, and will be
conditioned upon certain representations to be made by the Company as to factual
matters, and that such tax counsel to the Company undertakes no obligation
hereby to update any such opinion subsequent to its date. In addition, such
opinions will be based upon the factual representations of the Company as set
forth in this Prospectus and any applicable Prospectus Supplement or
Supplements, and assume that the actions described in this Prospectus and any
such Supplement or Supplements will be completed by the Company in a timely
fashion. Moreover, such qualification and taxation as a REIT depends upon the
Company's ability to meet (through actual annual operating results, asset
composition, distribution levels and diversity of stock ownership) the various
qualification tests imposed under the Code and discussed below, the results of
which have not been and will not be reviewed by such tax counsel to the Company.
Accordingly, no assurance can be given
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that the actual results of the Company's operation during any particular taxable
year will satisfy such requirements. See "--Failure to Qualify." Further, the
anticipated income tax treatment described in the Prospectus or in any
Prospectus Supplement or Supplements may be changed, perhaps retroactively, by
legislation, administrative or judicial action at any time.
If the Company qualifies for taxation as a REIT, it generally will not
be subject to federal corporate income taxes on its net income that is currently
distributed to stockholders. This treatment substantially eliminates the "double
taxation" (at the corporate and stockholder levels) that generally results from
investment in a regular corporation. However, the Company will be subject to
federal income tax as follows. First, the Company will be taxed at regular
corporate rates on any undistributed "REIT taxable income," including
undistributed net capital gains (although stockholders may receive an offsetting
credit against their own Federal income tax liability for Federal income taxes
paid by the Company with respect to any such undistributed net capital gains).
Second, under certain circumstances, the Company may be subject to the
"alternative minimum tax" on its items of tax preference. Third, if the Company
has (i) net income from the sale or other disposition of "foreclosure property"
(i.e., generally, property acquired by the Company by foreclosure or otherwise
upon default of a loan secured by the property) which is held primarily for sale
to customers in the ordinary course of business or (ii) other nonqualifying
income from foreclosure property, it will be subject to tax at the highest
corporate rate on such income. Fourth, if the Company has net income from
prohibited transactions (which are, in general, certain sales or other
dispositions of property, other than foreclosure property, held primarily for
sale to customers in the ordinary course of business), such income will be
subject to a 100% tax. Fifth, if the Company should fail to satisfy the 75%
gross income test or the 95% gross income test (as discussed below), but has
nonetheless maintained its qualification as a REIT because certain other
requirements have been met, it will be subject to a 100% tax on an amount equal
to (a) the gross income attributable to the greater of the amount by which the
Company fails the 75% or 95% gross income tests multiplied by (b) a fraction
intended to reflect the Company's profitability. Sixth, if the Company should
fail to distribute during each calendar year at least the sum of (i) 85% of its
REIT ordinary income for such year, (ii) 95% of its REIT capital gain net income
for such year, and (iii) any undistributed taxable income from prior years, the
Company would be subject to a 4% excise tax on the excess of such required
distribution over the amounts actually distributed. Seventh, with respect to any
asset (a "Built-In Gain Asset") acquired by the Company from a corporation which
is or has been a C corporation (i.e., generally a corporation subject to full
corporate-level tax) in a transaction in which the basis of the Built-In Gain
Asset in the hands of the Company is determined by reference to the basis of the
asset in the hands of the C corporation (such as the mergers of certain PPD
subsidiaries into subsidiaries of the Company) and such basis is less than the
fair market value of such asset at the time of such acquisition (with the excess
of such fair market value over such basis amount being referred to as the
"Built-In Gain"), if the Company recognizes any Built-In Gain on the disposition
of such Built-In Gain Asset during the ten-year period (the "Recognition
Period") beginning on the date on which such asset was acquired by the Company,
then, such Built-In Gain will be subject to tax at the highest regular corporate
rate applicable pursuant to Treasury Regulations that have not yet been
promulgated. The results described above with respect to the recognition of
Built-In Gain assume that the Company will have made an election pursuant to IRS
Notice 88-19 and that the availability or nature of such election is not
modified as proposed in President Clinton's 1999 Federal Budget Proposal.
Requirements for Qualification
The Code defines a REIT as a corporation, trust or association (i)
which is managed by one or more trustees or directors; (ii) the beneficial
ownership of which is evidenced by transferable shares, or by transferable
certificates of beneficial interest; (iii) which would be taxable as a domestic
corporation, but for Sections 856 through 859 of the Code; (iv) which is neither
a financial institution nor an insurance company subject to certain provisions
of the Code; (v) the beneficial ownership of which is held by 100 or more
persons; (vi) during the last half of each taxable year not more than 50% in
value of the outstanding stock of which is owned, actually or constructively, by
five or fewer individuals (as defined in the Code to include certain entities);
and (vii) which meets certain other tests, described below, regarding the nature
of its income and assets and the level of its distributions. The Code provides
that conditions (i) to (iv), inclusive, must be met during the entire taxable
year and that condition (v) must be met during at least 335 days of a taxable
year of twelve months, or during a proportionate part of a taxable year of less
than twelve months. Conditions (v) and (vi) will not apply until after the first
taxable year for
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which an election is made to be taxed as a REIT. For purposes of conditions (v)
and (vi), pension funds and certain other tax-exempt entities are treated as
individuals, subject to a "look-through" exception in the case of condition
(vi).
The Company believes that the conditions set forth in (i) through (vii)
above have been satisfied. The Company also believes that it has issued
sufficient shares of Common Stock with sufficient diversity of ownership to
allow it to satisfy conditions (v) and (vi). In addition, the Company's Charter
provides for restrictions regarding the transfer and ownership of shares, which
restrictions are intended to assist the Company in continuing to satisfy the
share ownership requirements described in (v) and (vi) above. Such ownership and
transfer restrictions are described in "Description of Capital
Stock--Restrictions on Ownership and Transfer." These restrictions, however, may
not ensure that the Company will, in all cases, be able to satisfy the share
ownership requirements described above, in which case the Company would no
longer be qualified as a REIT; provided, however, beginning January 1, 1998, if
the Company complies with the rules contained in the applicable Treasury
Regulations requiring the Company to attempt to ascertain the actual ownership
of its shares, and the Company does not know, and would not have known through
the exercise of reasonable diligence, whether it failed to meet the requirement
set forth in condition (vi) above, the Company will be treated as having met
such requirement. In addition, approximately 51.1% of the Company's stock is
currently owned by PPD, which is itself a wholly-owned subsidiary of Revenue
Properties, and certain of PPD's affiliates. There are no ownership or transfer
restrictions of the type described above in effect with respect to Revenue
Properties' stock. Approximately 31.2% of Revenue Properties' outstanding shares
of common stock are currently owned by the Tanz Family and approximately an
additional 19.8% are owned by Acktion Corporation. If the ownership
concentration of the Tanz Family or Acktion Corporation (or some other party) in
Revenue Properties were to increase, then the Company might no longer satisfy
conditions (v) and (vi) above, and therefore, might no longer be qualified as a
REIT. See "--Failure to Qualify" below. However, the Company's Charter permits
the Company to cause the transfer of such number of shares of Common Stock owned
by PPD to a trust having a charitable beneficiary so as to avoid REIT
disqualification.
In addition, a corporation may not elect to become a REIT unless its
taxable year is the calendar year. From its inception, the Company has had a
calendar taxable year.
Ownership of Partnership Interests
The Company owns and operates one or more properties through
partnerships or limited liability companies (in the following discussion of
Certain Federal Income Tax Consequences to the Company of its REIT Election,
references to partnerships and their partners shall include limited liability
companies and their members). In the case of a REIT which is a partner in a
partnership, Treasury Regulations provide that the REIT will be deemed to own
its proportionate share of the assets of the partnership and will be deemed to
be entitled to the income of the partnership attributable to such share. In
addition, the character of the assets and gross income of the partnership shall
retain the same character in the hands of the REIT for purposes of Section 856
of the Code, including satisfying the gross income tests and the asset tests.
Thus, the Company's proportionate share of the assets and items of income of any
partnership in which the Company is a partner (including the partnership's share
of such items of any subsidiary partnerships) will be treated as assets and
items of income of the Company for purposes of applying the requirements
described herein. A discussion of some aspects of the federal income taxation of
partnerships and their partners is provided below in "--Tax Risks Associated
with Partnerships." The Company has direct control of all partnerships in which
it is a partner and intends to operate such partnerships in a manner consistent
with the requirements for qualification as a REIT.
Ownership of Subsidiaries
The Company owns and operates a number of properties through its
wholly-owned subsidiaries (each a "QRS"). The Company will have owned 100% of
the stock of each of the QRSs at all times that each of the QRSs has been in
existence. As a result, the QRSs will be treated as "qualified REIT
subsidiaries" under the Code. A corporation which is a qualified REIT subsidiary
shall not be treated as a separate corporation, and all assets, liabilities and
items of income, deduction and credit of a qualified REIT subsidiary shall be
treated as assets, liabilities and items of income, deduction and credit (as the
case may be) of the REIT for all purposes under the
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Code (including all REIT qualification tests). Thus, in applying the
requirements described herein, the QRSs will be ignored, and all assets,
liabilities and items of income, deduction and credit of such QRSs will be
treated as assets, liabilities and items of income, deduction and credit the
Company. A qualified REIT subsidiary will not be subject to federal income tax
and the Company's ownership of the voting stock of such a subsidiary will not
violate the restrictions against ownership of securities of any one issuer which
constitute more than 10% of such issuer's voting securities, nor will the
Company's ownership of 100% of such subsidiary's stock violate the restriction
against the Company's ownership of any one issuer's securities, the value of
which constitutes more than 5% of the value of the Company's total assets,
described below under "--Asset Tests."
Income Tests
In order to maintain qualification as a REIT, the Company annually must
satisfy three gross income requirements. First, at least 75% of the Company's
gross income (excluding gross income from prohibited transactions) for each
taxable year must be derived directly or indirectly from investments relating to
real property or mortgages on real property (including "rents from real
property" and, in certain circumstances, interest) or from certain types of
temporary investments. Second, at least 95% of the Company's gross income
(excluding gross income from prohibited transactions) for each taxable year must
be derived from such real property investments, dividends, interest and gain
from the sale or disposition of stock or securities (or from any combination of
the foregoing). Third, for taxable years beginning prior to August 5, 1997,
short-term gain from the sale or other disposition of stock or securities, gain
from prohibited transactions and gain on the sale or other disposition of real
property held for less than four years (apart from involuntary conversions and
sales of foreclosure property) must represent less than 30% of the Company's
gross income (including gross income from prohibited transactions) for each
taxable year. The 30% gross income test has been repealed and will not apply
beginning with the Company's 1998 taxable year.
Rents received by the Company will qualify as "rents from real
property" in satisfying the gross income requirements for a REIT described above
only if several conditions are met. First, the amount of rent must not be based
in whole or in part on the income or profits of any person. However, an amount
received or accrued generally will not be excluded from the term "rents from
real property" solely by reason of being based on a fixed percentage or
percentages of receipts or sales. Second, the Code provides that rents received
from a tenant will not qualify as "rents from real property" in satisfying the
gross income tests if the REIT, or an owner of 10% or more of the REIT, actually
or constructively owns 10% or more of such tenant (a "Related Party Tenant").
Third, if rent attributable to personal property, leased in connection with a
lease of real property, is greater than 15% of the total rent received under the
lease, then the portion of rent attributable to such personal property will not
qualify as "rents from real property." Finally, for rents received to qualify as
"rents from real property," the REIT generally must not operate or manage the
property or furnish or render services to the tenants of such property (subject
to a 1% de minimis exception applicable to the Company for its taxable year
beginning on or after January 1, 1998), other than through an independent
contractor from whom the REIT derives no revenue. The REIT may, however,
directly perform certain services that are "usually or customarily rendered" in
connection with the rental of space for occupancy only and are not otherwise
considered "rendered to the occupant" of the property. The Company does not and
will not (except as provided below), (i) charge rent for any property that is
based in whole or in part on the income or profits of any person (except by
reason of being based on a percentage of receipts or sales, as described above),
(ii) rent any property to a Related Party Tenant, (iii) derive rental income
attributable to personal property (other than personal property leased in
connection with the lease of real property, the amount of which is less than 15%
of the total rent received under the lease), or (iv) perform services considered
to be rendered to the occupant of the property, other than through an
independent contractor from whom the Company derives no revenue. Notwithstanding
the foregoing, the Company may take one or more of the actions described in the
preceding sentence if, based on the advice of counsel, the Company determines
that such action or actions will not have an adverse effect on the Company's
status as a REIT.
The term "interest" generally does not include any amount received or
accrued (directly or indirectly) if the determination of such amount depends in
whole or in part on the income or profits of any person. However, an amount
received or accrued generally will not be excluded from the term "interest"
solely by reason of being based
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<PAGE> 41
on a fixed percentage or percentages of receipts or sales. The Company has not
derived and does not expect to derive any interest which would fail to qualify
under the 75% and 95% gross income tests.
If the Company fails to satisfy one or both of the 75% or 95% gross
income tests for any taxable year, it may nevertheless qualify as a REIT for
such year if it is entitled to relief under certain provisions of the Code.
These relief provisions will be generally available if the Company's failure to
meet such tests was due to reasonable cause and not due to willful neglect, the
Company attaches a schedule of the sources of its income to its federal income
tax return, and any incorrect information on the schedule was not due to fraud
with intent to evade tax. It is not possible, however, to state whether in all
circumstances the Company would be entitled to the benefit of these relief
provisions. For example, if the Company fails to satisfy the gross income tests
because nonqualifying income that the Company intentionally incurs exceeds the
limits on such income, the IRS could conclude that the Company's failure to
satisfy the tests was not due to reasonable cause. If these relief provisions
are inapplicable to a particular set of circumstances involving the Company, the
Company will not qualify as a REIT. As discussed above in "-- Taxation of the
Company -- General," even if these relief provisions apply, a tax would be
imposed with respect to the excess net income. No similar mitigation provision
provides relief if the Company fails the 30% income test (which test, however,
has been repealed beginning with the Company's 1998 taxable year), in which case
the Company would cease to qualify as a REIT.
Any gain realized by the Company on the sale of any property held (or
deemed to be held) as inventory or other property held (or deemed to be held)
primarily for sale to customers in the ordinary course of business (including
the Company's share of any such gain realized by any partnership in which the
Company is a partner or any qualified REIT subsidiary of the Company) will be
treated as income from a prohibited transaction that is subject to a 100% tax.
Under existing law, whether property is held as inventory or primarily for sale
to customers in the ordinary course of a trade or business is a question of fact
that depends on all the facts and circumstances with respect to the particular
transaction. The Company intends to hold the Properties for investment with a
view to long-term appreciation, to engage in the business of acquiring,
developing, owning, and operating the Properties (and other properties) and to
make such occasional sales of the Properties as are consistent with the
Company's investment objectives (and in a manner so as to minimize the risk that
such sales would be treated as prohibited transactions subject to the 100%
penalty tax). There can be no assurance, however, that the IRS might not contend
that one or more of such sales should be treated as prohibited transactions
subject to the 100% penalty tax.
Asset Tests
The Company, at the close of each quarter of its taxable year, must
also satisfy three tests relating to the nature of its assets. First, at least
75% of the value of the Company's total assets (including assets held by the
Company's qualified REIT subsidiaries and the Company's allocable share of the
assets held by partnerships in which the Company owns an interest) must be
represented by real estate assets, including (i) its allocable share of real
estate assets held by partnerships in which the Company owns an interest and
(ii) stock or debt instruments held for not more than one year purchased with
the proceeds of a stock offering or long-term (i.e., at least five years) debt
offering of the Company, cash, cash items and government securities. Second, not
more than 25% of the Company's total assets (including assets held by the
Company's qualified REIT subsidiaries and the Company's allocable share of the
assets held by partnerships in which the Company owns an interest) may be
represented by securities other than those in the 75% asset class. Third, of the
investments included in the 25% asset class, the value of any one issuer's
securities owned by the Company may not exceed 5% of the value of the Company's
total assets (including assets held by the Company's qualified REIT subsidiaries
and the Company's allocable share of the assets held by partnerships in which
the Company owns an interest) and the Company may not own more than 10% of any
one issuer's outstanding voting securities.
The Company currently holds 100% of the stock of each of the QRSs. As
set forth above, the assets tests provide that a REIT may not own securities of
any one issuer which constitute more than 10% of such issuer's voting securities
or more than 5% of the value of the REIT's total assets. However, since the QRSs
are "qualified REIT subsidiaries" as defined in the Code, such subsidiaries will
not be treated as separate corporations for federal income tax purposes, and the
Company's ownership of the stock of the QRSs will not cause the Company to fail
any of the foregoing asset tests.
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<PAGE> 42
After initially meeting the foregoing asset tests at the close of any
quarter, the Company will not lose its status as a REIT for failure to satisfy
the asset tests at the end of a later quarter solely by reason of changes in
asset values. If the failure to satisfy the asset tests results from an
acquisition of securities or other property during a quarter (including as a
result of the Company increasing its interest in any partnership in which the
Company is a partner), the failure can be cured by disposition of sufficient
nonqualifying assets within 30 days after the close of that quarter. The Company
has maintained and intends to continue to maintain adequate records of the value
of its assets to ensure compliance with the asset tests and to take such other
actions within 30 days after the close of any quarter as may be required to cure
any noncompliance. If the Company fails to cure any noncompliance with the asset
tests within such time period, the Company would cease to qualify as a REIT.
Annual Distribution Requirements
The Company, in order to qualify as a REIT, is required to distribute
dividends (other than capital gain dividends) to its stockholders in an amount
at least equal to (i) the sum of (a) 95% of the Company's "REIT taxable income"
(computed without regard to the dividends paid deduction and the Company's net
capital gain) and (b) 95% of the net income (after tax), if any, from
foreclosure property, minus (ii) the excess of the sum of certain items of
noncash income (i.e., income attributable to leveled stepped rents, original
issue discount or purchase money debt, or a like-kind exchange that is later
determined to be taxable) over 5% of the "REIT taxable income" as described in
clause (i)(a) above. In addition, if the Company disposes of any Built-In Gain
Asset during its Recognition Period, the Company will be required, pursuant to
Treasury Regulations which have not yet been promulgated, to distribute at least
95% of the Built-In Gain (after tax), if any, recognized on the disposition of
such asset (together with the preceding sentence, the "95% distribution
requirement"). Such distributions must be paid in the taxable year to which they
relate, or in the following taxable year if declared before the Company timely
files its tax return for such year and if paid on or before the first regular
dividend payment after such declaration. Such distributions are taxable to
holders of Common Stock (other than tax-exempt entities, as discussed below) in
the year in which paid, even though such distributions relate to the prior year
for purposes of the Company's 95% distribution requirement. The amount
distributed must not be preferential (i.e., each holder of shares of Common
Stock must receive the same distribution per share). To the extent that the
Company does not distribute all of its net capital gain or distributes at least
95%, but less than 100%, of its "REIT taxable income," as adjusted, it will be
subject to tax on the undistributed amount at regular ordinary and capital gains
corporate tax rates. Furthermore, if the Company should fail to distribute (or
is not otherwise deemed to have distributed) during each calendar year (or, in
the case of distributions with dividend declaration and record dates falling in
the last three months of the calendar year, by the end of January immediately
following such year) at least the sum of (i) 85% of its REIT ordinary income for
such year, (ii) 95% of its REIT capital gain income for such year, and (iii) any
undistributed taxable income from prior periods, the Company would be subject to
a 4% excise tax on the excess of such required distribution over the amounts
actually distributed. Any REIT taxable income and net capital gain on which this
excise tax is imposed for any year is treated as an amount distributed that year
for purposes of calculating such tax. The Company believes that it has made, and
intends to continue to make, timely distributions sufficient to satisfy these
annual distribution requirements and to avoid or minimize the amount of any
liability for corporate income or excise taxes.
The Company's REIT taxable income has been and is expected to continue
to be less than its cash flow due to the allowance of depreciation and other
non-cash charges in computing REIT taxable income. Accordingly, the Company
anticipates that it will generally have sufficient cash or liquid assets to
enable it to satisfy the distribution requirements described above. It is
possible, however, that the Company, from time to time, may not have sufficient
cash or other liquid assets to meet these distribution requirements due to
timing differences between (i) the actual receipt of income and actual payment
of deductible expenses and (ii) the inclusion of such income and deduction of
such expenses in arriving at taxable income of the Company. In the event that
such timing differences occur, in order to meet the distribution requirements,
the Company may find it necessary to arrange for short-term, or possibly
long-term, borrowings or to pay dividends in the form of taxable stock
dividends.
Under certain circumstances, the Company may be able to rectify a
failure to meet the 95% Distribution Requirement for a year by paying
"deficiency dividends" to stockholders in a later year, which may be included in
the Company's deduction for dividends paid for the earlier year. Thus, the
Company may be able to avoid being
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<PAGE> 43
taxed on amounts distributed as deficiency dividends; however, the Company will
be required to pay interest to the IRS based upon the amount of any deduction
taken for deficiency dividends.
FAILURE TO QUALIFY
If the Company fails to qualify for taxation as a REIT in any taxable
year, and the relief provisions do not apply, the Company will be subject to tax
(including any applicable alternative minimum tax) on its taxable income at
regular corporate rates. Distributions to stockholders in any year in which the
Company fails to qualify will not be deductible by the Company nor will they be
required to be made. As a result, the Company's failure to maintain its
qualification as a REIT would reduce the cash available for distribution by the
Company to its stockholders. In addition, if the Company fails to qualify as a
REIT, all distributions to stockholders will be taxable as ordinary income, to
the extent of the Company's current and accumulated earnings and profits, and,
subject to certain limitations of the Code, corporate distributees may be
eligible for the dividends received deduction. Unless entitled to relief under
specific statutory provisions, the Company will also be disqualified from
taxation as a REIT for the four taxable years following the year during which
qualification was lost. It is not possible to state whether in all circumstances
the Company would be entitled to such statutory relief. In addition, President
Clinton's 1999 Federal Budget Proposal contains a provision which, if enacted in
its present form, would result in the immediate taxation of all gain inherent in
a C corporation's assets upon an election by the corporation to become a REIT in
taxable years beginning after January 1, 1999, and thus could effectively
preclude the Company from re-electing to be taxed as a REIT following a loss of
REIT status.
CONSEQUENCES OF THE FORMATION TRANSACTIONS ON THE COMPANY'S QUALIFICATION AS A
REIT--EARNINGS AND PROFITS DISTRIBUTION REQUIREMENT
A REIT is not permitted to have accumulated earnings and profits
attributable to non-REIT years. A REIT has until the close of its first taxable
year in which it has non-REIT earnings and profits to distribute all such
earnings and profits (the "E&P Distribution Rule"). Failure to do so would
result in the loss of the Company's REIT status. See "--Failure to Qualify." As
part of the transactions consummated in connection with the Company's formation
and IPO in August 1997 (the "Formation Transactions"), the Company may have
acquired earnings and profits attributable to non-REIT years from certain of
PPD's wholly-owned subsidiaries. While not free from doubt, the Company
believes, and intends to take the position, that the earnings and profits of the
PPD subsidiaries remained with the PPD affiliated group and were not acquired by
the Company in the Formation Transactions. For purposes of applying the E&P
Distribution Rule, however, the Company has assumed that the earnings and
profits of the PPD subsidiaries (the "PPD Earnings") did carry over to the
Company and therefore the Company had distributed (or had been deemed to have
distributed) any such earnings and profits prior to the end of 1997 (the year in
which the Formation Transactions occurred) in order to avoid REIT
disqualification for 1997. The calculation of the amount of PPD Earnings, and
whether the PPD Earnings were acquired by the Company in the Formation
Transactions and thereafter distributed, are subject to challenge by the IRS.
However, even if the IRS should challenge such items, the Company believes that
it did not have earnings and profits attributable to non-REIT years as of the
close of 1997 and therefore that the Company qualified as a REIT for 1997. See
"--Failure to Qualify."
TAX RISKS ASSOCIATED WITH PARTNERSHIPS
The Company currently owns interests in several partnerships, and may
own interests in additional partnerships in the future. The ownership of an
interest in a partnership involves special tax risks, including the possible
challenge by the IRS of (i) allocations of income and expense items, which could
affect the computation of taxable income of the Company, and (ii) the status of
a partnership as a partnership (as opposed to an association taxable as a
corporation) for federal income tax purposes. This partnership status risk
should be substantially diminished by Treasury Regulations that were issued on
December 17, 1996 and which were effective January 1, 1997. With respect to the
Company's existing partnership investments, these regulations provide that (1)
previously claimed partnership status, if supported by a reasonable basis for
classification, will generally be respected for all periods prior to January 1,
1997; and (2) previously claimed partnership status will generally be retained
after January 1, 1997, unless an entity elects to change its status by filing a
formal election. The Company believes that it has a reasonable basis for the
classification of the partnerships in which it owns interests as partnerships
for federal income tax purposes and has neither filed nor caused to be filed,
nor will it file (or cause to be filed), an election to
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<PAGE> 44
be treated otherwise. If a partnership elected to be treated as, or was
otherwise deemed to be, an association taxable as a corporation for federal
income tax purposes, it would be treated as a taxable entity. In such a
situation, if the Company owned more than 10% of the outstanding voting
securities of such partnership, or if the value of such securities exceeded 5%
of the value of the Company's assets, the Company would fail to satisfy the
asset tests described above, and would therefore fail to qualify as a REIT.
Further, distributions from such partnership to the Company would be treated as
dividends that are not taken into account in satisfying the 75% gross income
test described above, which would make it more difficult for the Company to
satisfy that test. Moreover, the interest in any such partnership held by the
Company would not qualify as a "real estate asset," which would make it more
difficult for the Company to meet 75% asset test described above. In addition,
the Company would not be able to deduct its share of any losses generated by
such a partnership in computing its taxable income, which might adversely affect
the Company's ability to comply with the REIT distribution requirements. See
"--Failure to Qualify" for a discussion of the effect of the Company's failure
to meet any one or more of these tests for a taxable year.
The Company believes that the partnerships in which it owns interests
have been and will continue to be treated as a partnerships (rather than as
associations taxable as corporations) for federal income tax purposes. The
Company's position in this respect is not binding on the IRS and no assurance
can be given that the IRS will not successfully challenge the status of any
partnership as a partnership for federal income tax purposes.
RECENTLY PROPOSED LEGISLATION
As set forth above, PPD, which is a wholly-owned subsidiary of Revenue
Properties, currently holds in excess of 50% of the voting power and value of
the stock of the Company. President Clinton's 1999 Federal Budget Proposal
contains language which, if enacted in its present form, would impose as an
additional requirement for REIT qualification that no person (defined to include
certain entities such as corporations) be permitted to own stock possessing more
than 50 percent of the total combined voting power of all classes of voting
stock or more than 50 percent of the total value of shares of all classes of
stock. It is not possible to predict with certainty whether this portion of the
President's Budget Proposal will ultimately be enacted into law, the character
and details of the provisions which would be included in any legislation so
enacted and whether and to what extent such legislation would affect the Company
and the stockholders or whether any such effect would be adverse. Depending upon
the final language of any legislation actually enacted, it is possible that PPD
could be required to dispose of a sufficient number of shares of Common Stock to
preserve the Company's status as a REIT, or, pursuant to the Company's Charter,
such shares would be transferred to a trust for the benefit of a charitable
beneficiary. See "Description of Capital Stock--Restrictions on Ownership and
Transfer."
OTHER TAX CONSEQUENCES
As discussed above, the Company acquired a number of properties through
the merger of the Merger Subsidiaries with and into the Company or the QRSs.
These transactions were intended to qualify as tax free reorganizations under
the Code. One consequence of having acquired such properties in this manner is
that the initial tax basis of the Company in the properties is equal to the tax
basis the Merger Subsidiaries had in the properties. As a result, the Company's
initial tax basis in such properties was less than the fair market value of the
properties at the time of acquisition. The lower tax basis reduces the amount of
depreciation deductions the Company is permitted to take, and will increase the
amount of taxable gain (or reduce the amount of tax loss) recognized by the
Company on the disposition of such properties. In addition, any net operating
losses of such Merger Subsidiaries carried over to the Company and, subject to
certain limitations, are available to the Company to offset the taxable income,
if any, of the Company. As a result, any such net operating losses could reduce
the amount of distributions to stockholders which the Company is required to
make.
The Company may be subject to state or local taxation in various state
or local jurisdictions, including those in which it transacts business or
resides. The state and local tax treatment of the Company may not conform to the
federal income tax consequences discussed above. Consequently, prospective
stockholders should consult their own tax advisors regarding the effect of state
and local tax laws on an investment in the Company.
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<PAGE> 45
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities to one or more underwriters
for public offering and sale by them or may sell the Offered Securities to
investors directly or through agents, which agents may be affiliated with the
Company. Any such underwriter or agent involved in the offer and sale of the
Offered Securities will be named in the applicable Prospectus Supplement.
Sales of Offered Securities offered pursuant to any applicable
Prospectus Supplement may be effected from time to time in one or more
transactions at a fixed price or prices which may be changed, at prices related
to the prevailing market prices at the time of sale, or at negotiated prices.
The Company also may, from time to time, authorize underwriters acting as the
Company's agents to offer and sell the Offered Securities upon the terms and
conditions as set forth in the applicable Prospectus Supplement. In connection
with the sale of Offered Securities, underwriters may be deemed to have received
compensation from the Company in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of Offered
Securities for whom they may act as agent. Underwriters may sell Offered
Securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Company to underwriters or
agents in connection with the offering of Offered Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in the applicable Prospectus Supplement. Underwriters, dealers
and agents participating in the distribution of the Offered Securities may be
deemed to be underwriters, and any discounts and commissions received by them
and any profit realized by them on resale of the Offered Securities may be
deemed to be underwriting discounts and commissions under the Securities Act.
Underwriters, dealers and agents may be entitled, under agreements entered into
with the Company, to indemnification against and contribution toward certain
civil liabilities, including liabilities under the Securities Act. Any such
indemnification agreements will be described in the applicable Prospectus
Supplement.
Unless otherwise specified in the related Prospectus Supplement, each
series of Offered Securities will be a new issue with no established trading
market, other than the Common Stock which is listed on the New York Stock
Exchange. Any shares of Common Stock sold pursuant to a Prospectus Supplement
may be listed on such exchange, subject to official notice of issuance. The
Company may elect to list any other series of Preferred Stock and any series of
Debt Securities, Depository Shares or Warrants on any exchange, but neither is
obligated to do so. It is possible that one or more underwriters may make a
market in a series of Offered Securities, but will not be obligated to do so and
may discontinue any market making at any time without notice. Therefore, no
assurance can be given as to the liquidity of the trading market for the Offered
Securities.
If so indicated in the applicable Prospectus Supplement, the Company
may authorize dealers acting as the Company's agents to solicit offers by
certain institutions to purchase Offered Securities from the Company Partnership
at the public offering price set forth in such Prospectus Supplement pursuant to
Delayed Delivery Contracts ("Contracts") providing for payment and delivery on
the date or dates stated in such Prospectus Supplement. Each Contract will be
for an amount not less than, and the aggregate principal amount of Offered
Securities sold pursuant to Contracts shall be not less nor more than, the
respective amounts stated in the applicable Prospectus Supplement. Institutions
with whom Contracts, when authorized, may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions, and other institutions but will in all cases be subject
to the approval of the Company, as the case may be. Contracts will not be
subject to any conditions except (i) the purchase by an institution of the
Offered Securities covered by its Contracts shall not at the time of delivery be
prohibited under the laws of any jurisdiction in the United States to which such
institution is subject, and (ii) if the Offered Securities are being sold to
underwriters, the Company, as the case may be, shall have sold to such
underwriters the total principal amount of the Offered Securities less the
principal amount thereof covered by Contracts.
Certain of the underwriters and their affiliates may be customers of,
engage in transactions with and perform services for, the Company in the
ordinary course of business.
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<PAGE> 46
EXPERTS
The consolidated financial statements and Schedule III of the Company
as of December 31, 1997 and 1996 and for each of the years in the three-year
period ended December 31, 1997 included in the Annual Report on Form 10-K for
the year ended December 31, 1997, have been incorporated herein by reference in
reliance upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, and upon the authority of said firm as experts in accounting and
auditing.
LEGAL MATTERS
The validity of the Debt Securities offered hereby will be passed upon
for the Company by Latham & Watkins, and the validity of the Common Stock,
Preferred Stock, Depositary Shares and Warrants offered hereby will be passed
upon for the Company by Ballard Spahr Andrews & Ingersoll, LLP, Baltimore,
Maryland.
In addition, the description of federal income tax consequences
contained in this Prospectus under the heading "Certain Federal Income Tax
Consequences to the Company of its REIT Election" is based upon the opinion of
Latham & Watkins. Latham & Watkins will rely upon the opinion of Ballard Spahr
Andrews & Ingersoll, LLP, as to certain matters of Maryland law.
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<PAGE> 47
No dealer, salesperson or other individual has been authorized to give any
information or to make any representations other than contained or incorporated
by reference in this Prospectus and, if given or made, such information or
representations must not be relied upon as having been authorized by the
Company or any underwriter. This Prospectus does not constitute an offer or a
solicitation by anyone in any jurisdiction in which such offer or solicitation
is not authorized or in which he person making such offer is not qualified to
do so or to anyone to whom it is unlawful to make such offer or solicitation.
Neither the delivery of this Prospectus nor any sale made hereunder shall,
under any circumstance, create any implication that there has not been any
change in the affairs of the Company since the date hereof.
SUMMARY OF CONTENTS
Page
----
Available Information........................ 2
Incorporation by Certain Information
by Reference............................... 3
The Company.................................. 4
Use of Proceeds.............................. 5
Ratio of Earnings to Fixed Charges........... 5
Risk Factors................................. 6
Description of Debt Securities............... 8
Description of Common Stock.................. 17
Description of Preferred Stock............... 18
Description of Depositary Shares............. 24
Description of Warrants...................... 27
Certain Provisions of Maryland Law
and the Company's Charter and Bylaws....... 30
Certain Federal Income Tax Consequences
to the Company of its REIT Election........ 34
Plan of Distribution......................... 43
Experts...................................... 44
Legal Matters................................ 44
PAN PACIFIC
RETAIL PROPERTIES, INC.
PROSPECTUS
, 1998
<PAGE> 48
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses, other than underwriting discounts and commissions, in
connection with the offering of the securities being registered are set forth
below. All of such expenses are estimates, except the Securities Act
registration fee.
<TABLE>
<S> <C>
Registration Fee - Securities and Exchange Commission ......... $ 118,000
NASD Fee ...................................................... 20,000
New York Stock Exchange Listing Fee ........................... 35,000
Transfer Agent and Registrar's Fees ........................... 10,000
Printing and Engraving Expenses ............................... 150,000
Legal Fees and Expenses (other than Blue Sky) ................. 300,000
Accounting Fees and Expenses .................................. 125,000
Miscellaneous Expenses ........................................ 114,000
-----------
Total ..................................................... $ 872,000
===========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The MGCL permits a Maryland corporation to include in its charter a
provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages except for liability
resulting from (a) actual receipt of an improper benefit or profit in money,
property or services or (b) active and deliberate dishonesty established by a
final judgment as being material to the cause of action. The Charter contains
such a provision which eliminates such liability to the maximum extent permitted
by Maryland law.
The Charter of the Company authorizes it, to the maximum extent
permitted by Maryland law, to obligate itself to indemnify and to pay or
reimburse reasonable expenses in advance of final disposition of a proceeding to
(a) any present or former director or officer or (b) any individual who, while a
director of the Company and at the request of the Company, serves or has served
another corporation, real estate investment trust, partnership, joint venture,
trust, employee benefit plan or any other enterprise as a director, officer,
partner or trustee of such corporation, real estate investment trust,
partnership, joint venture, trust, employee benefit plan or other enterprise
from and against any claim or liability to which such person may incur by reason
of his or her stature as a present or former stockholder, director or officer of
the Company. The Bylaws of the Company obligate it, to the maximum extent
permitted by Maryland law, to indemnify and to pay or reimburse reasonable
expenses in advance of final disposition of a proceeding to (a) any present or
former director or officer who is made a party to the proceeding by reason of
his service in that capacity or (b) any individual who, while a director of the
Company and at the request of the Company, serves or has served another
corporation, real estate investment trust, partnership, joint venture, trust,
employee benefit plan or any other enterprise as a director, officer, partner or
trustee of such corporation, real estate investment trust, partnership, joint
venture, trust, employee benefit plan or other enterprise and who is made party
to the proceeding by reason of his service in that capacity against any claim or
liability to which he may become subject by reason of such service. The Charter
and Bylaws also permit the Company to indemnify and advance expenses to any
person who served a predecessor of the Company in any of the capacities
described above and to any employee or agent of the Company or a predecessor of
the Company.
The MGCL requires a corporation (unless its charter provides otherwise,
which the Company's Charter does not) to indemnify a director or officer who has
been successful, on the merits or otherwise, in the defense of any proceeding to
which he is made a party by reason of his service in that capacity. The MGCL
permits a corporation to indemnify its present and former directors and
officers, among others, against judgments, penalties,
II-1
<PAGE> 49
fines, settlements and reasonable expenses actually incurred by them in
connection with any proceeding to which they may be made a party by reason of
their service in those or other capacities unless it is established that (a) the
act or omission of the director or officer was material to the matter giving
rise to the proceeding and (i) was committed in bad faith or (ii) was the result
of active and deliberate dishonesty, (b) the director or officer actually
received an improper personal benefit in money, property or services, or (c) in
the case of any criminal proceeding, the director or officer had reasonable
cause to believe that the act or omission was unlawful. However, a Maryland
corporation may not indemnify for an adverse judgment in a suit by or in the
right of the corporation or for a judgment of liability on the basis that
personal benefit was improperly received, unless in either case a court orders
indemnification and then only for expenses. In addition, the MGCL permits a
corporation to advance reasonable expenses to a director or officer upon the
corporation's receipt of (a) a written affirmation by the director or officer of
his good faith belief that he has met the standard of conduct necessary for
indemnification by the Company as authorized by the Bylaws and (b) a written
undertaking by him or on his behalf to repay the amount paid or reimbursed by
the corporation if it shall ultimately be determined that the standard of
conduct was not met.
The inclusion of the above provisions in the Charter and Bylaws may
have the effect of reducing the likelihood of stockholder derivative suits
against directors and may discourage or deter shareholders or management from
bringing a lawsuit against directors for breach of their duty of care, even
though such an action, if successful, might otherwise have benefitted the
Company and its stockholders.
The Company has entered into indemnification agreements with each of
its executive officers and directors. The indemnification agreements require,
among other matters, that the Company indemnify its executive officers and
directors to the fullest extent permitted by law and advance to the executive
officers and directors all related expenses, subject to reimbursement if it is
subsequently determined that indemnification is not permitted. Under the
indemnification agreements, the Company must also indemnify and advance all
expenses incurred by executive officers and directors seeking to enforce their
rights under the indemnification agreements and may cover executive officers and
directors under the Company's directors' and officers' liability insurance.
Although the form of indemnification agreement offers substantially the same
scope of coverage afforded by law, it provides greater assurance to directors
and executive officers that indemnification will be available, because, as a
contract, it cannot be modified unilaterally in the future by the Board of
Directors or the stockholders to eliminate the rights it provides.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
<S> <C>
1.1* Form of Underwriting Agreement between the Company and the
Representatives
1.2* Form of Debt Underwriting Agreement
4.1 Form of Indenture
4.2* Form of Warrant Agreement
4.3* Form of Deposit Agreement
5.1 Opinion of Ballard Spahr Andrews & Ingersoll, LLP
regarding the validity of the securities being registered
5.2 Opinion of Latham & Watkins regarding the validity of the
Debt Securities
8.1 Opinion of Latham & Watkins regarding tax matters
12.1 Calculation of Ratio of Earnings to Fixed Charges
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Ballard Spahr Andrews & Ingersoll, LLP
(contained in Exhibit 5.1)
</TABLE>
II-2
<PAGE> 50
<TABLE>
<CAPTION>
<S> <C>
23.3 Consent of Latham & Watkins (contained in Exhibits 5.2 and 8.1)
24.1** Power of Attorney
25.1* Statement of Eligibility of Trustee
</TABLE>
---------------------
* To be filed by amendment or incorporated by reference in
connection with the offering of the applicable Offered Securities.
** Previously filed.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering price may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
Provided, however, that subparagraphs (i) and (ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in the periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-3
<PAGE> 51
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
The undersigned Registrant hereby further undertakes that, for the
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual reports pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in this registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
The undersigned Registrant hereby further undertakes to deliver or
cause to be delivered with the prospectus, to each person to whom the prospectus
is sent or given, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act;
and, where interim financial information required to be presented by Article 3
of Regulation S-X is not set forth in the Prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
The undersigned Registrant hereby further undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance under Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4), or
497(h) under the Securities Act of 1933 shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
If and when applicable, the undersigned Registrant, hereby further
undertakes to file an application for the purpose of determining the eligibility
of the Trustee to act under subsection (a) of Section 310 of the Trust Indenture
Act in accordance with the rules and regulations prescribed by the Commission
under Section 305(b)(2) of the Act.
II-4
<PAGE> 52
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Vista, State of California, on the
fifth day of October, 1998.
PAN PACIFIC RETAIL PROPERTIES, INC.
By: /s/ STUART A. TANZ
-------------------------------------
Stuart A. Tanz
Chief Executive Officer and President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to Registration Statement has been signed below by the following
persons in the capacities indicated on October 5, 1998.
<TABLE>
<CAPTION>
Title
-----
<S> <C>
/s/ STUART A. TANZ Director, Chief Executive Officer and President
- ----------------------------------------
Stuart A. Tanz
* Executive Vice President, Chief Financial Officer,
- ---------------------------------------- Treasurer and Secretary
David L. Adlard
* Vice President and Controller
- ----------------------------------------
Laurie A. Sneve
* Director
- ----------------------------------------
Paul D. Campbell
* Director
- ----------------------------------------
Mark J. Riedy
* Director
- ----------------------------------------
Bernard M. Feldman
* Director
- ----------------------------------------
Melvin S. Adess
</TABLE>
*By: /s/ STUART A. TANZ
-----------------------------------
Stuart A. Tanz
Attorney-in-Fact
II-5
<PAGE> 53
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
- ------- ----
<S> <C> <C>
1.1* Form of Underwriting Agreement between the Company and the Representatives
1.2* Form of Debt Underwriting Agreement
4.1 Form of Indenture
4.2* Form of Warrant Agreement
4.3* Form of Deposit Agreement
5.1 Opinion of Ballard Spahr Andrews & Ingersoll, LLP regarding the validity of the securities being
registered
5.2 Opinion of Latham & Watkins regarding the validity of the Debt Securities
8.1 Opinion of Latham & Watkins regarding tax matters
12.1 Calculation of Ratio of Earnings to Fixed Charges
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Ballard Spahr Andrews & Ingersoll, LLP (contained in Exhibit 5.1)
23.3 Consent of Latham & Watkins (contained in Exhibits 5.2 and 8.1)
24.1** Power of Attorney
25.1* Statement of Eligibility of Trustee
</TABLE>
- -----------------
* To be filed by amendment or incorporated by reference in connection with the
offering of the applicable Offered Securities.
** Previously filed.
<PAGE> 1
EXHIBIT 4.1
PAN PACIFIC RETAIL PROPERTIES, INC.
TO
[NAME OF TRUSTEE]
TRUSTEE
------------------------------
INDENTURE
DATED AS OF __________________
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION................. 1
SECTION 1.1. DEFINITIONS................................................... 1
SECTION 1.2. COMPLIANCE CERTIFICATES AND OPINIONS.......................... 8
SECTION 1.3. FORM OF DOCUMENTS DELIVERED TO TRUSTEE........................ 8
SECTION 1.4. ACTS OF HOLDERS............................................... 9
SECTION 1.5. NOTICES, ETC., TO TRUSTEE AND COMPANY......................... 10
SECTION 1.6. NOTICE TO HOLDERS; WAIVER..................................... 10
SECTION 1.7. COUNTERPARTS; EFFECT OF HEADINGS AND TABLE OF CONTENTS........ 11
SECTION 1.8. SUCCESSORS AND ASSIGNS........................................ 11
SECTION 1.9. SEVERABILITY CLAUSE........................................... 11
SECTION 1.10. BENEFITS OF INDENTURE........................................ 11
SECTION 1.11. GOVERNING LAW................................................ 12
SECTION 1.12. LEGAL HOLIDAYS............................................... 12
SECTION 1.13. IMMUNITY OF STOCKHOLDERS, DIRECTORS, OFFICERS AND AGENTS
OF THE COMPANY............................................... 12
SECTION 1.14. CONFLICT WITH TRUST INDENTURE ACT............................ 12
ARTICLE II. SECURITIES FORMS....................................................... 13
SECTION 2.1. FORMS OF SECURITIES........................................... 13
SECTION 2.2. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION............... 13
SECTION 2.3. SECURITIES ISSUABLE IN GLOBAL FORM............................ 13
ARTICLE III. THE SECURITIES........................................................ 14
SECTION 3.1. AMOUNT UNLIMITED; ISSUABLE IN SERIES.......................... 14
SECTION 3.2. DENOMINATIONS................................................. 17
SECTION 3.3. EXECUTION, AUTHENTICATION, DELIVERY AND DATING................ 17
SECTION 3.4. TEMPORARY SECURITIES.......................................... 19
SECTION 3.5. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE........... 21
SECTION 3.6. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.............. 23
SECTION 3.7. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED................ 24
SECTION 3.8. PERSONS DEEMED OWNERS......................................... 26
SECTION 3.9. CANCELLATION.................................................. 26
SECTION 3.10. COMPUTATION OF INTEREST...................................... 27
ARTICLE IV. SATISFACTION AND DISCHARGE............................................. 27
SECTION 4.1. SATISFACTION AND DISCHARGE OF INDENTURE....................... 27
SECTION 4.2. APPLICATION OF TRUST FUNDS.................................... 28
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
TABLE OF CONTENTS (Continued)
PAGE
----
<S> <C>
ARTICLE V. REMEDIES................................................................ 28
SECTION 5.1. EVENTS OF DEFAULT............................................. 28
SECTION 5.2. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT............ 30
SECTION 5.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
BY TRUSTEE.................................................... 30
SECTION 5.4. TRUSTEE MAY FILE PROOFS OF CLAIM.............................. 31
SECTION 5.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES OR COUPONS......................................... 32
SECTION 5.6. APPLICATION OF MONEY COLLECTED................................ 32
SECTION 5.7. LIMITATION ON SUITS........................................... 32
SECTION 5.8. UNCONDITIONAL RIGHTS OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM, IF ANY, INTEREST AND ADDITIONAL AMOUNTS.............. 33
SECTION 5.9. RESTORATION OF RIGHTS AND REMEDIES............................ 33
SECTION 5.10. RIGHTS AND REMEDIES CUMULATIVE............................... 33
SECTION 5.11. DELAY OR OMISSION NOT WAIVER................................. 34
SECTION 5.12. CONTROL BY HOLDERS OF SECURITIES............................. 34
SECTION 5.13. WAIVER OF PAST DEFAULTS...................................... 34
SECTION 5.14. WAIVER OF USURY, STAY OR EXTENSION LAWS...................... 34
SECTION 5.15. UNDERTAKING FOR COSTS........................................ 35
ARTICLE VI. THE TRUSTEE............................................................ 35
SECTION 6.1. NOTICE OF DEFAULTS............................................ 35
SECTION 6.2. CERTAIN RIGHTS OF TRUSTEE..................................... 35
SECTION 6.3. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES........ 36
SECTION 6.4. MAY HOLD SECURITIES........................................... 37
SECTION 6.5. MONEY HELD IN TRUST........................................... 37
SECTION 6.6. COMPENSATION AND REIMBURSEMENT................................ 37
SECTION 6.7. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY; CONFLICTING
INTERESTS..................................................... 38
SECTION 6.8. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR............. 38
SECTION 6.9. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR........................ 39
SECTION 6.10. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS..................................................... 40
SECTION 6.11. APPOINTMENT OF AUTHENTICATING AGENT.......................... 40
ARTICLE VII. HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY..................... 41
SECTION 7.1. DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS.................. 41
SECTION 7.2. REPORTS BY TRUSTEE............................................ 41
SECTION 7.3. REPORTS BY COMPANY............................................ 42
SECTION 7.4. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS..... 42
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
TABLE OF CONTENTS (Continued)
PAGE
----
<S> <C>
ARTICLE VIII. CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE CONSOLIDATIONS
AND MERGERS OF COMPANY AND SALES, LEASES AND......................... 43
SECTION 8.1. CONVEYANCES PERMITTED SUBJECT TO CERTAIN CONDITIONS........... 43
SECTION 8.2. RIGHTS AND DUTIES OF SUCCESSOR ENTITY......................... 43
SECTION 8.3. OFFICERS' CERTIFICATE AND OPINION OF COUNSEL.................. 43
ARTICLE IX. SUPPLEMENTAL INDENTURES................................................ 44
SECTION 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS............ 44
SECTION 9.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS............... 45
SECTION 9.3. EXECUTION OF SUPPLEMENTAL INDENTURES.......................... 46
SECTION 9.4. EFFECT OF SUPPLEMENTAL INDENTURES............................. 46
SECTION 9.5. CONFORMITY WITH TRUST INDENTURE ACT........................... 46
SECTION 9.6. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES............ 46
ARTICLE X. COVENANTS............................................................... 46
SECTION 10.1. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, INTEREST AND
ADDITIONAL AMOUNTS........................................... 46
SECTION 10.2. SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY............... 47
SECTION 10.3. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST............ 48
SECTION 10.4. EXISTENCE.................................................... 49
SECTION 10.5. MAINTENANCE OF PROPERTIES.................................... 49
SECTION 10.6. INSURANCE.................................................... 49
SECTION 10.7. PAYMENT OF TAXES AND OTHER CLAIMS............................ 50
SECTION 10.8. PROVISION OF FINANCIAL INFORMATION........................... 50
SECTION 10.9. STATEMENT AS TO COMPLIANCE................................... 50
SECTION 10.10. ADDITIONAL AMOUNTS.......................................... 50
SECTION 10.11. WAIVER OF CERTAIN COVENANTS................................. 51
ARTICLE XI. REDEMPTION OF SECURITIES............................................... 51
SECTION 11.1. APPLICABILITY OF ARTICLE..................................... 51
SECTION 11.2. ELECTION TO REDEEM; NOTICE TO TRUSTEE........................ 51
SECTION 11.3. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED............ 52
SECTION 11.4. NOTICE OF REDEMPTION......................................... 52
SECTION 11.5. DEPOSIT OF REDEMPTION PRICE.................................. 53
SECTION 11.6. SECURITIES PAYABLE ON REDEMPTION DATE........................ 53
SECTION 11.7. SECURITIES REDEEMED IN PART.................................. 54
ARTICLE XII. SINKING FUNDS......................................................... 54
SECTION 12.1. APPLICABILITY OF ARTICLE..................................... 54
SECTION 12.2. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES........ 55
SECTION 12.3. REDEMPTION OF SECURITIES FOR SINKING FUND.................... 55
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
TABLE OF CONTENTS (Continued)
PAGE
----
<S> <C>
ARTICLE XIII. REPAYMENT AT THE OPTION OF HOLDERS................................... 55
SECTION 13.1. APPLICABILITY OF ARTICLE..................................... 55
SECTION 13.2. REPAYMENT OF SECURITIES...................................... 56
SECTION 13.3. EXERCISE OF OPTION........................................... 56
SECTION 13.4. WHEN SECURITIES PRESENTED FOR REPAYMENT BECOME DUE AND
PAYABLE...................................................... 56
SECTION 13.5. SECURITIES REPAID IN PART.................................... 57
ARTICLE XIV. DEFEASANCE AND COVENANT DEFEASANCE.................................... 57
SECTION 14.1. APPLICABILITY OF ARTICLE; COMPANY'S OPTION TO EFFECT
DEFEASANCE OR COVENANT DEFEASANCE............................ 57
SECTION 14.2. DEFEASANCE................................................... 58
SECTION 14.3. COVENANT DEFEASANCE.......................................... 58
SECTION 14.4. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.............. 59
SECTION 14.5. DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE HELD
IN TRUST; OTHER MISCELLANEOUS PROVISIONS..................... 60
SECTION 14.6. REINSTATEMENT................................................ 61
ARTICLE XV. MEETINGS OF HOLDERS OF SECURITIES...................................... 61
SECTION 15.1. PURPOSES FOR WHICH MEETINGS MAY BE CALLED.................... 61
SECTION 15.2. CALL, NOTICE AND PLACE OF MEETINGS........................... 61
SECTION 15.3. PERSONS ENTITLED TO VOTE AT MEETINGS......................... 62
SECTION 15.4. QUORUM; ACTION............................................... 62
SECTION 15.5. DETERMINATION OF VOTING RIGHTS, CONDUCT AND ADJOURNMENT
OF MEETINGS.................................................. 63
SECTION 15.6. COUNTING VOTES AND RECORDING ACTION OF MEETINGS.............. 63
</TABLE>
iv
<PAGE> 6
PAN PACIFIC RETAIL PROPERTIES, INC.
Reconciliation and tie between Trust Indenture Act of 1939 (the "1939
Act") and Indenture dated as of _________________________.
<TABLE>
<CAPTION>
TRUST INDENTURE ACT SECTION INDENTURE SECTION
--------------------------- ------------------
<S> <C>
Section 310 (a)(1)............................... 607
(a)(2)............................... 607
(b).................................. 607, 608
Section 312...................................... 701
Section 313 (a).................................. 702, 703
(c).................................. 702
Section 314 (a).................................. 703
(a)(4)............................... 1009
(c)(1)............................... 102
(c)(2)............................... 102
(e).................................. 102
Section 315 (b).................................. 601
Section 316 (a) (last sentence).................. 101
("Outstanding")
(a)(1)(A)............................ 502, 512
(a)(1)(B)............................ 513
(b).................................. 508
Section 317 (a)(1)............................... 503
(a)(2)............................... 504
Section 318 (a).................................. 111
(c).................................. 111
</TABLE>
- ----------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
Attention should also be directed to Section 318(c) of the 1939 Act,
which provides that the provisions of Sections 310 to and including 317 of the
1939 Act are a part of and govern every qualified indenture, whether or not
physically contained therein.
v
<PAGE> 7
THIS INDENTURE, dated as of _______________, between PAN PACIFIC RETAIL
PROPERTIES, INC., a Maryland corporation (the "Company"), having its principal
office at 1631-B South Melrose Drive, Vista, California 92083, and
__________________________, a banking corporation organized under the laws the
State of ______________, as Trustee hereunder (the "Trustee"), having its
Corporate Trust Office at ______________________.
RECITALS OF THE COMPANY
The Company deems it necessary to issue from time to time for its lawful
purposes debt securities (hereinafter called the "Securities") evidencing its
indebtedness, and has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of the Securities, to be
issued in one or more series as provided in this Indenture.
This Indenture is subject to the provisions of the Trust Indenture Act
of 1939, as amended, that are deemed to be incorporated into this Indenture and
shall, to the extent applicable, be governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE I.
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. DEFINITIONS
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article One have the meanings assigned to
them in this Article One, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the TIA, either
directly or by reference therein, have the meanings assigned to them therein,
and the terms "cash transaction" and "self-liquidating paper," as used in TIA
Section 311, shall have the meanings assigned to them in the rules of the
Commission adopted under the TIA;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP; and
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act," when used with respect to any Holder, has the meaning specified
in Section 104.
<PAGE> 8
"Additional Amounts" means any additional amounts which are required by
a Security or by or pursuant to a Board Resolution, under circumstances
specified therein, to be paid by the Company in respect of certain taxes imposed
on certain Holders and which are owing to such Holders.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any authenticating agent appointed by the
Trustee pursuant to Section 611 to act on behalf of the Trustee to authenticate
Securities.
"Authorized Newspaper" means a newspaper, printed in the English
language or in an official language of the country of publication, customarily
published on each Business Day, whether or not published on Saturdays, Sundays
or holidays, and of general circulation in each place in connection with which
the term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any Business Day.
"Bankruptcy Law" has the meaning specified in Section 501.
"Bearer Security" means any Security established pursuant to Section 201
which is payable to bearer.
"Board of Directors" means the board of directors of the Company, or any
committee of that board duly authorized to act hereunder.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means, unless otherwise specified with respect to any
Securities pursuant to Section 301, any day, other than a Saturday or Sunday,
that is not a day on which banking institutions in The City of New York are
authorized or required by law, regulation or executive order to close or, when
used with respect to a Place of Payment (other than The City of New York) or any
other particular location referred to in this Indenture or in the Securities
(other than The City of New York), any day, other than a Saturday or Sunday,
that is not a day on which banking institutions in that Place of Payment or
particular location are authorized or required by law, regulation or executive
order to close.
"CEDEL" means Centrale de Livraison de Valeurs Mobilieres, S.A., or its
successor.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after execution of this instrument such Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties on such date.
"Common Depositary" shall have the meaning specified in Section 304.
"Common Stock" means, with respect to any Person, all shares of capital
stock issued by such Person other than Preferred Stock.
2
<PAGE> 9
"Company" means the Person named as the "Company" in the first paragraph
of this Indenture until a successor corporation shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by its Chairman of the Board,
Vice Chairman of the Board, President, or any Executive Vice President, Senior
Vice President or Vice President and by its Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary, and delivered to the Trustee.
"Conversion Event" means the cessation of use of (1) a Foreign Currency
both by the government of the country which issued such currency and for the
settlement of transactions by a central bank or other public institutions of or
within the international banking community, (2) the ECU both within the European
Monetary System and for the settlement of transactions by public institutions of
or within the European Communities, or (3) any currency unit (or composite
currency) other than the ECU for the purposes for which it was established.
"Corporate Trust Office" means the office of the Trustee at which, at
any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at _________________
__________________________.
"coupon" means any interest coupon appertaining to a Bearer Security.
"Custodian" has the meaning specified in Section 501.
"Defaulted Interest" has the meaning specified in Section 307.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"DTC" has the meaning specified in Section 304.
"ECU" means the European Currency Unit as defined and revised from time
to time by the Council of the European Communities.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, or its successor as operator of the Euroclear System.
"European Communities" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community.
"European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the European
Communities.
"Event of Default" has the meaning specified in Section 501.
"Exchange Date" shall have the meaning specified in Section 304.
"Foreign Currency" means any currency, currency unit or composite
currency, including, without limitation, the ECU, issued by the government of
one or more countries other than the United States of America or by any
recognized confederation or association of such governments.
"GAAP" means generally accepted accounting principles, as in effect from
time to time, as used in the United States applied on a consistent basis.
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"Global Security" means a security evidencing all or a part of a series
of Securities issued to and registered in the name of the depositary for such
series, or its nominee, in accordance with Section 305, and bearing the legend
prescribed in Section 203.
"Government Obligations" means Securities which are (1) direct
obligations of the United States or the government which issued the Foreign
Currency in which the Securities of a particular series are payable, for the
payment of which its full faith and credit is pledged or (2) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality of
the United States or such government which issued the Foreign Currency in which
the Securities of such series are payable, the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States or such other government, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust company as custodian with respect
to any such Government Obligation or a specific payment of interest on or
principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt; PROVIDED, HOWEVER, that (except
as required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the Government Obligation or the
specific payment of interest on or principal of the Government Obligation
evidenced by such depository receipt.
"Holder" means, in the case of a Registered Security, the Person in
whose name a Security is registered in the Security Register and, in the case of
a Bearer Security, the bearer thereof and, when used with respect to any coupon,
shall mean the bearer thereof.
"Indenture" means this instrument as originally executed or as it may be
supplemented or amended from time to time by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, and shall
include the terms of particular series of Securities established as contemplated
by Section 301; PROVIDED, HOWEVER, that, if at any time more than one Person is
acting as Trustee under this instrument, "Indenture" shall mean, with respect to
any one or more series of Securities for which such Person is Trustee, this
instrument as originally executed or as it may be supplemented or amended from
time to time by one or more indentures supplemental hereto entered into pursuant
to the applicable provisions hereof and shall include the terms of the, or
those, particular series of Securities for which such Person is Trustee
established as contemplated by Section 301, exclusive, however, of any
provisions or terms which relate solely to other series of Securities for which
such Person is not Trustee, regardless of when such terms or provisions were
adopted, and exclusive of any provisions or terms adopted by means of one or
more indentures supplemental hereto executed and delivered after such Person had
become such Trustee but to which such Person, as such Trustee, was not a party.
"Indexed Security" means a Security the terms of which provide that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"Interest," when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity, and, when used with respect to a Security which provides
for the payment of Additional Amounts pursuant to Section 1010, includes such
Additional Amounts.
"Interest Payment Date," when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment or otherwise.
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"Officers' Certificate" means a certificate signed by the Chairman of
the Board of Directors, Vice Chairman of the Board, President, or any Executive
Vice President, Senior Vice President or Vice President and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company or who may be an employee of or other counsel for the
Company and who shall be reasonably satisfactory to the Trustee.
"Original Issue Discount Security" means any Security which provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities therefore authenticated and delivered
under this Indenture, EXCEPT:
(1) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(2) Securities, or portions thereof, for whose payment or redemption
(including repayment at the option of the Holder) money in the necessary amount
has been theretofore been deposited with the Trustee or any Paying Agent (other
than the Company) in trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the Holders of such
Securities and any coupons appertaining thereto; PROVIDED, HOWEVER, that, if
such Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;
(3) Securities, except to the extent provided in Sections 1402 and
1403, with respect to which the Company has effected defeasance and/or covenant
defeasance as provided in Article Fourteen;
(4) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in respect
of which there shall have been presented to the Trustee proof satisfactory to it
that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company; and
(5) Securities converted into Common Stock or Preferred Stock
pursuant to or in accordance with this Indenture if the terms of such Securities
provide for convertibility pursuant to Section 301;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculation required by TIA Section 313, (i) the principal amount of an Original
Issue Discount Security that may be counted in making such determination or
calculation and that shall be deemed to be Outstanding for such purpose shall be
equal to the amount of principal thereof that would be (or shall have been
declared to be) due and payable, at the time of such determination, upon a
declaration of acceleration of the maturity thereof pursuant to Section 502,
(ii) the principal amount of any Security denominated in a Foreign Currency that
may be counted in making such determination or calculation and that shall be
deemed Outstanding for such purpose shall be equal to the Dollar equivalent,
determined pursuant to Section 301 as of the date such Security is originally
issued by the Company, of the principal amount (or, in the case of an Original
Issue Discount Security, the Dollar equivalent as of such date of original
issuance of the amount determined as provided in clause (i) above) of such
Security, (iii) the principal amount of any Indexed Security that may be counted
in making such determination or calculation and that shall be deemed outstanding
for such purpose shall be equal to the principal face amount of such Indexed
Security
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at original issuance, unless otherwise provided with respect to such Security
pursuant to Section 301, and (iv) Securities owned by the Company or of any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in making such
calculation or in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which the Trustee knows to
be so owned shall be so disregarded. Securities owned as provided in clause (iv)
above which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the Company
or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities or coupons on
behalf of the Company.
"Person" means any individual, corporation, business trust, partnership,
joint venture, association, joint-stock company, trust, limited liability
company, limited liability partnership, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of or
within any series, means the place or places where the principal of (and
premium, if any) and interest on such Securities are payable as specified as
contemplated by Sections 301 and 1002.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
"Preferred Stock" means, with respect to any Person, all capital stock
issued by such Person that are entitled to a preference or priority over any
other capital stock issued by such Person with respect to any distribution of
such Person's assets, whether by dividend or upon any voluntary or involuntary
liquidation, dissolution or winding up.
"Redemption Date," when used with respect to any Security to be
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Security" shall mean any Security which is registered in the
Security Register.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Registered Securities of or within any series means the date
specified for that purpose as contemplated by Section 301, whether or not a
Business Day.
"Repayment Date" means, when used with respect to any Security to be
repaid at the option of the Holder, the date fixed for such repayment by or
pursuant to this Indenture.
"Responsible Officer," when used with respect to the Trustee, means the
chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president (whether or not designated by a number or a word
or words added before or after the title "vice president"), the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
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or any other officer of the Trustee customarily performing functions similar to
those performed by any of the above-designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of such officer's knowledge and familiarity with the
particular subject.
"Security" has the meaning stated in the first recital of this Indenture
and, more particularly, means any Security or Securities authenticated and
delivered under this Indenture; PROVIDED, HOWEVER, that, if at any time there is
more than one Person acting as Trustee under this Indenture, "Securities" with
respect to the Indenture as to which such Person is Trustee shall have the
meaning stated in the first recital of this Indenture and shall more
particularly mean Securities authenticated and delivered under this Indenture,
exclusive, however, of Securities of any series as to which such Person is not
Trustee.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Significant Subsidiary" has the meaning ascribed to such term in Rule
1-02 of Regulation S-X promulgated under the Securities Act of 1933, as amended,
as such Regulation was in effect on January 1, 1996.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of or within any series means a date fixed by the Company
pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" means, with respect to the Company, any other Person of
which more than 50% of (i) the equity or other ownership interests or (ii) the
total voting power of shares of capital stock or other ownership interests
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers, trustees or general or managing partners
thereof is at the time owned by the Company or one or more of the other
Subsidiaries of the Company or a combination thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended and as in force at the date as of which this Indenture was executed,
except as provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this Indenture until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
or include each Person who is then a Trustee hereunder; PROVIDED, HOWEVER, that
if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean only the Trustee with respect
to Securities of that series.
"United States" means, unless otherwise specified with respect to any
Securities pursuant to Section 301, the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"United States Person" means, unless otherwise specified with respect to
any Securities pursuant to Section 301, an individual who is a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States, an estate the
income of which is subject to United States federal income taxation regardless
of its source or a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more United
States fiduciaries have the authority to control all substantial decisions of
the trust.
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"Yield to Maturity" means, with respect to any Original Issue Discount
Security, the yield to maturity, computed at the time of issuance of such
Security (or, if applicable, at the most recent redetermination of interest on
such Security) and as set forth in such Security in accordance with generally
accepted United States bond yield computation principles.
SECTION 1.2. COMPLIANCE CERTIFICATES AND OPINIONS
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (including certificates delivered
pursuant to Section 1009) shall include:
(a) a statement that each individual signing such certificate or opinion
has read such condition or covenant and the definitions herein relating thereto;
(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 each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such condition or covenant has been
complied with; and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 1.3. FORM OF DOCUMENTS DELIVERED TO TRUSTEE
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion as to some matters and one or more
other such Persons as to other matters, and any such Person may certify or give
an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise or reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows that the certificate,
opinion or representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
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SECTION 1.4. ACTS OF HOLDERS
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders of
the Outstanding Securities of all series or one or more series, as the case may
be, may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Holders in person or by agents duly appointed in
writing. If Securities of a series are issuable as Bearer Securities, any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders of Securities
of such series may, alternatively, be embodied in and evidenced by the record of
Holders of Securities of such series voting in favor thereof, either in person
or by proxies duly appointed in writing, at any meeting of Holders of Securities
of such series duly called and held in accordance with the provisions of Article
Fifteen, or a combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company. Such instrument or
instruments and any such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments or so voting at any such meeting. Proof of
execution of any such instrument or of a writing appointing any such agent, or
of the holding by any Person of a Security, shall be sufficient for any purpose
of this Indenture and conclusive in favor of the Trustee and the Company and any
agent of the Trustee or the Company, if made in the manner provided in this
Section 104. The record of any meeting of Holders of Securities shall be proved
in the manner provided in Section 1506.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other reasonable manner which the Trustee deems sufficient.
The ownership of Registered Securities shall be proved by the Security
Register. As to any matter relating to beneficial ownership interests in any
Global Security, the records of the appropriate depositary and of participants
in such depositary shall be dispositive for purposes of this Indenture.
The ownership of Bearer Securities may be proved by the production of
such Bearer Securities or by a certificate executed, as depositary, by any trust
company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the Person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (1) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced or (2) such
Bearer Security is produced to the Trustee by some other Person or (3) such
Bearer Security is surrendered in exchange for a Registered Security or (4) such
Bearer Security is no longer Outstanding. The ownership of Bearer Securities may
also be proved in any other manner which the Trustee deems sufficient.
If the Company shall solicit from the Holders of Registered Securities
any request, demand, authorization, direction, notice, consent, waiver or other
Act, the Company may, at its option, in or pursuant to a Board Resolution, fix
in advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Notwithstanding TIA Section
316(c), such record date shall be the record date specified in or pursuant to
such Board Resolution, which shall be a date not earlier than the
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<PAGE> 16
date 30 days prior to the first solicitation of Holders generally in connection
therewith and not later than the date such solicitation is completed. If such a
record date is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other Act may be given before or after such record date, but
only the Holders of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of Outstanding Securities have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding Securities shall be
computed as of such record date; PROVIDED, HOWEVER, that no such authorization,
agreement or consent by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later then eleven months after the record date.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee, any Security
Registrar, any Paying Agent, any Authenticating Agent or the Company in reliance
thereon, whether or not notation of such action is made upon such Security.
SECTION 1.5. NOTICES, ETC., TO TRUSTEE AND COMPANY
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(a) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or with
the Trustee at its Corporate Trust Office; or
(b) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed to it
at the address of its principal office specified in the first paragraph of this
Indenture or at any other address previously furnished in writing to the Trustee
by the Company, Attention: Chief Financial Officer (with a copy to the Company's
general counsel); or
(c) either the Trustee or the Company, by the other party shall be
sufficient for every purpose hereunder if given by facsimile transmission,
receipt confirmed by telephone followed by an original copy delivered by
guaranteed overnight courier; if to the Trustee at facsimile number (___)
________; and if to the Company at facsimile number (___) ________.
SECTION 1.6. NOTICE TO HOLDERS; WAIVER
Where this Indenture provides for notice of any event to Holders of
Registered Securities by the Company or the Trustee, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each such Holder affected by such
event, at his address as it appears in the Security Register, not later than the
latest date, and not earlier than the earliest date, if any, prescribed for the
giving of such notice. In any case where notice to Holders of Registered
Securities is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders of Registered
Securities or the sufficiency of any notice to Holders of Bearer Securities
given as provided herein. Any notice mailed to a Holder in the manner herein
prescribed shall be conclusively deemed to have been received by such Holder,
whether or not such Holder actually receives such notice.
If by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification to Holders of Registered Securities as
shall be made with the approval of the Trustee shall constitute a sufficient
notification to such Holders for every purpose hereunder.
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Except as otherwise expressly provided herein or otherwise specified
with respect to any Securities pursuant to Section 301, where this Indenture
provides for notice to Holders of Bearer Securities of any event, such notice
shall be sufficiently given if published in an Authorized Newspaper in the City
of New York and in such other city or cities as may be specified in such
Securities on a Business Day, such publication to be not later than the latest
date, and not earlier than the earliest date, if any, prescribed for the giving
of such notice. Any such notice shall be deemed to have been given on the date
of such publication or, if published more than once, on the date of the first
such publication.
If by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to any particular Holder of Bearer Securities as provided above, nor
any defect in any notice so published, shall affect the sufficiency of such
notice with respect to other Holders of Bearer Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 1.7. COUNTERPARTS; EFFECT OF HEADINGS AND TABLE OF CONTENTS
This Indenture may be executed in any number of counterparts, each of
which when executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 1.8. SUCCESSORS AND ASSIGNS
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 1.9. SEVERABILITY CLAUSE
In case any provision in this Indenture or in any Security or coupon
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 1.10. BENEFITS OF INDENTURE
Nothing in this Indenture or in the Securities or coupons, express or
implied, shall give to any Person, other than the parties hereto, any Security
Registrar, any Paying Agent, any Authenticating Agent and their successors
hereunder and the Holders any benefit or any legal or equitable right, remedy or
claim under this Indenture.
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SECTION 1.11. GOVERNING LAW
This Indenture and the Securities and coupons shall be governed by and
construed in accordance with the law of the State of New York without regard, to
the extent permitted by law, to conflicts of laws principles. This Indenture is
subject to the provisions of the TIA that are required to be part of this
Indenture and shall, to the extent applicable, be governed by such provisions.
SECTION 1.12. LEGAL HOLIDAYS
In any case where any Interest Payment Date, Redemption Date, Repayment
Date, sinking fund payment date, Stated Maturity or Maturity of any Security or
the last date on which a Holder has the right to convert or exchange a Security
shall not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture or any Security or coupon other than a
provision in the Securities of any series which specifically states that such
provision shall apply in lieu hereof), payment of interest or any Additional
Amounts or principal (and premium, if any) or conversion or exchange of such
security need not be made at such Place of Payment on such date, but (except as
otherwise provided with respect to such Security) may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date, Redemption Date, Repayment Date or
sinking fund payment date, or at the Stated Maturity or Maturity, or on such
last day of conversion or exchange, provided that no interest shall accrue on
the amount so payable for the period from and after such Interest Payment Date,
Redemption Date, Repayment Date, sinking fund payment date, Stated Maturity or
Maturity, as the case may be.
SECTION 1.13. IMMUNITY OF STOCKHOLDERS, DIRECTORS, OFFICERS AND AGENTS OF
THE COMPANY
No recourse under or upon any obligation, covenant or agreement
contained in this Indenture, or in any Security, or because of any indebtedness
evidenced thereby, shall be had against any past, present or future stockholder,
employee, officer or director, as such, of the Company or of any successor,
either directly or through the Company or any successor, under any rule of law,
statute or constitutional provision or by the enforcement of any assessment or
by any legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance of the Securities by the Holders
and as part of the consideration for the issue of the Securities.
SECTION 1.14. CONFLICT WITH TRUST INDENTURE ACT
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required or deemed to be included in this Indenture by
any of the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.
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ARTICLE II.
SECURITIES FORMS
SECTION 2.1. FORMS OF SECURITIES
The Registered Securities, if any, of each series and the Bearer
Securities, if any, of each series and related coupons shall be in the form
established in one or more indentures supplemental hereto or approved from time
to time by or pursuant to a Board Resolution, shall have such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by or pursuant to this Indenture or any indenture supplemental hereto,
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements placed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Securities may be listed, or to conform to usage.
Unless otherwise specified as contemplated by Section 301, Bearer
Securities shall have interest coupons attached.
Subject to Section 304, the definitive Securities and coupons shall be
printed, lithographed or engraved, or produced by any combination of these
methods, on a steel engraved border or steel engraved borders or mechanically
reproduced on safety paper or may be produced in any other manner, all as
determined by the officers of the Company executing such Securities or coupons,
as evidenced by their execution of such Securities or coupons.
SECTION 2.2. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Subject to Section 611, the Trustee's certificate of authentication
shall be in substantially the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
-----------------------------------,
as Trustee
Dated: By:
-------------------------------- --------------------------------
Authorized Signatory
SECTION 2.3. SECURITIES ISSUABLE IN GLOBAL FORM
If Securities of or within a series are issuable in the form of one or
more Global Securities, any such Global Security or Securities may provide that
it or they shall represent the aggregate amount of all Outstanding Securities of
such series (or such lesser amount as is permitted by the terms thereof) from
time to time endorsed thereon and may also provide that the aggregate amount of
Outstanding Securities of such series represented thereby may from time to time
be increased or decreased to reflect exchanges. Any endorsement of any Global
Security to reflect the amount, or any increase or decrease in the amount, of
Outstanding Securities represented thereby shall be made by the Trustee in such
manner or by such Person or Persons as shall be specified therein or in the
Company Order to be delivered to the Trustee pursuant to Section 303 or 304.
Subject to the provisions of Section 303 and, if applicable, Section 304, the
Trustee shall deliver and redeliver any Global Security in permanent global form
in the manner and upon instructions given by the Person or Persons specified
therein or in the applicable Company Order. If a
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Company Order pursuant to Section 303 or 304 has been, or simultaneously is,
delivered, any instructions by the Company with respect to endorsement or
delivery or redelivery of a Global Security shall be in writing but need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Global Security if such Security was never issued and
sold by the Company and the Company delivers to the Trustee the Global Security
together with written instructions (which need not comply with Section 102 and
need not be accompanied by an Opinion of Counsel) with regard to the reduction
in the principal amount of Securities represented thereby, together with the
written statement contemplated by the last sentence of Section 303.
Notwithstanding the provisions of Section 307, unless otherwise
specified as contemplated by Section 301, payment of principal of and any
premium and interest on any Global Security shall be made to the Person or
Persons specified therein.
Notwithstanding the provisions of Section 308 and except as provided in
the preceding paragraph, the Company, the Trustee and any agent of the Company
and the Trustee shall treat as the Holder of such principal amount of
Outstanding Securities represented by a permanent Global Security (1) in the
case of a permanent Global Security in registered form, the Holder of such
permanent Global Security in registered form or (2) in the case of a permanent
Global Security in bearer form, Euroclear or CEDEL.
Any Global Security authenticated and delivered hereunder shall bear a
legend, in addition to any other legend or legends permitted by Section 201, in
substantially the following form:
This Security is a Global Security within the meaning set forth
in the Indenture hereinafter referred to and is registered in the
name of a depositary or a nominee of a 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, unless and until
it is exchanged for Securities in definitive form as aforesaid,
may not be transferred except as a whole by the depositary to a
nominee of the depositary or by a nominee of the depositary to
the depositary or another nominee of the depositary or by the
depositary or its nominee to a successor depositary or its
nominee.
ARTICLE III.
THE SECURITIES
SECTION 3.1. AMOUNT UNLIMITED; ISSUABLE IN SERIES
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in one or more Board Resolutions or pursuant to authority granted by
one or more Board Resolutions and, subject to Section 303, set forth in an
Officers' Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Securities of any series:
(a) the title of the Securities of the series (which shall distinguish
the Securities of such series from all other series of Securities);
(b) 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 304, 305, 306, 906, 1107 or 1305);
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(c) the date or dates, or the method by which such date or dates will be
determined, on which the principal of the Securities of the series shall be
payable;
(d) the rate or rates at which the Securities of the series shall bear
interest, if any, or the method by which such rate or rates shall be determined,
the date or dates from which such interest shall accrue or the method by which
such date or dates shall be determined, the Interest Payment Dates on which such
interest will be payable and the Regular Record Date, if any, for the interest
payable on any Registered Security on any Interest Payment Date, or the method
by which such date shall be determined, and the basis upon which interest shall
be calculated if other than that of a 360-day year of twelve 30-day months;
(e) the place or places where the principal of (and premium, if any),
interest, if any, on, and Additional Amounts, if any, payable in respect of,
Securities of the series shall be payable, any Registered Securities of the
series may be surrendered for registration of transfer, exchange or conversion
and notices or demands to or upon the Company in respect of the Securities of
the series and this Indenture may be served;
(f) the period or periods within which, the price or prices at which,
the currency or currencies, currency unit or units or composite currency or
currencies in which, and other terms and conditions upon which Securities of the
series may be redeemed, in whole or in part, at the option of the Company, if
the Company is to have the option;
(g) the obligation, if any, of the Company to redeem, repay or purchase
Securities of the series pursuant to any sinking fund or analogous provision or
at the option of a Holder thereof, and the period or periods within which or the
date or dates on which, the price or prices at which, the currency or
currencies, currency unit or units or composite currency or currencies in which,
and other terms and conditions upon which Securities of the series shall be
redeemed, repaid or purchased, in whole or in part, pursuant to such obligation;
(h) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Securities of the series shall be
issuable;
(i) if other than the Trustee, the identity of each Security Registrar
and/or Paying Agent;
(j) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series that shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502 or,
if applicable, the portion of the principal amount of Securities of the series
that is convertible in accordance with the provisions of this Indenture, or the
method by which such portion shall be determined;
(k) if other than Dollars, the Foreign Currency or Currencies in which
payment of the principal of (and premium, if any) and interest or Additional
Amounts, if any, on the Securities of the series shall be payable or in which
the Securities of the series shall be denominated and the manner of determining
the equivalent thereof in Dollars for purposes of the definition of
"Outstanding" in Section 101;
(l) whether the amount of payments of principal of (and premium, if any)
or interest, if any, on the Securities of the series may be determined with
reference to an index, formula or other method (which index, formula or method
may be based, without limitation, on one or more currencies, currency units,
composite currencies, commodities, equity indices or other indices), and the
manner in which such amounts shall be determined;
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(m) whether the principal of (and premium, if any) or interest or
Additional Amounts, if any, on the Securities of the series are to be payable,
at the election of the Company or a Holder thereof, in a currency or currencies,
currency unit or units or composite currency or currencies other than that in
which such Securities are denominated or stated to be payable, the period or
periods within which, and the terms and conditions upon which, such election may
be made, and the time and manner of, and identity of the exchange rate agent
with responsibility for, determining the exchange rate between the currency or
currencies, currency unit or units or composite currency or currencies in which
such Securities are denominated or stated to be payable and the currency or
currencies, currency unit or units or composite currency or currencies in which
such Securities are to be so payable;
(n) provisions, if any, granting special rights to the Holders of
Securities of the series upon the occurrence of such events as may be specified;
(o) any deletions from, modifications of or additions to the defined
terms, Events of Default or covenants of the Company or other provisions of this
Indenture with respect to Securities of the series, whether or not such defined
terms, Events of Default, covenants or other provisions are consistent with the
defined terms, Events of Default, covenants or other provisions set forth
herein;
(p) whether Securities of the series are to be issuable as Registered
Securities, Bearer Securities (with or without coupons) or both, any
restrictions applicable to the offer, sale or delivery of Bearer Securities and
the terms upon which Bearer Securities of the series may be exchanged for
Registered Securities of the series and vice versa (if permitted by applicable
laws and regulations), whether any Securities of the series are to be issuable
initially in temporary global form and whether any Securities of the series are
to be issuable in permanent global form with or without coupons and, if so,
whether beneficial owners of interests in any such permanent Global Security may
exchange such interests for Securities of such series and of like tenor of any
authorized form and denomination and the circumstances under which any such
exchanges may occur, if other than in the manner provided in Section 305, and,
if Registered Securities of the series are to be issuable as a Global Security,
the identity of the depositary for such series;
(q) the date as of which any Bearer Securities of the series and any
temporary Global Security representing Outstanding Securities of the series
shall be dated if other than the date of original issuance of the first Security
of the series to be issued;
(r) the Person to whom any interest on any Registered Security of the
series shall be payable, if other than the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, the manner in which, or the Person
to whom, any interest on any Bearer Security of the series shall be payable, if
otherwise than upon presentation and surrender of the coupons appertaining
thereto as they severally mature, and the extent to which, or the manner in
which, any interest payable on a temporary Global Security on an Interest
Payment Date will be paid if other than in the manner provided in Section 304;
(s) the applicability, if any, of Sections 1402 and/or 1403 to the
Securities of the series and any provisions in modification of, in addition to
or in lieu of any of the provisions of Article Fourteen;
(t) if the Securities of such series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary Security of
such series) only upon receipt of certain certificates or other documents or
satisfaction of other conditions, then the form and/or terms of such
certificates, documents or conditions;
(u) if the Securities of the series are to be issued upon the exercise
of warrants, the time, manner and place for such Securities to be authenticated
and delivered;
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(v) whether and under what circumstances the Company will pay Additional
Amounts as contemplated by Section 1010 on the Securities of the series to any
Holder who is not a United States Person (including any modification to the
definition of such term) in respect of any tax, assessment or governmental
charge and, if so, whether the Company will have the option to redeem such
Securities rather than pay such Additional Amounts (and the terms of any such
option);
(w) the obligation, if any, of the Company to permit the conversion of
the Securities of such series into the Company's Common Stock or Preferred
Stock, as the case may be, and the terms and conditions upon which such
conversion shall be effected (including, without limitation, the initial
conversion price or rate, the conversion period, any adjustment of the
applicable conversion price and any requirements relative to the reservation of
such shares for purposes of conversion) and applicable limitations on the
ownership or transferability of the Common Stock or Preferred Stock into which
such Securities are convertible; and
(x) any other terms of the series.
All Securities of any one series and the coupons appertaining to any
Bearer Securities of such series shall be substantially identical except, in the
case of Registered Securities, as to denomination and except as may otherwise be
provided in or pursuant to such Board Resolution and set forth in such Officers'
Certificate or in any such indenture supplemental hereto. All Securities of any
one series need not be issued at the same time and, unless otherwise provided, a
series may be reopened, without the consent of the Holders, for issuances of
additional Securities of such series.
If any of the form or terms of the Securities of any series are
established by action taken pursuant to one or more Board Resolutions, a copy of
an appropriate record of such action(s) shall be certified by the Secretary or
an Assistant Secretary of the Company and delivered to the Trustee at or before
the delivery of the Officers' Certificate setting forth the terms of the
Securities of such series.
SECTION 3.2. DENOMINATIONS
The Securities of each series shall be issuable in such denominations as
shall be specified as contemplated by Section 301. With respect to Securities of
any series denominated in Dollars, in the absence of any such provisions with
respect to the Securities or any series, the Securities of such series shall be
issuable in denominations of $1,000 and any integral multiple thereof.
SECTION 3.3. EXECUTION, AUTHENTICATION, DELIVERY AND DATING
The Securities and any coupons appertaining thereto shall be executed on
behalf of the Company by its Chairman of the Board, Vice Chairman of the Board,
President or one of its Executive Vice Presidents, Senior Vice Presidents or
Vice Presidents, under its corporate seal (or a facsimile thereof), and attested
by its Secretary or Treasurer or one of its Assistant Secretaries or an
Assistant Treasurer. The signature of any of these officers on the Securities
and coupons may be manual or facsimile signatures of the present or any future
such authorized officer and may be imprinted or otherwise reproduced on the
Securities.
Securities or coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices before the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities or coupons.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series, together with
any coupons appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and
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deliver such Securities; PROVIDED, HOWEVER, that, in connection with its
original issuance, no Bearer Security shall be mailed or otherwise delivered to
any location in the United States; and PROVIDED FURTHER that, unless otherwise
specified with respect to any series of Securities pursuant to Section 301, a
Bearer Security may be delivered in connection with its original issuance only
if the Person entitled to receive such Bearer Security shall have furnished a
certificate to Euroclear or CEDEL, as the case may be, in substantially the form
set forth in Exhibit A-1 to this Indenture or such other certificate as may be
specified with respect to any series of Securities pursuant to Section 301,
dated no earlier than 15 days before the earlier of the date on which such
Bearer Security is delivered and the date on which any temporary Security first
becomes exchangeable for such Bearer Security in accordance with the terms of
such temporary Security and this Indenture. If any Security shall be represented
by a permanent global Bearer Security, then, for purposes of this Section 303
and Section 304, the notation of a beneficial owner's interest therein upon
original issuance of such Security or upon exchange of a portion of a temporary
Global Security shall be deemed to be delivery in connection with its original
issuance of such beneficial owner's interest in such permanent Global Security.
Except as permitted by Section 306, the Trustee shall not authenticate and
deliver any Bearer Security unless all appurtenant coupons for interest then
matured have been detached and cancelled.
If all the Securities of any series are not to be issued at one time and
if the terms of such series as established in or pursuant to a Board Resolution
or supplemental indenture shall so permit, such Company Order may set forth
procedures acceptable to the Trustee for the issuance of such Securities and
determining the terms of particular Securities of such series, such as interest
rate or formula, maturity date, date of issuance and date from which interest
shall accrue.
In authenticating Securities of any series, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to TIA Section 315(a) through
315(d)) shall be fully protected in relying upon,
(a) an Opinion of Counsel stating that:
(i) the form or forms of such Securities and any coupons have been
established in conformity with the provisions of this Indenture;
(ii) the terms of such Securities and any coupons have been
established in conformity with the provisions of this Indenture; and
(iii) such Securities, together with any coupons appertaining
thereto, when completed by appropriate insertions and executed and
delivered by the Company to the Trustee for authentication in accordance
with this Indenture, authenticated and delivered by the Trustee in
accordance with this Indenture and issued by the Company in the manner
and subject to any conditions specified in such Opinion of Counsel, will
constitute legal, valid and binding obligations of the Company,
enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization and other
similar laws of general applicability relating to or affecting the
enforcement of creditors' rights generally and to general equitable
principles; and
(b) an Officers' Certificate stating that all conditions precedent
provided for in this Indenture relating to the issuance of the Securities have
been complied with and that, to the best of the knowledge of the signers of such
certificate, no Event of Default with respect to any of the Securities shall
have occurred and be continuing.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will adversely affect the Trustee's own rights,
duties, obligations or immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee.
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Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all the Securities of any series are not to be issued at one time,
it shall not be necessary to deliver an Officers' Certificate otherwise required
pursuant to Section 301 or a Company Order or an Opinion of Counsel or an
Officers' Certificate otherwise required pursuant to the preceding paragraph at
the time of issuance of each Security of such series, but such order, opinion
and certificates, with appropriate modifications to cover such future issuances,
shall be delivered at or before the time of issuance of the first Security of
such series.
Each Registered Security shall be dated the date of its authentication
and each Bearer Security shall be dated as of the date specified as contemplated
by Section 301.
No Security or coupon shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security or Security to which such coupon appertains a certificate of
authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of an authorized signatory, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such
security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture. Notwithstanding the foregoing, if any Security
(including a Global Security) shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as provided in Section 309
together with a written statement (which need not comply with Section 102 and
need not be accompanied by an Opinion of Counsel) stating that such Security has
never been issued and sold by the Company, for all purposes of this Indenture
such Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
SECTION 3.4. TEMPORARY SECURITIES
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form, or, if authorized, in bearer form with one or
more coupons or without coupons, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as conclusively evidenced by their execution of such
Securities. In the case of Securities of any series, such temporary Securities
may be in global form.
Except in the case of temporary Securities (which shall be exchanged as
otherwise provided herein or as otherwise provided in or pursuant to a Board
Resolution or supplemental indenture), if temporary Securities of any series are
issued, the Company will cause definitive Securities of that series to be
prepared without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company in a
Place of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities of any series
(accompanied by any nonmatured coupons appertaining thereto), the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Securities of the same series of authorized
denominations; PROVIDED, HOWEVER, that no definitive Bearer Security shall be
delivered in exchange for a temporary Registered Security; and PROVIDED FURTHER
that a definitive Bearer Security shall be delivered in exchange for a temporary
Bearer Security only in compliance with the conditions set forth in Section 303.
Until so exchanged, the temporary Securities of any series shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
of such series.
Unless otherwise provided in or pursuant to a Board Resolution, the
following provisions of this Section 304 shall govern the exchange of temporary
Securities other than through the facilities of The Depository Trust Company
("DTC"). If any such temporary Security is issued in global form, then such
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temporary Global Security shall, unless otherwise provided therein, be delivered
to the London office of a depositary or common depositary (the "Common
Depositary"), for the benefit of Euroclear and CEDEL, for credit to the
respective accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary Global
Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities, in aggregate principal amount equal to the principal
amount of such temporary Global Security, executed by the Company. On or after
the Exchange Date, such temporary Global Security shall be surrendered by the
Common Depositary to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary Global Security, an equal aggregate principal
amount of definitive Securities of the same series of authorized denominations
and of like tenor as the portion of such temporary Global Security to be
exchanged. The definitive Securities to be delivered in exchange for any such
temporary Global Security shall be in bearer form, registered form, permanent
global bearer form or permanent global registered form, or any combination
thereof, as specified as contemplated by Section 301, and, if any combination
thereof is so specified, as requested by the beneficial owner thereof; PROVIDED,
HOWEVER, that, unless otherwise specified in such temporary Global Security,
upon such presentation by the Common Depositary, such temporary Global Security
is accompanied by a certificate dated the Exchange Date or a subsequent date and
signed by Euroclear as to the portion of such temporary global security held for
its account then to be exchanged and a certificate dated the Exchange Date or a
subsequent date and signed by CEDEL as to the portion of such temporary Global
Security held for its account then to be exchanged, each in the form set forth
in Exhibit A-2 to this Indenture or in such other form as may be established
pursuant to Section 301; and PROVIDED FURTHER that definitive Bearer Securities
shall be delivered in exchange for a portion of a temporary Global Security only
in compliance with the requirements of Section 303.
Unless otherwise specified in such temporary Global Security, the
interest of a beneficial owner of Securities of a series in a temporary Global
Security shall be exchanged for definitive Securities of the same series and of
like tenor following the Exchange Date when the account holder instructs
Euroclear or CEDEL, as the case may be, to request such exchange on his behalf
and delivers to Euroclear or CEDEL, as the case may be, a certificate in the
form set forth in Exhibit A-2 to this Indenture (or in such other form as may be
established pursuant to Section 301), dated no earlier than 15 days prior to the
Exchange Date, copies of which certificate shall be available from the offices
of Euroclear and CEDEL, the Trustee, any Authenticating Agent appointed for such
series of Securities and each Paying Agent. Unless otherwise specified in such
temporary Global Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary Global Security, except that a Person
receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like unless such Person takes delivery of such definitive
Securities in person at the offices of Euroclear or CEDEL. Definitive Securities
in bearer form to be delivered in exchange for any portion of a temporary Global
Security shall be delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 301, interest payable on a temporary Global
Security on an Interest Payment Date for Securities of such series occurring
prior to the applicable Exchange Date shall be payable to Euroclear and CEDEL on
such Interest Payment Date upon delivery by Euroclear and CEDEL to the Trustee
of a certificate or certificates in the form set forth in Exhibit A-2 to this
Indenture (or in such other forms as may be established pursuant to Section
301), for credit without further interest on or after such Interest Payment Date
to the respective accounts of Persons who are the beneficial owners of such
temporary Global Security on such Interest Payment Date and who have each
delivered to Euroclear or CEDEL, as the case may be, a certificate dated no
earlier than 15 days prior to the Interest Payment Date occurring prior to such
Exchange Date in the form set forth in Exhibit A-2 to this Indenture (or in such
other forms as may be
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established pursuant to Section 301). Notwithstanding anything to the contrary
herein contained, the certifications made pursuant to this paragraph shall
satisfy the certification requirements of the preceding two paragraphs and of
the third paragraph or Section 303 and the interests of the Persons who are the
beneficial owners of the temporary Global Security with respect to which such
certification was made will be exchanged for definitive Securities of the same
series and of like tenor on the Exchange Date or the date of certification if
such date occurs after the Exchange Date, without further act or deed by such
beneficial owners. Except as otherwise provided in this paragraph, no payments
of principal or interest owing with respect to a beneficial interest in a
temporary Global Security will be made unless and until such interest in such
temporary Global Security shall have been exchanged for an interest in a
definitive Security. Any interest so received by Euroclear and CEDEL and not
paid as herein provided shall be returned to the Trustee prior to the expiration
of two years after such Interest Payment Date in order to be repaid to the
Company.
SECTION 3.5. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee or in any office or agency of the Company in a Place of Payment a
register for each series of Securities (the registers maintained in such office
or in any such office or agency of the Company in a Place of Payment being
herein sometimes referred to collectively as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Securities and of transfers of Securities. The
Security Register shall be in written form or any other form capable of being
converted into written form within a reasonable time. The Trustee, at its
Corporate Trust Office, is hereby initially appointed "Security Registrar" for
the purpose of registering Securities and transfers of Securities on such
Security Register as herein provided. If the Trustee shall cease to be Security
Registrar, it shall have the right to examine the Security Register at all
reasonable times.
Subject to the provisions of this Section 305, upon surrender for
registration of transfer of any Registered Security of any series at any office
or agency of the Company in a Place of Payment for that series, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of the same
series, of any authorized denominations and of a like aggregate principal
amount, bearing a number not contemporaneously outstanding, and containing
identical terms and provisions.
Subject to the provisions of this Section 305, at the option of the
Holder, Securities of any series may be exchanged for other Securities of the
same series, of any authorized denomination or denominations and of a like
aggregate principal amount, containing identical terms and provisions, upon
surrender of the Securities to be exchanged at any such office or agency.
Whenever any such Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive. Unless otherwise
specified with respect to any series of Securities as contemplated by Section
301, Bearer Securities may not be issued in exchange for Registered Securities.
If (but only if) permitted by the applicable Board Resolution and
(subject to Section 303) set forth in the applicable Officers' Certificate, or
in any indenture supplemental hereto, delivered as contemplated by Section 301,
at the option of the Holder, Bearer Securities of any series may be exchanged
for Registered Securities of the same series of any authorized denominations and
of a like aggregate principal amount and tenor, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in default, any such permitted exchange may be
effected if the Bearer Securities are accompanied by payment in funds acceptable
to the Company in an amount equal to the face amount of such missing coupon or
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there is furnished to them such security or indemnity
as they may require to save each of
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them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to any Paying Agent any such missing coupon in respect of which
such a payment shall have been made, such Holder shall be entitled to receive
the amount of such payment; PROVIDED, HOWEVER, that, except as otherwise
provided in Section 1002, interest represented by coupons shall be payable only
upon presentation and surrender of those coupons at an office or agency located
outside the United States. Notwithstanding the foregoing, in case a Bearer
Security of any series is surrendered at any such office or agency in a
permitted exchange for a Registered Security of the same series and like tenor
after the close of business at such office or agency on (1) any Regular Record
Date and before the opening of business at such office or agency on the relevant
Interest Payment Date, or (2) any Special Record Date and before the opening of
business at such office or agency on the related proposed date for payment of
Defaulted Interest, such Bearer Security shall be surrendered without the coupon
relating to such Interest Payment Date or proposed date for payment, as the case
may be, and interest or Defaulted Interest, as the case may be, will not be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent Global Security shall be exchangeable
only as provided in this paragraph. If the depositary for any permanent Global
Security is DTC, then, unless the terms of such Global Security expressly permit
such Global Security to be exchanged in whole or in part for definitive
Securities, a Global Security may be transferred, in whole but not in part, only
to a nominee of DTC, or by a nominee of DTC to DTC, or to a successor to DTC for
such Global Security selected or approved by the Company or to a nominee of such
successor to DTC. If at any time (i) DTC notifies the Company that it is
unwilling or unable to continue as depositary or if DTC ceases to be a clearing
agency registered as such under the Securities Exchange Act of 1934, as amended,
at any time when the depositary is required to be so registered in order to act
as depositary for the applicable Global Security and a successor depositary is
not appointed within 90 days after the Company receives such notice or learns of
such ineligibility, (ii) the Company determines that the Securities of a series
shall no longer be represented by a Global Security and executes and delivers to
the Trustee an Officers' Certificate to such effect or (iii) an Event of Default
with respect to the Securities of such series shall have occurred and be
continuing and beneficial owners representing a majority in aggregate principal
amount of the Outstanding Securities of such series advise DTC to cease acting
as depositary for the applicable Global Security, then the Company shall
execute, and the Trustee shall authenticate and deliver, definitive Securities
of like series, rank, tenor and terms in definitive form in an aggregate
principal amount equal to the principal amount of such Global Security or
Securities. If any beneficial owner of an interest in a permanent Global
Security is otherwise entitled to exchange such interest for Securities of such
series and of like tenor and principal amount of another authorized form and
denomination, as specified as contemplated by Section 301 and provided that any
applicable notice provided in the permanent Global Security shall have been
given, then without unnecessary delay but in any event not later than the
earliest date on which such interest may be so exchanged, the Company shall
execute, and the Trustee shall authenticate and deliver, definitive Securities
in aggregate principal amount equal to the principal amount of such beneficial
owner's interest in such permanent Global Security. On or after the earliest
date on which such interests may be so exchanged, such permanent Global Security
shall be surrendered for exchange by DTC or such other depositary as shall be
specified in the Company Order with respect thereto to the Trustee, as the
Company's agent for such purpose; PROVIDED, HOWEVER, that no Bearer Security
delivered in exchange for a portion of a permanent Global Security shall be
mailed or otherwise delivered to any location in the United States. If a
Registered Security is issued in exchange for any portion of a permanent Global
Security after the close of business at the office or agency where such exchange
occurs on (i) any Regular Record Date and before the opening of business at such
office or agency on the relevant Interest Payment Date or (ii) any Special
Record Date and the opening of business at such office or agency on the related
proposed date for payment of Defaulted Interest, interest or Defaulted Interest,
as the case may be, will not be payable on such Interest Payment Date or
proposed date for payment, as the case may be, in respect of such Registered
Security, but will be payable on such Interest Payment Date or proposed date for
payment, as the case may be, only to the Person to whom interest in respect of
such portion of such permanent Global Security is payable in accordance with the
provisions of this Indenture.
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All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer (including evidence of title and identity) in form
satisfactory to the Company and the Security Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906, 1107 or 1305 or the second sentence of
the third preceding paragraph not involving any transfer.
Neither the Company nor the Trustee shall be required to (1) issue,
register the transfer of or exchange any Security if such Security may be among
those selected for redemption during a period beginning at the opening of
business 15 days before the mailing or first publication, as the case may be, of
notice of redemption of such Securities and ending at the close of business on
(A) if such Securities are issuable only as Registered Securities, the day of
the mailing of the relevant notice of redemption and (B) if such Securities are
issuable as Bearer Securities, the day of the first publication of the relevant
notice of redemption or, if such Securities are also issuable as Registered
Securities and there is no publication, the day of mailing of the relevant
notice of redemption, or (2) register the transfer of or exchange any Registered
Security, or portion thereof, so selected for redemption in whole or in part,
except, in the case of any Registered Security to be redeemed in part, the
portion thereof not to be redeemed, or (3) exchange any Bearer Security so
selected for redemption, except that such Bearer Security may be exchanged for a
Registered Security of that series and like tenor; PROVIDED, HOWEVER, that such
Registered Security shall be simultaneously surrendered for redemption, or (4)
issue, register the transfer of or exchange any Security which has been
surrendered for repayment at the option of the Holder, except the portion, if
any, of such Security not to be so repaid.
SECTION 3.6. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES
If any mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee or the Company, together with,
in proper cases, such security or indemnity as may be required by the Company or
the Trustee to save each of them or any agent of either of them harmless, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and principal amount, containing
identical terms and provisions and bearing a number not contemporaneously
outstanding, with coupons corresponding to the coupons, if any, appertaining to
the surrendered Security.
If there shall be delivered to the Company and to the Trustee (1)
evidence to their satisfaction of the destruction, loss or theft of any Security
or coupon and (2) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security or coupon has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new Security of
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the same series and principal amount, containing identical terms and provisions
and bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to such destroyed, lost or
stolen Security or to the Security to which such destroyed, lost or stolen
coupon appertains.
Notwithstanding the provisions of the previous two paragraphs, in case
any such mutilated, destroyed, lost or stolen Security or coupon has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Security, with coupons corresponding to the coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the Security to
which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; PROVIDED, HOWEVER, that payment of principal of (and premium, if any),
any interest on and any Additional Amounts with respect to Bearer Securities
shall, except as otherwise provided in Section 1002, be payable only at an
office or agency located outside the United States and, unless otherwise
specified as contemplated by Section 301, any interest on Bearer Securities
shall be payable only upon presentation and surrender of the coupons
appertaining thereto.
Upon the issuance of any new Security under this Section 306, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any, issued
pursuant to this Section 306 in lieu of any destroyed, lost or stolen Security,
or in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Security and its
coupons, if any, or the destroyed, lost or stolen coupon shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.
The provisions of this Section 306 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 3.7. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 301, interest on any Registered
Security that is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest in the relevant Security Register;
PROVIDED, HOWEVER, that, except as otherwise specified with respect to a series
of Securities in accordance with the provisions of Section 301, each installment
of interest on any Registered Security may at the Company's option be paid by
(1) mailing a check for such interest, payable to or upon the written order of
the Person entitled thereto, to the address of such Person as it appears on the
Security Register or (2) wire transfer to an account maintained by the payee
located inside the United States.
Unless otherwise provided as contemplated by Section 301 with respect to
the Securities of any series, payment of interest may be made, in the case of a
Bearer Security, by transfer to an account maintained by the payee with a bank
located outside the United States.
Unless otherwise provided as contemplated by Section 301, every
permanent Global Security will provide that interest, if any, payable on any
Interest Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the case
may be, with respect to that portion of such permanent Global Security held for
its account by Cede & Co. or the Common Depositary or other nominee, as the case
may be, for the purpose of permitting such party to credit the interest received
by it in respect of such permanent Global Security to the accounts of the
beneficial owners thereof.
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In case a Bearer Security of any series is surrendered in exchange for a
Registered Security of such series after the close of business (at an office or
agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 301, any interest on any Registered
Security of any series that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election, in each case as
provided in clause (1) or (2) below:
(a) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Registered Security of
such series and the date of the proposed payment (which shall not be less than
20 days after such notice is received by the Trustee), and at the same time the
Company shall deposit with the Trustee an amount of money in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series) equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit on or prior
to the date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted Interest as in
this clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days and
not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall cause notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of Securities
of such series at his address as it appears in the Security Register not less
than 10 days prior to such Special Record Date. The Trustee may, in its
discretion, in the name and at the expense of the Company, cause a similar
notice to be published at least once in an Authorized Newspaper in each Place of
Payment, but such publication shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been mailed
as aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names the Securities of such series (or their respective Predecessor Securities)
are registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (2). In case a Bearer
Security of any series is surrendered at the office or agency in a Place of
Payment for such series in exchange for a Registered Security of such series
after the close of business at such office or agency on any Special Record Date
and before the opening of business at such office or agency on the related
proposed date for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such proposed date of payment and
Defaulted Interest will not be payable on such proposed date of payment in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture.
(b) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with the
requirements of any securities exchange on which
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such Securities may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section 307 and Section 305,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 3.8. PERSONS DEEMED OWNERS
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered as the
owner of such Security for the purpose of receiving payment of principal of (and
premium, if any), and (subject to Sections 305 and 307) interest on, such
Registered Security and for all other purposes whatsoever, whether or not such
Registered Security be overdue, and neither the Company, the Trustee nor any
agent of the Company or the Trustee shall be affected by notice to the contrary.
All such payments so made to any such Person, or upon such Person's order, shall
be valid, and, to the extent of the sum or sums so paid, effectual to satisfy
and discharge the liability for money payable upon any such Security.
Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the Holder of any Bearer Security and the Holder of any coupon
as the absolute owner of such Security or coupon for the purpose of receiving
payment thereof or on account thereof and for all other purposes whatsoever,
whether or not such Security or coupon be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by notice
to the contrary.
No holder of any beneficial interest in any Global Security held on its
behalf by a depositary shall have any rights under this Indenture with respect
to such Global Security and such depositary (or its nominee) shall be treated by
the Company, the Trustee, and any agent of the Company or the Trustee as the
owner of such Global Security for all purposes whatsoever. None of the Company,
the Trustee, any Paying Agent or the Security Registrar will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a Global Security
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
Notwithstanding the foregoing, with respect to any Global Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by any depositary (or its nominee), as a
Holder, with respect to such Global Security or impair, as between such
depositary and owners of beneficial interests in such Global Security, the
operation of customary practices governing the exercise of the rights of such
depositary (or its nominee) as Holder of such Global Security.
SECTION 3.9. CANCELLATION
All Securities and coupons surrendered for payment, redemption,
repayment at the option of the Holder, registration of transfer or exchange or
conversion or for credit against any sinking fund payment shall, if surrendered
to any Person other than the Trustee, be delivered to the Trustee, and any such
Securities and coupons and Securities and coupons surrendered directly to the
Trustee for any such purpose shall be promptly cancelled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Company has not issued and sold, and all
Securities so delivered shall be promptly cancelled by the Trustee. If the
Company shall so
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acquire any of the Securities, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for cancellation. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section 309, except as expressly permitted by this
Indenture. Cancelled Securities and coupons held by the Trustee shall be
returned to the Company.
SECTION 3.10. COMPUTATION OF INTEREST
Except as otherwise specified as contemplated by Section 301 with
respect to Securities of any series, interest on the Securities of each series
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months.
ARTICLE IV.
SATISFACTION AND DISCHARGE
SECTION 4.1. SATISFACTION AND DISCHARGE OF INDENTURE
This Indenture shall upon Company Request cease to be of further effect
with respect to any series of Securities specified in such Company Request
(except as to any surviving rights of registration of transfer or exchange of
Securities of such series herein expressly provided for and any right to receive
Additional Amounts, as provided in Section 1010), and the Trustee, upon receipt
of a Company Order, and at the expense of the Company, shall execute instruments
in form and substance satisfactory to the Trustee and the Company acknowledging
satisfaction and discharge of this Indenture as to such series when
(a) either
(i) all Securities of such series theretofore authenticated and
delivered and all coupons, if any, appertaining thereto (other than (i)
coupons appertaining to Bearer Securities surrendered for exchange for
Securities and maturing after such exchange, whose surrender is not
required or has been waived as provided in Section 305, (ii) Securities
and coupons of such series which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306, (iii)
coupons appertaining to Securities called for redemption and maturing
after the relevant Redemption Date, whose surrender has been waived as
provided in Section 1106, and (iv) Securities and coupons of such series
for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust, as provided in Section 1003) have
been delivered to the Trustee for cancellation or
(ii) all Securities of such series and, in the case of (i) or (ii)
below, any coupons appertaining thereto not theretofore delivered to the
Trustee for cancellation
(A) have become due and payable or
(B) will become due and payable at their Stated Maturity
within one year or
(C) if redeemable at the option of the Company, are to be
called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of the Company, and
the Company, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for such purpose an amount in the currency or
currencies, currency unit or units or composite currency or
currencies in which
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the Securities of such series are payable, sufficient to pay and
discharge the entire indebtedness on such Securities and such
coupons not theretofore delivered to the Trustee for cancellation,
for principal (and premium, if any) and interest, and any
Additional Amounts with respect thereto, to the date of such
deposit (in the case of Securities which have become due and
payable) or to the 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 as to
such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 606, the obligations of the Company to any Authenticating Agent under
Section 611 and, if money shall have been deposited with and held by the Trustee
pursuant to subclause (B) of clause (1) of this Section 401, the obligations of
the Company under Sections 304, 305, 306 and 1002 and 1003 and the obligations
of the Trustee under Section 402 and the last paragraph or Section 1003 shall
survive.
SECTION 4.2. APPLICATION OF TRUST FUNDS
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities, the
coupons and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto of the principal (and
premium, if any) and any interest and Additional Amounts for whose payment such
money has been deposited with or received by the Trustee, but such money need
not be segregated from other funds except to the extent required by law.
ARTICLE V.
REMEDIES
SECTION 5.1. EVENTS OF DEFAULT
"Event of Default," wherever used herein with respect to any particular
series of Securities, means any one of the following events (whatever the reason
for such Event of Default and whether or not it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of any interest upon or any Additional
Amounts payable in respect of any Security of that series or of any coupon
appertaining thereto, when such interest, Additional Amounts or coupon becomes
due and payable, and continuance of such default for a period of 30 days; or
(b) default in the payment of the principal of (or premium, if any, on)
any Security of that series when it becomes due and payable, whether at Stated
Maturity or by declaration of acceleration, notice of redemption, notice of
option to elect repayment or otherwise; or
(c) default in the deposit of any sinking fund payment, when and as due
by the terms of any Security of that series; or
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(d) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture or in any Security of that series (other than a
covenant or warranty a default in whose performance or whose breach is elsewhere
in this Section 501 specifically dealt with or which has been expressly included
in this Indenture solely for the benefit of one or more series of Securities
other than such series), and continuance of such default or breach for a period
of 60 days after there has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in principal amount of the Outstanding Securities of that series a
written notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder; or
(e) default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company or any of its Subsidiaries
(including obligations under leases required to be capitalized on the balance
sheet of the lessee under generally accepted accounting principles, but not
including any indebtedness or obligations for which recourse is limited to
property purchased) in an aggregate principal amount in excess of $25,000,000 or
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any indebtedness for money borrowed
by the Company or any of its Subsidiaries (including such leases, but not
including such indebtedness or obligations for which recourse is limited to
property purchased) in an aggregate principal amount in excess of $25,000,000,
whether such indebtedness exists on the date of this Indenture or shall
thereafter be created, which default shall have resulted in such indebtedness
becoming or being declared due and payable prior to the date on which it would
otherwise have become due and payable or such obligations being accelerated,
without such acceleration having been rescinded or annulled; or
(f) the Company or any Significant Subsidiary of the Company pursuant to
or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case or proceeding or files a petition or
answer or consent seeking reorganization or relief or consents to the
filing of such petition;
(ii) consents to the entry of an order for relief against it in an
involuntary case or proceeding or to the commencement of any case or
proceeding against it;
(iii) consents to the appointment of a Custodian of it or for all
or any substantial part of its property; or
(iv) makes a general assignment for the benefit of its creditors;
or
(g) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any Significant Subsidiary
of the Company in an involuntary case or proceeding or adjudges the
Company or any Significant Subsidiary of the Company as bankrupt or
insolvent or approves as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect
of the Company or any Significant Subsidiary of the Company;
(ii) appoints a Custodian of the Company or any Significant
Subsidiary of the Company or for all or any substantial part of the
property of the Company or any Significant Subsidiary of the Company; or
(iii) orders the liquidation or winding up of the Company or any
Significant Subsidiary of the Company
and, in the case of any of subclause (A), (B) or (C) of this paragraph (7), the
order or decree remains unstayed and in effect for 90 days; or
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(h) any other Event of Default provided with respect to Securities of
that series.
As used in this Section 501, the term "Bankruptcy Law" means Title 11, U.S. Code
or any similar federal or state law for the relief of debtors and the term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian,
sequestrator or other similar official under any Bankruptcy Law.
SECTION 5.2. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
Securities of that series are Original Issue Discount Securities or Indexed
Securities, such portion of the principal as may be specified in the terms
thereof) of all the Securities of that series to be due and payable immediately,
by a notice in writing to the Company (and to the Trustee if given by the
Holders), and upon any such declaration such principal or specified portion
thereof shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article Five provided, the Holders of not less than a majority in principal
amount of the Outstanding Securities of that series, by written notice to the
Company and the Trustee, may rescind and annul such declaration of acceleration
and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum sufficient
to pay in the currency, currency unit or composite currency in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series):
(i) all overdue installments of interest on and any Additional
Amounts payable in respect of all Outstanding Securities of that series
and any related coupons;
(ii) the principal of (and premium, if any, on) any Outstanding
Securities of that series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates
borne by or provided for, as the case may be, in such Securities;
(iii) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest and any Additional
Amounts at the rate or rates borne by or provided for in, as the case
may be, 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 nonpayment of the principal of (or premium, if any) or interest
on Securities of that series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 5.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE
The Company covenants that if:
(a) default is made in the payment of any installment of interest or
Additional Amounts, if any, on any Security of any series and any related coupon
when such interest or Additional Amount becomes due and payable and such default
continues for a period of 30 days or
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(b) default is made in the payment of the principal of (or premium, if
any, on) any Security of any series at its Maturity,
then the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities of such series and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium, if any) and interest and Additional Amounts, with interest upon any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installments of interest
or Additional Amounts, if any, at the rate or rates borne by or provided for in,
as the case may be, 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 and 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 of such series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such Securities
of such series, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
and any related coupons by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 5.4. 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 (irrespective of whether the principal of the Securities
of any series shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal, premium, if any,
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, or such lesser
amount as may be provided for in the Securities of such series, of principal
(and premium, if any) and interest and Additional Amounts, if any, 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 and its agents and counsel) and of the Holders
allowed in such judicial proceeding and
(b) to collect and receive any money or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each Holder of
Securities of such series and coupons to make such payments to the Trustee, and
if the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee and any
predecessor Trustee, their agents and counsel, and any other amounts due the
Trustee or any predecessor Trustee under Section 606.
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Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
Holders of the Securities, and it shall not be necessary to make any Holders of
the Securities parties to any such proceedings.
SECTION 5.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES OR
COUPONS
All rights of action and claims under this Indenture or any of the
Securities or coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or coupons or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee and its agents
and counsel, be for the ratable benefit of the Holders of the Securities and
coupons in respect of which such judgment has been recovered.
SECTION 5.6. APPLICATION OF MONEY COLLECTED
Any money collected by the Trustee pursuant to this Article Five shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal (or
premium, if any) or interest and any Additional Amounts, upon presentation of
the Securities or coupons, or both, as the case may be, and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606;
SECOND: To the payment of the amounts then due and unpaid upon
the Securities and coupons for the principal (and premium, if any) and
interest and any Additional Amounts payable, in respect of which or for
the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the aggregate amounts
due and payable on such Securities and coupons for principal (and
premium, if any), interest and Additional Amounts, respectively; and
THIRD: To the payment of the remainder, if any, to the Company.
SECTION 5.7. LIMITATION ON SUITS
No Holder of any Security of any series or any related coupon shall have
any right to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default 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;
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(c) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;
(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 5.8. UNCONDITIONAL RIGHTS OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM, IF
ANY, INTEREST AND ADDITIONAL AMOUNTS
Notwithstanding any other provision in this Indenture, the Holder of any
Security or coupon shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Sections 305 and 307) interest on, and any Additional Amounts in respect of,
such Security or coupon on the respective due dates expressed in such Security
or coupon (or, in the case of redemption at the option of the Company or
repayment at the option of the Holder, on the relevant Redemption Date or
Repayment Date, as applicable) 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 5.9. RESTORATION OF RIGHTS AND REMEDIES
If the Trustee or any Holder of a Security or coupon has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, the Company, the Trustee and the Holders of Securities and coupons shall,
subject to any determination in such proceeding, be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 5.10. RIGHTS AND REMEDIES CUMULATIVE
To the extent permitted by law and except as otherwise provided with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Securities or coupons in the last paragraph of Section 306, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders of Securities
or coupons is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. To the extent permitted by law, the
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
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SECTION 5.11. DELAY OR OMISSION NOT WAIVER
No delay or omission of the Trustee or of any Holder of any Security or
coupon to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this Article
Five or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders
of Securities or coupons, as the case may be.
SECTION 5.12. CONTROL BY HOLDERS OF SECURITIES
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee with respect
to the Securities of such series, provided that
(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) the Trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the Holders of Securities of such
series not joining therein.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction by Holders.
SECTION 5.13. 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 and any related coupons waive any past default
hereunder with respect to such series and its consequences, except a default
(a) in the payment of the principal of (or premium, if any) or interest
on or Additional Amounts payable in respect of any Security of such series or
any related coupons or
(b) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 5.14. WAIVER OF USURY, STAY OR EXTENSION LAWS
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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SECTION 5.15. UNDERTAKING FOR COSTS
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of any
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 515 shall not apply to any suit instituted by the Trustee, to
any suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in principal amount of the Outstanding Securities of any series,
or to any suit instituted by any Holder for the enforcement of the payment of
the principal of (or premium, if any) or interest on or Additional Amounts in
respect of any Security on or after the respective Stated Maturities expressed
in such Security (or, in the case of redemption at the option of the Company or
repayment at the option of the Holder, on or after the relevant Redemption Date
or Repayment Date, as applicable).
ARTICLE VI.
THE TRUSTEE
SECTION 6.1. NOTICE OF DEFAULTS
Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit in the
manner and to the extent provided in TIA Section 313(c), notice of such default
hereunder known to the Trustee, unless such default shall have been cured or
waived; PROVIDED, HOWEVER, that, except in the case of a default in the payment
of the principal of (or premium, if any) or interest on or any Additional
Amounts with respect to any Security of such series, or in the payment of any
sinking fund installment with respect to the Securities of such series, the
Trustee shall be protected in withholding such notice if and so long as
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the interest of the Holders of the Securities and coupons
of such series; and PROVIDED FURTHER that in the case of any default or breach
of the character specified in Section 501(4) with respect to the Securities and
coupons of such series, no such notice to Holders shall be given until at least
60 days after the occurrence thereof. For the purpose of this Section 601, the
term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to the Securities of such
series.
SECTION 6.2. CERTAIN RIGHTS OF TRUSTEE
Subject to the provisions of TIA Section 315(a) through 315(d):
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note,
coupon or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (other than
delivery of any Security, together with any coupons appertaining thereto, to the
Trustee for authentication and delivery pursuant to Section 303 which shall be
sufficiently evidenced as provided therein) and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
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(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or power vested in it by this Indenture at the request or direction of
any of the Holders of Securities of any series or any related coupons pursuant
to this Indenture, unless such Holders shall have offered to the Trustee
security or indemnity reasonably satisfactory to the Trustee against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(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, direction, consent, order, bond, debenture,
note, coupon or other paper or document, unless requested in writing so to do by
the Holders of not less than a majority in aggregate principal amount of the
Outstanding Securities of any series; PROVIDED that, if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require reasonable indemnity
against such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such examination shall be paid by the Holders or,
if paid by the Trustee, shall be repaid by the Holders upon demand. The Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, relevant to the facts or matters
that are the subject of its inquiry, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(h) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and reasonably believed by it to be authorized or
within the discretion, rights or power conferred upon it by this Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Except during the continuance of an Event of Default, the Trustee
undertakes to perform only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
SECTION 6.3. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES
The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, and in any coupons shall be taken as
the statements of the Company, and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that
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the Trustee represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Securities and perform its obligations hereunder.
Neither the Trustee nor any Authenticating Agent shall be accountable for the
use or application by the Company of Securities or the proceeds thereof.
SECTION 6.4. MAY HOLD SECURITIES
The Trustee, any Paying Agent, Security Registrar, Authenticating Agent
or any other agent of the Company, in its individual or any other capacity, may
become the owner or pledgee of Securities and coupons and subject to TIA
Sections 310(b) and 311, and may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Paying Agent, Security Registrar,
Authenticating Agent or such other agent.
SECTION 6.5. MONEY HELD IN TRUST
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
SECTION 6.6. COMPENSATION AND REIMBURSEMENT
The Company agrees:
(a) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust);
(b) except as otherwise expressly provided herein, to reimburse each of
the Trustee and any predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the reasonable expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(c) to indemnify each of the Trustee and any predecessor Trustee for,
and to hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its own part, arising out of or in connection with
the acceptance or administration of the trust or trusts hereunder, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder.
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 501(6) or Section 501(7), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
As security for the performance of the obligations of the Company under
this Section 606, the Trustee shall have a lien prior to the Securities upon all
property and money held or collected by the Trustee as such, except money held
in trust for the payment of principal of (or premium, if any) or interest or
Additional Amounts on particular Securities or any coupons.
The provisions of this Section 606 shall survive the termination of this
Indenture.
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SECTION 6.7. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY; CONFLICTING INTERESTS
There shall at all times be a Trustee hereunder which shall be eligible
to act as Trustee under TIA Section 310(a)(1) and shall have a combined capital
and surplus of at least $50,000,000. If such corporation publishes reports of
condition at least annually, pursuant to law or the requirements of federal,
state, territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section 607, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 607, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article Six. Neither the Company nor any Affiliate
of the Company shall serve as Trustee.
SECTION 6.8. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR
No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article Six shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 609.
The Trustee may resign at any time with respect to the Securities of one
or more series by giving written notice thereof to the Company. If an instrument
of acceptance by a successor Trustee shall not have been delivered to the
Trustee within 30 days after the giving of such notice or resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Trustee and to the
Company.
If at any time:
(a) the Trustee shall fail to comply with the provisions of TIA Section
310(b) after written request therefor by the Company or by any Holder of a
Security who has been a bona fide Holder of a Security for at least six months;
or
(b) the Trustee shall cease to be eligible under Section 607 and shall
fail to resign after written request therefor by the Company or by any Holder of
a Security who has been a bona fide Holder of a Security for at least six
months; or
(c) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, (i) the Company by or pursuant to a Board
Resolution may remove the Trustee and appoint a successor Trustee with respect
to all Securities or (ii) subject to TIA Section 315(e), any Holder of a
Security who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause with respect
to the Securities of one or more series, the Company, by or pursuant to a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only
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one Trustee with respect to the Securities of any particular series). If, within
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee with respect to the Securities of any series
shall be appointed by Act of the Holders of a majority in principal amount of
the Outstanding Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee with respect to the
Securities of such series and to that extent supersede the successor Trustee
appointed by the Company. If no successor Trustee with respect to the Securities
of any series shall have been so appointed by the Company or the Holders of
Securities and accepted appointment in the manner hereinafter provided, any
Holder of a Security who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to Securities of such series.
The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series in the manner
provided for notices to the Holders of Securities in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.
SECTION 6.9. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR
In case of the appointment hereunder of a successor Trustee with respect
to all Securities, every such successor Trustee shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder, subject nevertheless to its claim, if any, provided for in
Section 606.
In case of the appointment hereunder of a successor Trustee with respect
to the Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto, pursuant to
Article Nine, wherein each successor Trustee shall accept such appointment and
which (1) shall contain such provisions as shall be necessary or desirable to
transfer and confirm to, and to vest in, each successor Trustee all the rights,
powers, trusts and duties of the retiring Trustee with respect to the Securities
of that or those series to which the appointment of such successor Trustee
relates, (2) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-Trustees of the same trust and that each such Trustee shall be Trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.
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Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in this
Section 609, as the case may be.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article Six.
SECTION 6.10. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder;
PROVIDED such corporation shall be otherwise qualified and eligible under this
Article Six, without the execution or filing of any paper or any further act on
the part of the parties hereto. In case any Securities or coupons shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities or coupons so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities or coupons. In case any Securities or coupons
shall not have been authenticated by such predecessor Trustee, any such
successor Trustee may authenticate and deliver such Securities or coupons, in
either its own name or that of its predecessor Trustee, with the full force and
effect which this Indenture provides for the certificate of authentication of
the Trustee.
SECTION 6.11. APPOINTMENT OF AUTHENTICATING AGENT
At any time when any of the Securities remain Outstanding, the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more series
of Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon exchange, registration of
transfer or partial redemption or repayment thereof, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Any such appointment shall be evidenced by an instrument in writing
signed by a Responsible Officer of the Trustee, a copy of which instrument shall
be promptly furnished to the Company. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a bank or trust company or
corporation organized and doing business and in good standing under the laws of
the United States or of any state or the District of Columbia authorized under
such laws to act as Authenticating Agent, having a combined capital and surplus
of not less than $50,000,000 and subject to supervision or examination by
federal or state authorities. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 611, the combined capital and surplus of such Authenticating Agent shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section
611, such Authenticating Agent shall resign immediately in the manner and with
the effect specified in this Section 611.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section 611, without the execution or filing of any paper or further
act on the part of the Trustee or the Authenticating Agent.
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An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Company. The Trustee for any series of Securities may at any time
terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 611, the Trustee for such series may appoint a
successor Authenticating Agent which shall be acceptable to the Company and
shall give notice of such appointment to all Holders of Securities of the series
with respect to which such Authenticating Agent will serve in the manner set
forth in Section 106. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section 611.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation, including reimbursement of its reasonable expenses for
its services under this Section 611.
If an appointment with respect to one or more series is made pursuant to
this Section 611, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
_______________________, as Trustee
Dated: _____________________ By: _________________________________
as Authenticating Agent
Dated: _____________________ By: _________________________________
Authorized Signatory
ARTICLE VII.
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1. DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS
Every Holder of Securities or coupons, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any Authenticating Agent nor any Paying Agent nor any Security
Registrar shall be held accountable by reason of the disclosure of any
information as to the names and addresses of the Holders of Securities in
accordance with TIA Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under TIA Section
312(b).
SECTION 7.2. REPORTS BY TRUSTEE
Within 60 days after ___________ of each year commencing with the first
__________ after the first issuance of Securities pursuant to this Indenture,
the Trustee shall transmit by mail to all Holders of Securities as provided in
TIA Section 313(c) a brief report dated as of such ___________ if required by
TIA Section 313(a).
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SECTION 7.3. REPORTS BY COMPANY
The Company will:
(a) file with the Trustee, within 15 days after the Company is required
to file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934,
as amended; or, if the Company is not required to file information, documents or
reports pursuant to either of such Sections, then it will file with the Trustee
and the Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13
of the Securities Exchange Act of 1934, as amended, in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations; and
(c) transmit by mail to the Holders of Securities, within 30 days after
the filing thereof with the Trustee, in the manner and to the extent provided in
TIA Section 313(c), such summaries of any information, documents and reports
required to be filed by the Company pursuant to clauses (1) and (2) of this
Section 703 as may be required by rules and regulations prescribed from time to
time by the Commission.
SECTION 7.4. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS
The Company will furnish or cause to be furnished to the Trustee:
(a) semiannually, not later than 15 days after the Regular Record Date
for interest for each series of Securities, a list, in such form as the Trustee
may reasonably require, of the names and addresses of the Holders of Securities
of such series as of such Regular Record Date or, if there is no Regular Record
Date for interest for such series of Securities, semiannually, upon such dates
as are set forth in or established pursuant to the Board Resolution or indenture
supplemental hereto authorizing such series, and
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished, PROVIDED, HOWEVER, that, so long as the Trustee is the Security
Registrar, no such list shall be required to be furnished.
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ARTICLE VIII.
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE CONSOLIDATIONS
AND MERGERS OF COMPANY AND SALES, LEASES AND
SECTION 8.1. CONVEYANCES PERMITTED SUBJECT TO CERTAIN CONDITIONS
The Company will not consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into, any Person unless (1)
either the Company shall be the continuing entity, or the successor Person (if
other than the Company) formed by or resulting from such consolidation or merger
or which shall have received the transfer of such assets shall be a corporation
organized and existing under the laws of the United States or any state thereof
and such successor corporation shall expressly assume the due and punctual
payment of the principal of (and premium, if any) and any interest (including
all Additional Amounts, if any, payable pursuant to Section 1010) on all of the
Securities, according to their tenor, and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture and the
Securities to be performed or observed by the Company, by supplemental
indenture, complying with Article Nine, satisfactory to the Trustee, executed
and delivered to the Trustee by such corporation and (2) immediately after
giving effect to such transaction and treating any indebtedness which becomes an
obligation of the Company or any Subsidiary as a result thereof as having been
incurred, and any liens or other encumbrances on any property or assets of the
Company or any Subsidiary that are incurred, created or assumed as a result
thereof as having been created, incurred or assumed, by the Company or such
Subsidiary at the time of such transaction, no Event of Default, and no event
which, after notice or the lapse of time, or both, would become an Event of
Default, shall have occurred and be continuing.
SECTION 8.2. RIGHTS AND DUTIES OF SUCCESSOR ENTITY
In case of any such consolidation, merger, sale, lease or conveyance and
upon any such assumption by the successor corporation in accordance with the
provisions of Section 801, such successor corporation shall succeed to and be
substituted for the Company, with the same effect as if it had been named herein
as the party of the first part, and the predecessor corporation, except in the
event of a lease, shall be relieved of any further obligation under this
Indenture and the Securities. Such successor corporation thereupon may cause to
be signed, and may issue either in its own name or in the name of the Company,
any or all of the Securities issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Trustee; and, upon the order of
such successor corporation, instead of the Company, and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Securities which previously shall have
been signed and delivered by the officers of the Company to the Trustee for
authentication, and any Securities which such successor corporation thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All the
Securities so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Securities had
been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
SECTION 8.3. OFFICERS' CERTIFICATE AND OPINION OF COUNSEL
Any consolidation, merger, sale, lease or conveyance permitted under
Section 801 is also subject to the condition that the Trustee receive an
Officers' Certificate and an Opinion of Counsel to the effect that any such
consolidation, merger, sale, lease or conveyance, and the assumption by any
successor corporation, complies with the provisions of this Article Eight and
that all conditions precedent herein provided for relating to such transaction
have been complied with.
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ARTICLE IX.
SUPPLEMENTAL INDENTURES
SECTION 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS
Without the consent of any Holders of Securities or coupons, the
Company, when authorized by or pursuant to a Board Resolution, and the Trustee,
at any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(a) to evidence the succession of another corporation to the Company as
obligor under this Indenture and the Securities and the assumption by any such
successor of the covenants of the Company herein and in the Securities
contained; or
(b) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be for
the benefit of less than all series of Securities, stating that such covenants
are expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company; or
(c) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such Events of Default are to
be for the benefit of less than all series of Securities, stating that such
Events of Default are expressly being included solely for the benefit of such
series); PROVIDED, HOWEVER, that in respect of any such additional Events of
Default such supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed in the
case of other defaults), may provide for an immediate enforcement upon such
default, may limit the remedies available to the Trustee upon such default or
may limit the right of the Holders of a majority in aggregate principal amount
of that or those series of Securities to which such additional Events of Default
apply to waive such default; or
(d) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal of or any premium or
interest on Bearer Securities, to permit Bearer Securities to be issued in
exchange for Registered Securities, to permit Bearer Securities to be issued in
exchange for Bearer Securities of other authorized denominations or to permit or
facilitate the issuance of Securities in uncertificated form; PROVIDED, HOWEVER,
that any such action shall not adversely affect the interests of the Holders of
Securities of any series or any related coupons in any material respect; or
(e) to change or eliminate any of the provisions of this Indenture,
PROVIDED that any such change or elimination shall not apply to any Outstanding
Security of any series created prior to the execution of such supplemental
indenture which is entitled to the benefit of such provision; or
(f) to secure the Securities; or
(g) to establish the form or terms of Securities of any series and any
related coupons as permitted by Sections 201 and 301, including the provisions
and procedures, if applicable, relating to Securities convertible into Common
Stock or Preferred Stock, as the case may be; or
(h) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Securities of one or more series and
to add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee; or
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(i) to cure any ambiguity, to correct or supplement any provision herein
which may be defective or inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising under
this Indenture which shall not be inconsistent with the provisions of this
Indenture; PROVIDED, HOWEVER, that such actions shall not adversely affect the
interests of the Holders of Securities of any series or any related coupons in
any material respect; or
(j) to supplement any of the provisions of this Indenture to such extent
as shall be necessary to permit or facilitate the defeasance, covenant
defeasance and discharge of any series of Securities pursuant to Sections 401,
1402 and 1403; PROVIDED, HOWEVER, that any such action shall not adversely
affect the interests of the Holders of Securities of such series and any related
coupons or any other series of Securities and any related coupons in any
material respect.
SECTION 9.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS
With the consent of the Holders of not less than a majority in principal
amount of all Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by or pursuant to a Board Resolution, and
the Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the rights
of the Holders of Securities and any related coupons under this Indenture;
PROVIDED, HOWEVER, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby:
(a) change the Stated Maturity of the principal of (or premium, if any,
on) or any installment of principal of or premium, if any, or interest on, any
Security; or reduce the principal amount thereof or the rate or amount of
interest thereon or any Additional Amounts payable in respect thereof, or any
premium payable upon the redemption or repayment thereof, or change any
obligation of the Company to pay Additional Amounts pursuant to Section 1010
(except as contemplated by Section 801(1) and permitted by Section 901(1)), or
reduce the amount of the principal of an Original Issue Discount Security or
Indexed Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 502 or the amount
thereof provable in bankruptcy pursuant to Section 504, or adversely affect any
right of repayment at the option of the Holder of any Security (or reduce the
amount of premium payable on any such repayment), or change any Place of Payment
where, or the currency or currencies, currency unit or units or composite
currency or currencies in which, any principal or any premium or the interest
thereon is payable, or impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity thereof (or, in the case of
redemption or repayment at the option of the Holder, on or after the Redemption
Date or the Repayment Date, as the case may be), or
(b) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver with respect to such series (of compliance with certain provisions of
this Indenture or certain defaults hereunder and their consequences) provided
for in this Indenture, or reduce the requirements of Section 1504 for quorum or
voting, or
(c) modify any of the provisions of this Section 902, Section 513 or
1011, except to increase the required percentage to effect such action or to
provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security affected
thereby.
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It shall not be necessary for any Act of Holders under this Section 902
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
SECTION 9.3. EXECUTION OF SUPPLEMENTAL INDENTURES
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article Nine or the modification
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 9.4. EFFECT OF SUPPLEMENTAL INDENTURES
Upon the execution of any supplemental indenture under this Article
Nine, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities that are theretofore or thereafter authenticated and
delivered hereunder and of any coupon appertaining thereto shall be bound
thereby.
SECTION 9.5. CONFORMITY WITH TRUST INDENTURE ACT
Every supplemental indenture executed pursuant to this Article Nine
shall conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 9.6. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES
Securities of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article Nine may, and shall, if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE X.
COVENANTS
SECTION 10.1. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, INTEREST AND ADDITIONAL
AMOUNTS
The Company covenants and agrees for the benefit of the Holders of each
series of Securities that it will duly and punctually pay the principal of (and
premium, if any) and interest on and any Additional Amounts payable in respect
of the Securities of that series in accordance with the terms of such series of
Securities, any coupons appertaining thereto and this Indenture. Unless
otherwise specified
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as contemplated by Section 301 with respect to any series of Securities, any
interest due on and any Additional Amounts payable in respect of Bearer
Securities on or before Maturity, other than Additional Amounts, if any, payable
as provided in Section 1010 in respect of principal of (or premium, if any, on)
such a Bearer Security, shall be payable only upon presentation and surrender of
the several coupons for such interest installments as are evidenced thereby as
they severally mature.
SECTION 10.2. MAINTENANCE OF OFFICE OR AGENCY
If Securities of a series are issuable only as Registered Securities,
the Company shall maintain in each Place of Payment for such series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment or conversion, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served. If Securities of a series are issuable as Bearer
Securities, the Company will maintain: (1) in the City of New York, an office or
agency where any Securities of that series may be presented or surrendered for
payment or conversion, where any Securities of that series may be surrendered
for registration of transfer, where Securities of that series may be surrendered
for exchange, where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served and where Bearer
Securities of that series and related coupons may be presented or surrendered
for payment or conversion in the circumstances described in the following
paragraph (and not otherwise); (2) subject to any laws or regulations applicable
thereto, in a Place of Payment for that series which is located outside the
United States, an office or agency where Securities of that series and related
coupons may be presented and surrendered for payment (including payment of any
Additional Amounts payable on Securities of that series pursuant to Section
1010) or conversion; PROVIDED, HOWEVER, that if the Securities of that series
are listed on any stock exchange located outside the United States and such
stock exchange shall so require, the Company will maintain a Paying Agent for
the Securities of that series in any required city located outside the United
States, as the case may be, so long as the Securities of that series are listed
on such exchange; and (3) subject to any laws or regulations applicable thereto,
in a Place of Payment for that series located outside the United States an
office or agency where any Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered for
exchange and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in the
location, of each such office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee,
except that Bearer Securities of that series and the related coupons may be
presented and surrendered for payment (including payment of any Additional
Amounts payable on Bearer Securities of that series pursuant to Section 1010) or
conversion at the offices specified in the Security, in London, England, and the
Company hereby appoints the same as its agent to receive such respective
presentations, surrenders, notices and demands, and the Company hereby appoints
the Trustee its agent to receive all such presentations, surrenders, notices and
demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, no payment of principal, premium or interest on or Additional
Amounts in respect of Bearer Securities shall be made at any office or agency of
the Company in the United States or by check mailed to any address in the United
States or by transfer to an account maintained with a bank located in the United
States; PROVIDED, HOWEVER, that, if the Securities of a series are payable in
Dollars, payment of principal of and any premium and interest on any Bearer
Security (including any Additional Amounts payable on Securities of such series
pursuant to Section 1010) shall be made at the office of the Company's Paying
Agent in the City of New York, if (but only if) payment in Dollars of the full
amount of such principal, premium, interest or Additional Amounts, as the case
may be, at all offices or agencies outside the United States maintained for the
purpose by the Company in accordance with this Indenture is illegal or
effectively precluded by exchange controls or other similar restrictions.
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The Company may from time to time designate one or more other offices or
agencies where the Securities of one or more series may be presented or
surrendered for any or all of such purposes, and may from time to time rescind
such designations; PROVIDED, HOWEVER, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency. Unless otherwise specified with respect to
any Securities pursuant to Section 301 with respect to a series of Securities,
the Company hereby designates as a Place of Payment for each series of
Securities the office or agency of the Company in the City of New York, and
initially appoints the Trustee at its Corporate Trust Office as Paying Agent in
such city and as its agent to receive all such presentations, surrenders,
notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, if and so long as the Securities of any series (1) are denominated
in a Foreign Currency or (2) may be payable in a Foreign Currency, or so long as
it is required under any other provision of this Indenture, then the Company
will maintain with respect to each such series of Securities, or as so required,
at least one exchange rate agent.
SECTION 10.3. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST
If the Company shall at any time act as its own Paying Agent with
respect to any series of any Securities and any related coupons, it will, on or
before each due date of the principal of (and premium, if any), or interest on
or Additional Amounts in respect of, any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum in the currency or currencies, currency unit or units or composite currency
or currencies in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 301 for the Securities of such series)
sufficient to pay the principal (and premium, if any) or interest or Additional
Amounts so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided, and will promptly notify the Trustee
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities and any related coupons, it will, on or before each due date of
the principal of (and premium, if any), or interest on or Additional Amounts in
respect of, any Securities of that series, deposit with a Paying Agent a sum (in
the currency or currencies, currency unit or units or composite currency or
currencies described in the preceding paragraph) sufficient to pay the principal
(and premium, if any) or interest or Additional Amounts so becoming due, such
sum to be held in trust for the benefit of the Persons entitled to such
principal, premium or interest or Additional Amounts and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section 1003,
that such Paying Agent will
(a) hold all sums held by it for the payment of principal of (and
premium, if any) or interest or Additional Amounts on Securities in trust for
the benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or any other
obligor upon the Securities) in the making of any such payment of principal (and
premium, if any) or interest or Additional Amounts on the Securities of that
series; and
(c) at any time during the continuance of any such default upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
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The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same terms as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Except as otherwise provided in the Securities of any series, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (and premium, if any) or interest on,
or any Additional Amounts in respect of, any Security of any series and
remaining unclaimed for two years after such principal (and premium, if any),
interest or Additional Amounts have become due and payable shall be paid to the
Company upon Company Request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment of such
principal of (and premium, if any) or interest on, or any Additional Amounts in
respect of, such Security, without interest thereon, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in an
Authorized Newspaper, or to be mailed to Holders of Registered Securities, or
both, 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
or notice, as the case may be, any unclaimed balance of such money then
remaining will be repaid to the Company.
SECTION 10.4. EXISTENCE
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, all material rights (by certificate of incorporation, by-laws and
statute) and all material franchises; PROVIDED, HOWEVER, that the Company shall
not be required to preserve any right or franchise if the Board of Directors
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company.
SECTION 10.5. MAINTENANCE OF PROPERTIES
The Company will cause all of its material properties used or useful in
the conduct of its business or the business of any Subsidiary to be maintained
and kept in good condition, repair and working order and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; PROVIDED,
HOWEVER, that the Company and its Subsidiaries shall not be prevented from
selling or otherwise disposing of their properties for value in the ordinary
course of their business.
SECTION 10.6. INSURANCE
The Company will, and will cause each of its Subsidiaries to, keep in
force upon all of its properties and operations policies of insurance carried
with responsible companies in such amounts and covering all such risks as shall
be customary in the industry in accordance with prevailing market conditions and
availability.
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SECTION 10.7. PAYMENT OF TAXES AND OTHER CLAIMS
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon it or any Subsidiary or upon the
income, profits or property of the Company or any Subsidiary and (2) all lawful
claims for labor, materials and supplies which, if unpaid, might by law become a
lien upon the property of the Company or any Subsidiary; PROVIDED, HOWEVER, that
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim the amount, applicability
or validity of which is being contested in good faith by appropriate
proceedings.
SECTION 10.8. PROVISION OF FINANCIAL INFORMATION
Whether or not the Company is subject to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, the Company will, within 15 days
after each of the respective dates by which the Company would have been required
to file annual reports, quarterly reports and other documents with the
Commission if the Company were so subject, (1) transmit by mail to all Holders,
as their names and addresses appear in the Security Register, without cost to
such Holders, copies of the annual reports, quarterly reports and other
documents which the Company would have been required to file with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, if the Company were subject to such Sections, (2) file with the Trustee
copies of the annual reports, quarterly reports and other documents which the
Company would have been required to file with the Commission pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934, as amended, if the Company
were subject to such Sections, and (3) promptly upon written request and payment
of the reasonable cost of duplication and delivery, supply copies of such
documents to any prospective Holder.
SECTION 10.9. STATEMENT AS TO COMPLIANCE
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year, a brief certificate from the principal executive officer,
principal financial officer or principal accounting officer as to his or her
knowledge of the Company's compliance with all conditions and covenants under
this Indenture and the Securities, and in the event of any noncompliance,
specifying such noncompliance and the nature and status thereof. For purposes of
this Section 1009, such compliance shall be determined without regard to any
period of grace or requirement of notice under this Indenture.
SECTION 10.10. ADDITIONAL AMOUNTS
If any Securities of a series provide for the payment of Additional
Amounts, the Company will pay to the Holder of any Security of such series or
any coupon appertaining thereto Additional Amounts as may be specified as
contemplated by Section 301. Whenever in this Indenture there is mentioned, in
any context except in the case of Section 502(1), the payment of the principal
of or any premium or interest on, or in respect of, any Security of any series
or payment of any related coupon or the net proceeds received on the sale or
exchange of any Security of any series, such mention shall be deemed to include
mention of the payment of Additional Amounts provided by the terms of such
series established pursuant to Section 301 to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof pursuant to
such terms and express mention of the payment of Additional Amounts (if
applicable) in any provisions hereof shall not be construed as excluding
Additional Amounts in those provisions hereof where such express mention is not
made.
Except as otherwise specified as contemplated by Section 301, if the
Securities of a series provide for the payment of Additional Amounts, at least
10 days prior to the first Interest Payment Date with respect to that series of
Securities (or if the Securities of that series will not bear interest prior to
Maturity, the first day on which a payment of principal and any premium is
made), and at least 10 days prior to each
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date of payment of principal and any premium or interest if there has been any
change with respect to the matters set forth in the below-mentioned Officers'
Certificate, the Company will furnish the Trustee and the Company's principal
Paying Agent or Paying Agents, if other than the Trustee, with an Officers'
Certificate instructing the Trustee and such Paying Agent or Paying Agents
whether such payment of principal of and any premium or interest on the
Securities of that series shall be made to Holders of Securities of that series
or any related coupons who are not United States Persons without withholding for
or on account of any tax, assessment or other governmental charge described in
the Securities of the series. If any such withholding shall be required, then
such Officers' Certificate shall specify by country the amount, if any, required
to be withheld on such payments to such Holders of Securities of that series or
related coupons and the Company will pay to the Trustee or such Paying Agent the
Additional Amounts required by the terms of such Securities. If the Trustee or
any Paying Agent, as the case may be, shall not so receive the above-mentioned
Officers' Certificate, then the Trustee or such Paying Agent shall be entitled
(1) to assume that no such withholding or deduction is required with respect to
any payment of principal or interest with respect to any Securities of a series
or related coupons until it shall have received a certificate advising otherwise
and (2) to make all payments of principal and interest with respect to the
Securities of a series or related coupons without withholding or deductions
until otherwise advised. The Company covenants to indemnify the Trustee and any
Paying Agent for, and to hold them harmless against, any loss, liability or
expense reasonably incurred without negligence or bad faith on their part
arising out of or in connection with actions taken or omitted by any of them
pursuant to this Section 1010 or in reliance on any Officers' Certificate
furnished pursuant to this Section 1010 or in reliance on the Company's not
furnishing such an Officers' Certificate.
SECTION 10.11. WAIVER OF CERTAIN COVENANTS
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1004 to 1008, inclusive, with
respect to the Securities of any series if before or after the time for such
compliance the Holders of at least a majority in principal amount of all
outstanding Securities of such series, by act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such term, provision or condition shall remain in full force
and effect.
ARTICLE XI.
REDEMPTION OF SECURITIES
SECTION 11.1. APPLICABILITY OF ARTICLE
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any series)
in accordance with this Article Eleven.
SECTION 11.2. ELECTION TO REDEEM; NOTICE TO TRUSTEE
The election of the Company to redeem any Securities shall be evidenced
by or pursuant to a Board Resolution. In case of any redemption at the election
of the Company of less than all of the Securities of any series, the Company
shall, at least 45 days prior to the giving of the notice of redemption in
Section 1104 (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee of such Redemption Date and of the principal amount of
Securities of such series to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction.
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SECTION 11.3. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED
If less than all the Securities of any series originally issued on the
same day with the same terms are to be redeemed, the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Securities of such series originally issued on
such date with the same terms not previously called for redemption, by such
method as the Trustee shall deem fair and appropriate and which may provide for
the selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series.
The Trustee shall promptly notify the Company and the Security Registrar
(if other than itself) in writing of the Securities selected for redemption and,
in the case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
SECTION 11.4. NOTICE OF REDEMPTION
Notice of redemption shall be given in the manner provided in Section
106, not less than 30 days nor more than 60 days prior to the Redemption Date,
unless a shorter period is specified by the terms of such series established
pursuant to Section 301, to each Holder of Securities to be redeemed, but
failure to give such notice in the manner herein provided to the Holder of any
Security designated for redemption as a whole or in part, or any defect in the
notice to any such Holder, shall not affect the validity of the proceedings for
the redemption of any other Security or portion thereof.
Any notice that is mailed to the Holders of Securities in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not the Holder receives the notice.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price and Additional Amounts, if any, payable upon
redemption;
(c) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Security or Securities to be redeemed;
(d) in case any Security is to be redeemed in part only, that on and
after the Redemption Date, upon surrender of such Security, the holder will
receive, without a charge, a new Security or Securities of authorized
denominations for the principal amount thereof remaining unredeemed;
(e) that on the Redemption Date the Redemption Price and accrued
interest to the Redemption Date payable as provided in Section 1106, if any,
will become due and payable upon each such Security, or the portion thereof, to
be redeemed and, if applicable, that interest thereon shall cease to accrue on
and after said date;
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(f) the Place or Places of Payment where such Securities, together in
the case of Bearer Securities with all coupons appertaining thereto, if any,
maturing after the Redemption Date, are to be surrendered for payment of the
Redemption Price and accrued interest, if any;
(g) that the redemption is for a sinking fund, if such is the case;
(h) that, unless otherwise specified in such notice, Bearer Securities
of any series, if any, surrendered for redemption must be accompanied by all
coupons maturing subsequent to the date fixed for redemption or the amount of
any such missing coupon or coupons will be deducted from the Redemption Price,
unless security or indemnity satisfactory to the Company, the Trustee for such
series and any Paying Agent is furnished;
(i) if Bearer Securities of any series are to be redeemed and any
Securities of such series are not to be redeemed, and if such Bearer Securities
may be exchanged for Securities not subject to redemption on this Redemption
Date pursuant to Section 305 or otherwise, the last date, as determined by the
Company, on which such exchanges may be made;
(j) the CUSIP number of such Securities, if any; and
(k) if applicable, that a Holder of Securities who desires to convert
Securities for redemption must satisfy the requirements for conversion contained
in such Securities, the then-existing conversion price or rate, the place or
places where such Securities may be surrendered for conversion, and the date and
time when the option to convert shall expire.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 11.5. DEPOSIT OF REDEMPTION PRICE
On or before any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, which it may not do in the case of a sinking fund payment under Article
Twelve, segregate and hold in trust as provided in Section 1003) an amount of
money in the currency or currencies, currency unit or units or composite
currency or currencies in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the Securities of
such series) sufficient to pay on the Redemption Date the Redemption Price of,
and (except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities or portions thereof which are to be redeemed on
that date.
If any Securities called for redemption is converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held in
trust for the redemption of such Security shall be paid to the Company upon
Company Request or, if then held by the Company, shall be discharged from such
trust.
SECTION 11.6. SECURITIES PAYABLE ON REDEMPTION DATE
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified in the currency or currencies, currency unit
or units or composite currency or currencies in which the Securities of such
series are payable (except as otherwise specified pursuant to Section 301 for
the Securities of such series) (together with accrued interest, if any, to the
Redemption Date), and from and after such date (unless the Company shall default
in the payment of the Redemption Price and accrued interest) such Securities
shall, if the same were interest-bearing, cease to bear interest and the coupons
for such interest appertaining to any Bearer Securities so to be redeemed,
except to the extent provided below, shall be void. Upon
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surrender of any such Security for redemption in accordance with said notice,
together with all coupons, if any, appertaining thereto maturing after the
Redemption Date, such Security shall be paid by the Company at the Redemption
Price, together with accrued interest, if any, to the Redemption Date; PROVIDED,
HOWEVER, that installments of interest on Bearer Securities whose Stated
Maturity is on or prior to the Redemption Date shall be payable only at an
office or agency located outside the United States (except as otherwise provided
in Section 1002) and, unless otherwise specified as contemplated by Section 301,
only upon presentation and surrender of coupons for such interest; and PROVIDED
FURTHER that, except as otherwise provided with respect to Registered Securities
convertible into Common Stock or Preferred Stock, installments of interest on
Registered Securities whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant record dates according to their terms and the provisions of Section
307.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing coupon in
respect of which a deduction shall have been made from the Redemption Price,
such Holder shall be entitled to receive the amount so deducted; PROVIDED,
HOWEVER, that interest represented by coupons shall be payable only at an office
or agency located outside the United States (except as otherwise provided in
Section 1002) and, unless otherwise specified as contemplated by Section 301,
only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by or
provided in, as the case may be, the Security.
SECTION 11.7. SECURITIES REDEEMED IN PART
Any Registered Security which is to be redeemed only in part (pursuant
to the provisions of this Article Eleven or of Article Twelve) shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his or her attorney duly authorized in writing) and the Company shall execute
and the Trustee shall authenticate and deliver to the Holder of such Security
without service charge a new Security or Securities of the same series of any
authorized denomination as requested by such Holder in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered. If a Global Security is so surrendered, the Company
shall execute and the Trustee shall authenticate and deliver to the depositary,
without service charge, a new Global Security in a denomination equal to and in
exchange for the unredeemed portion of the principal of the Global Security so
surrendered.
ARTICLE XII.
SINKING FUNDS
SECTION 12.1. APPLICABILITY OF ARTICLE
The provisions of this Article Twelve shall be applicable to any sinking
fund for the retirement of Securities of a series except as otherwise specified
as contemplated by Section 301 for Securities of such series.
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The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of such Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of any Securities of any
series, the cash amount of any mandatory sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 12.2. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES
The Company may, in satisfaction of all or any part of any mandatory
sinking fund payment with respect to the Securities of a series, (1) deliver
Outstanding Securities of such series (other than any previously called for
redemption) together, in the case of any Bearer Securities of such series, with
all unmatured coupons appertaining thereto and (2) apply as a credit Securities
of such series which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, as
provided for by the terms of such Securities, or which have otherwise been
acquired by the Company; PROVIDED, HOWEVER, that such Securities so delivered or
applied as a credit have not been previously so credited. Such Securities shall
be received and credited for such purpose by the Trustee at the applicable
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such mandatory sinking fund payment shall
be reduced accordingly.
SECTION 12.3. REDEMPTION OF SECURITIES FOR SINKING FUND
Not less than 60 days prior to each sinking fund payment date for
Securities of any series, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series) and the portion
thereof, if any, which is to be satisfied by delivering and crediting Securities
of that series pursuant to Section 1202, and the optional amount, if any, to be
added in cash to the next ensuing mandatory sinking fund payment, and will also
deliver to the Trustee any Securities to be so delivered and credited. If such
Officers' Certificate shall specify an optional amount to be added in cash to
the next ensuing mandatory sinking fund payment, the Company shall thereupon be
obligated to pay the amount therein specified. Not less than 30 days before each
such sinking fund payment date the Trustee shall select the Securities to be
redeemed upon such sinking fund payment date in the manner specified in Section
1103 and cause notice of the redemption thereof to be given in the name of and
at the expense of the Company in the manner provided in Section 1104. Such
notice having been duly given, the redemption of such Securities shall be made
upon the terms and in the manner stated in Sections 1106 and 1107.
ARTICLE XIII.
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 13.1. APPLICABILITY OF ARTICLE
Repayment of Securities of any series before their Stated Maturity at
the option of Holders thereof shall be made in accordance with the applicable
terms, if any, of such Securities and (except as otherwise specified by the
terms of such series established pursuant to Section 301) in accordance with
this Article Thirteen.
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SECTION 13.2. REPAYMENT OF SECURITIES
Securities of any series subject to repayment in whole or in part at the
option of the Holders thereof will, unless otherwise provided in the terms of
such Securities, be repaid at a price equal to the principal amount thereof,
together with interest, if any, thereon accrued to the Repayment Date specified
in or pursuant to the terms of such Securities. The Company covenants that on or
prior to the Repayment Date it will deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 1003) an amount of money in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series) sufficient to pay the
principal (or, if so provided by the terms of the Securities of any series, a
percentage of the principal) of, and (except if the Repayment Date shall be an
Interest Payment Date) accrued interest on, all the Securities or portions
thereof, as the case may be, to be repaid on such date.
SECTION 13.3. EXERCISE OF OPTION
Securities of any series subject to repayment at the option of the
Holders thereof will contain an "Option to Elect Repayment" form on the reverse
of such Securities. In order for any Security to be repaid at the option of the
Holder, the Trustee must receive at the Place of Payment therefor specified in
the terms of such Security (or at such other place or places of which the
Company shall from time to time notify the Holders of such Securities) not
earlier than 60 days nor later than 30 days prior to the Repayment Date (1) the
Security so providing for such repayment together with any "Option to Elect
Repayment" or similar form on the reverse thereof duly completed by the Holder
(or by the Holder's attorney duly authorized in writing) or (2) a telegram,
telex, facsimile transmission or letter from a member of a national securities
exchange, or the National Association of Securities Dealers, Inc., or a
commercial bank or trust company in the United States setting forth the name of
the Holder of the Security, the principal amount of the Security, the principal
amount of the Security to be repaid, the CUSIP number, if any, or a description
of the tenor and terms of the Security, a statement that the option to elect
repayment is being exercised thereby and a guarantee that the Security to be
repaid, together with any duly completed "Option to Elect Repayment" or similar
form on the reverse of the Security, will be received by the Trustee not later
than the fifth Business Day after the date of such telegram, telex, facsimile
transmission or letter; PROVIDED, HOWEVER, that such telegram, telex, facsimile
transmission or letter shall only be effective if such Security and form duly
completed are received by the Trustee by such fifth Business Day. If less than
the entire principal amount of such Security is to be repaid in accordance with
the terms of such Security, the principal amount of such Security to be repaid,
in increments of the minimum denomination for Securities of such series, and the
denomination or denominations of the Security or Securities to be issued to the
Holder for the portion of the principal amount of such Security surrendered that
is not to be repaid, must be specified. The principal amount of any Security
providing for repayment at the option of the Holder thereof may not be repaid in
part if, following such repayment, the unpaid principal amount of such Security
would be less than the minimum authorized denomination of Securities of the
series of which such Security to be repaid is a part. Except as otherwise may be
provided by the terms of any Security providing for repayment at the option of
the Holder thereof, exercise or the repayment option by the Holder shall be
irrevocable unless waived by the Company.
SECTION 13.4. WHEN SECURITIES PRESENTED FOR REPAYMENT BECOME DUE AND PAYABLE
If Securities of any series providing for repayment at the option of the
Holders thereof shall have been surrendered as provided in this Article Thirteen
and as provided by or pursuant to the terms of such Securities, such Securities
or the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Company on the Repayment Date therein
specified, and on and after such Repayment Date (unless the Company shall
default in the payment of such Securities on such Repayment Date) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for
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such interest appertaining to any Bearer Securities so to be repaid, except to
the extent provided below, shall be void. Upon surrender of any such Security
for repayment in accordance with such provisions, together with all coupons, if
any, appertaining thereto maturing after the Repayment Date, the principal
amount of such Security so to be repaid shall be paid by the Company, together
with accrued interest, if any, to the Repayment Date; PROVIDED, HOWEVER, that
coupons whose Stated Maturity is on or prior to the Repayment Date shall be
payable only at an office or agency located outside the United States (except as
otherwise provided in Section 1002) and, unless otherwise specified pursuant to
Section 301, only upon presentation and surrender of such coupons; and PROVIDED
FURTHER that, in the case of Registered Securities, installments of interest, if
any, whose Stated Maturity is on or prior to the Repayment Date shall be payable
(but without interest thereon, unless the Company shall default in the payment
thereof) to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant record
dates according to their terms and the provisions of Section 307.
If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant coupons maturing after the Repayment Date, such
Security may be paid after deducting from the amount payable therefor as
provided in Section 1302 an amount equal to the face amount of all such missing
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there be furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to the Trustee or any
Paying Agent any such missing coupon in respect of which a deduction shall have
been made as provided in the preceding sentence, such Holder shall be entitled
to receive the amount so deducted; PROVIDED, HOWEVER, that interest represented
by coupons shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 1002) and, unless
otherwise specified as contemplated by Section 301, only upon presentation and
surrender of those coupons.
If the principal amount of any Security surrendered for repayment shall
not be so repaid upon surrender thereof, such principal amount (together with
interest, if any, thereon accrued to such Repayment Date) shall, until paid,
bear interest from the Repayment Date at the rate of interest borne by or
provided in, as the case may be, such Security.
SECTION 13.5. SECURITIES REPAID IN PART
Upon surrender of any Registered Security which is to be repaid in part
only, the Company shall execute and the Trustee shall authenticate and deliver
to the Holder of such Security, without service charge and at the expense of the
Company, a new Registered Security or Securities of the same series, of any
authorized denomination specified by the Holder, in an aggregate principal
amount equal to and in exchange for the portion of the principal of such
Security so surrendered which is not to be repaid.
ARTICLE XIV.
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 14.1. APPLICABILITY OF ARTICLE; COMPANY'S OPTION TO EFFECT DEFEASANCE OR
COVENANT DEFEASANCE
If, pursuant to Section 301, provision is made for either or both of (1)
defeasance of the Securities of or within a series under Section 1402 or (2)
covenant defeasance of the Securities of or within a series under Section 1403,
then the provisions of such Section or Sections, as the case may be, together
with the other provisions of this Article Fourteen (with such modifications
thereto as may be specified pursuant to Section 301 with respect to any
Securities), shall be applicable to such Securities and any coupons appertaining
thereto, and the Company may at its option by Board Resolution, at any time,
with respect to
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such Securities and any coupons appertaining thereto, elect to have Section 1402
(if applicable) or Section 1403 (if applicable) be applied to such Outstanding
Securities and any coupons appertaining thereto upon compliance with the
conditions set forth below in this Article Fourteen.
SECTION 14.2. DEFEASANCE
Upon the Company's exercise of the above option applicable to this
Section 1402 with respect to any Securities of or within a series, the Company
shall be deemed to have been discharged from its obligations with respect to
such Outstanding Securities and any coupons appertaining thereto on the date the
conditions set forth in Section 1404 are satisfied (hereinafter, "defeasance").
For this purpose, such defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by such Outstanding
Securities and any coupons appertaining thereto, which shall thereafter be
deemed to be "Outstanding" only for the purposes of Section 1405 and the other
Sections of this Indenture referred to in clauses (1) and (2) below, and to have
satisfied all of its other obligations under such Securities and any coupons
appertaining thereto and this Indenture insofar as such Securities and any
coupons appertaining thereto are concerned (and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging the same), except
for the following which shall survive until otherwise terminated or discharged
hereunder: (1) the rights of Holders of such Outstanding Securities and any
coupons appertaining thereto to receive, solely from the trust fund, described
in Section 1404 and as more fully set forth in such Section and Section 1405,
payments in respect of the principal of (and premium, if any) and interest, if
any, on such Securities and any coupons appertaining thereto when such payments
are due, (2) the Company's obligations with respect to such Securities under
Sections 304, 305, 306, 1002 and 1003 and with respect to the payment of
Additional Amounts, if any, on such Securities as contemplated by Section 1010,
(3) the rights, powers, trusts, duties and immunities of the Trustee hereunder,
and (4) this Article Fourteen. Subject to compliance with this Article Fourteen,
the Company may exercise its option under this Section 1402 notwithstanding the
prior exercise of its option under Section 1403 with respect to such Securities
and any coupons appertaining thereto.
SECTION 14.3. COVENANT DEFEASANCE
Upon the Company's exercise of the above option applicable to this
Section with respect to any Securities of or within a series, the Company shall
be released from its obligations under Sections 1004 to 1008, inclusive (other
than its obligations under Section 1004 to preserve and keep in full force and
effect its corporate existence), and, if specified pursuant to Section 301, its
obligations under any other covenant, with respect to such Outstanding
Securities and any coupons appertaining thereto on and after the date the
conditions set forth in Section 1404 are satisfied (hereinafter, "covenant
defeasance"), and such Securities and any coupons appertaining thereto shall
thereafter be deemed to be not "Outstanding" for the purposes of any direction,
waiver, consent or declaration or Act of Holders (and the consequences of any
thereof) in connection with Sections 1004 to 1008, inclusive (other than its
obligations under Section 1004 to preserve and keep in full force and effect its
corporate existence), or such other covenant, but shall continue to be deemed
"Outstanding" for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to such Outstanding Securities and any
coupons appertaining thereto, the Company may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such Section (other than its obligations under Section 1004 to preserve and keep
in full force and effect its corporate existence) or such other covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such Section or such other covenant or by reason of reference in any such
Section or such other covenant to any other provision herein or in any other
document, and such omission to comply shall not constitute a default or an Event
of Default under Section 501(4) or 501(8) or otherwise, as the case may be, but
the remainder of this Indenture and such Securities and any coupons appertaining
thereto shall be unaffected thereby.
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SECTION 14.4. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE
The following shall be the conditions to application of Section 1402 or
Section 1403 to any Outstanding Securities of or within a series and any coupons
appertaining thereto:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 607 who shall agree to comply with the provisions of this Article
Fourteen applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities and any coupons appertaining
thereto, (A) an amount in such currency, currencies or currency unit or
composite currency in which such Securities and any coupons appertaining thereto
and installments of principal and interest thereon are payable at Stated
Maturity, or (B) Government Obligations applicable to such Securities and
coupons appertaining thereto (determined on the basis of the currency,
currencies or currency unit in which such Securities and coupons appertaining
thereto and installments of principal and interest thereon are payable at Stated
Maturity) which through the scheduled payment of principal and interest in
respect thereof in accordance with their terms will provide, not later than one
day before the due date of any payment of principal of (and premium, if any) and
interest, if any, on such Securities and any coupons appertaining thereto, or
(C) a combination thereof, in any case, in an amount sufficient, without
consideration of any reinvestment of such principal and interest, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the Trustee (or other qualifying Trustee) to pay
and discharge, (i) the principal of (and premium, if any) and interest, if any,
on such Outstanding Securities and any coupons appertaining thereto on the
Stated Maturity of such principal or installment of principal or interest and
(ii) any mandatory sinking fund payments or analogous payments applicable to
such Outstanding Securities and any coupons appertaining thereto on the day on
which such payments are due and payable in accordance with the terms of this
Indenture and of such Securities and any coupons appertaining thereto.
(b) Such defeasance or covenant defeasance shall not result in a breach
or violation of, or constitute a default under, this Indenture or any other
material agreement or instrument to which the Company is a party or by which it
is bound.
(c) No Event of Default or event which with notice or lapse of time or
both would become an Event of Default with respect to such Securities and any
coupons appertaining thereto shall have occurred and be continuing on the date
of such deposit or, insofar as Sections 501(6) and 501(7) are concerned, at any
time during the period ending on the 91st day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied until the
expiration of such period).
(d) In the case of an election under Section 1402, the Company shall
have delivered to the Trustee an Opinion of Counsel of outside counsel of
recognized standing with respect to federal income tax matters stating that
subsequent to the date of this Indenture, (A) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (B) there
has been a change in the applicable federal income tax law, in either case to
the effect that, and based thereon such opinion shall confirm that, the Holders
of such Outstanding Securities and any coupons appertaining thereto will not
recognize income, gain or loss for federal income tax purposes as a result of
such defeasance and will be subject to federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
defeasance had not occurred.
(e) In the case of an election under Section 1403, the Company shall
have delivered to the Trustee an Opinion of Counsel of outside counsel of
recognized standing with respect to federal income tax matters to the effect
that the Holders of such Outstanding Securities and any coupons appertaining
thereto will not recognize income, gain or loss for federal income tax purposes
as a result of such covenant defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would have
been the case if such covenant defeasance had not occurred.
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(f) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 1402 or the covenant defeasance under
Section 1403 (as the case may be) have been complied with and an Opinion of
Counsel to the effect that either (A) as a result of a deposit pursuant to
clause (1) above and the related exercise of the Company's option under Section
1402 or 1403 (as the case may be), registration is not required under the
Investment Company Act of 1940, as amended, by the Company, with respect to the
trust funds representing such deposit or by the Trustee for such trust funds or
(B) all necessary registrations under said act have been effected.
(g) Such defeasance or covenant defeasance, as the case may be, shall
not cause the Trustee to have a conflicting interest for purposes of the TIA
with respect to any securities of the Company.
(h) Notwithstanding any other provisions of this Section 1404, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be imposed
on the Company in connection therewith pursuant to Section 301.
Any deposits with the Trustee (or other qualifying trustee) referred to
in paragraph (1) above shall be made under the terms of an escrow trust
agreement in form and substance satisfactory to the Trustee.
SECTION 14.5. DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS
Subject to the provisions of the last paragraph of Section 1003, all
money and Government Obligations (or other property as may be provided pursuant
to Section 301) (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 1405, the
"Trustee") pursuant to Section 1404 in respect of any Outstanding Securities of
any series and any coupons appertaining thereto shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Securities and
any coupons appertaining thereto and this Indenture, to the payment, either
directly or through any Paying Agent (other than the Company) as the Trustee may
determine, to the Holders of such Securities and any coupons appertaining
thereto of all sums due and to become due thereon in respect of principal (and
premium, if any) and interest and Additional Amounts, if any, but such money
need not be segregated from other funds except to the extent required by law.
Unless otherwise specified with respect to any Security pursuant to
Section 301, if, after a deposit referred to in Section 1404(1) has been made,
(1) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 301 or the terms of such
Security to receive payment in a currency or currency unit or composite currency
other than that in which the deposit pursuant to Section 1404(1) has been made
in respect of such Security or (2) a Conversion Event occurs in respect of the
currency or currency unit or composite currency in which the deposit pursuant to
Section 1404(1) has been made, the indebtedness represented by such Security and
any coupons appertaining thereto shall be deemed to have been, and will be,
fully discharged and satisfied through the payment of the principal of (and
premium, if any), and interest, if any, on such Security as the same becomes due
out of the proceeds yielded by converting (from time to time as specified below
in the case of any such election) the amount or other property deposited in
respect of such Security into the currency or currency unit or composite
currency in which such Security becomes payable as a result of such election or
Conversion Event based on the applicable market exchange rate for such currency
or currency unit or composite currency in effect on the second Business Day
prior to each payment date.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the money or Government Obligations
or other property deposited pursuant to Section 1404 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of such Outstanding
Securities and any coupons appertaining thereto.
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Anything in this Article Fourteen to the contrary notwithstanding,
subject to Section 606, the Trustee shall deliver or pay to the Company from
time to time upon Company Request any money or Government Obligations (or other
property and any proceeds therefrom) held by it as provided in Section 1404
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect a defeasance or covenant defeasance, as applicable, in
accordance with this Article Fourteen.
SECTION 14.6. REINSTATEMENT
If (i) the Trustee (or other qualifying trustee appointed pursuant to
Section 1404) or any Paying Agent is unable to apply any moneys or Government
Obligations or other property deposited pursuant to Section 1404(1) to pay any
principal of, premium, if any, interest on or Additional Amounts with respect to
any Securities or coupons appertaining thereto by reason of any legal proceeding
or any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application or (ii) an event or
condition which constitutes an Event of Default or event which, with notice or
lapse of time or both, would constitute an Event of Default under Section 501(6)
or (7) shall occur on or before the 91st day after the date of such deposit,
then the Company's obligations under this Indenture (insofar as relates to such
Securities) and under such Securities and any coupons appertaining thereto shall
be revived and reinstated as though no deposit had occurred, until (solely in
the case of clause (i) above) such time as the Trustee (or other qualifying
trustee) or Paying Agent is permitted to apply all such moneys and Government
Obligations or other property to pay the principal of, premium, if any, interest
on, and Additional Amounts, if any, with respect to such Securities and any
coupons appertaining thereto as contemplated by this Article; PROVIDED, HOWEVER,
that, if the Company makes any payment of the principal, premium, if any,
interest or Additional Amounts with respect to any such Securities or coupons
appertaining thereto following the reinstatement of its obligations as
aforesaid, the Company shall be subrogated to the rights of the Holders of such
Securities and coupons to receive such payment from the funds held by the
Trustee (or other qualifying trustee) or Paying Agent.
ARTICLE XV.
MEETINGS OF HOLDERS OF SECURITIES
SECTION 15.1. PURPOSES FOR WHICH MEETINGS MAY BE CALLED
A meeting of Holders of Securities of any series may be called at any
time and from time to time pursuant to this Article Fifteen to make, give or
take any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be made, given or taken by Holders of
Securities of such series.
SECTION 15.2. CALL, NOTICE AND PLACE OF MEETINGS
(a) The Trustee may at any time call a meeting of Holders of Securities
of any series for any purpose specified in Section 1501, to be held at such time
and at such place as the Trustee shall determine. Notice of every meeting of
Holders of Securities of any series, setting forth the time and the place of
such meeting and in general terms the action proposed to be taken at such
meeting, shall be given, in the manner provided in Section 106, not less than 20
nor more than 180 days prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution, or
the Holders of at least 10% in principal amount of the Outstanding Securities of
any series shall have requested the Trustee to call a meeting of the Holders of
Securities of such series for any purpose specified in Section 1501, by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee
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shall not have made the first publication of the notice of such meeting within
20 days after receipt of such request or shall not thereafter proceed to cause
the meeting to be held as provided herein, then the Company or the Holders of
Securities of such series in the amount above specified, as the case may be, may
determine the time and the place for such meeting and may call such meeting for
such purposes by giving notice thereof as provided in clause (1) of this Section
1502.
SECTION 15.3. PERSONS ENTITLED TO VOTE AT MEETINGS
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series or (2) a Person appointed by an instrument in writing as proxy for a
Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.
SECTION 15.4. QUORUM; ACTION
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; PROVIDED, HOWEVER, that if any action is
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of not less than a
specified percentage in principal amount of the Outstanding Securities of a
series, the Persons entitled to vote such specified percentage in principal
amount of the Outstanding Securities of such series shall constitute a quorum.
In the absence of a quorum within 30 minutes after the time appointed for any
such meeting, the meeting shall, if convened at the request of Holders of
Securities of such series, be dissolved. In any other case the meeting may be
adjourned for a period of not less than 10 days as determined by the chairman of
the meeting prior to the adjournment of such meeting. In the absence of a quorum
at the reconvening of any such adjourned meeting, such adjourned meeting may be
further adjourned for a period of not less than 10 days. Notice of the
reconvening of any adjourned meeting shall be given as provided in Section
1502(2), except that such notice need be given only once not less than five days
prior to the date on which the meeting is scheduled to be reconvened.
Except as limited by the proviso to Section 902, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Securities of that series;
PROVIDED, HOWEVER, that, except as limited by the proviso to Section 902, any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action which this Indenture expressly provides
may be made, given or taken by the Holders of a specified percentage, which is
less than a majority, in principal amount of the Outstanding Securities of a
series may be adopted at a meeting or an adjourned meeting duly reconvened and
at which a quorum is present as aforesaid by the affirmative vote of the Holders
of such specified percentage in principal amount of the Outstanding Securities
of that series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section 1504 shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 1504, if any
action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made, given
or taken by the Holders of such series and one or more additional series:
(a) there shall be no minimum quorum requirement for such meeting and
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(b) the principal amount of the Outstanding Securities of all such
series that are entitled to vote in favor of such request, demand,
authorization, direction, notice, consent, waiver or other action shall be taken
into account in determining whether such request, demand, authorization,
direction, notice, consent, waiver or other action has been made, given or taken
under this Indenture.
SECTION 15.5. DETERMINATION OF VOTING RIGHTS, CONDUCT AND ADJOURNMENT OF
MEETINGS
(a) Notwithstanding any provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspector of elections, the submission and examination
of proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holding
of Securities shall be proved in the manner specified in Section 104 and the
appointment of any proxy shall be proved in the manner specified in Section 104
or by having the signature of the Person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by Section 104 to
certify to the holding of Bearer Securities. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 104 or other proof.
(b) The Trustee shall, by an instrument in writing appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 1502(2), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or proxy
shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Securities of such series held or represented by him; PROVIDED,
HOWEVER, that no vote shall be cast or counted at any meeting in respect of any
Security challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1502 at which a quorum is present may be adjourned from time
to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting, and the
meeting may be held as so adjourned without further notice.
SECTION 15.6. COUNTING VOTES AND RECORDING ACTION OF MEETINGS
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the fact, setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1502 and, if
applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
PAN PACIFIC RETAIL PROPERTIES, INC.
By: ________________________________
Name: _______________________________
Title: ______________________________
________________________, as Trustee
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EXHIBIT A-1
FORMS OF CERTIFICATION
FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, as of the date hereof, and except as set forth
below, the above-captioned Securities held by you for our account are owned by
(i) person(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States federal income taxation regardless of its source
("United States Person(s)"), (ii) United States Person(s) that are (a) foreign
branches of United States financial institutions (financial institutions, as
defined in United States Treasury Regulations Section 1.165-12(c)(1)(v), are
herein referred to as "financial institutions") purchasing for their own account
or for resale or (b) United States Person(s) who acquired the Securities through
foreign branches of United States financial institutions and who hold the
Securities through such United States financial institutions on the date hereof
(and in either case (a) or (b), each such United States financial institution
hereby agrees, on its own behalf or through its agent, that you may advise Pan
Pacific Retail Properties, Inc. or its agent that such financial institution
will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the
United States Internal Revenue Code of 1986, as amended, and the regulations
thereunder), or (iii) are owned by United States or foreign financial
institution(s) for purposes of resale during the restricted period (as defined
in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and, in
addition, if the owner is a United States or foreign financial institution
described in clause (iii) above (whether or not also described in clause (i) or
(ii)), this is to further certify that such financial institution has not
acquired the Securities for purposes of resale directly or indirectly to a
United States Person or to a person within the United States or its possessions.
As used herein, "United States" means the United States of America
(including the states and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the
above-captioned Securities held by you for our account in accordance with your
Operating Procedures if any applicable statement herein is not correct on such
date, and in the absence of any such notification it may be assumed that this
certification applies as of such date.
This certificate excepts and does not relate to [US$ ____________] of
such interest in the above-captioned Securities in respect of which we are not
able to certify and as to which we understand an exchange for an interest in a
permanent Global Security or an exchange for and delivery of definitive
Securities (or, if relevant, collection of any interest) cannot be made until we
do so certify.
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: ________________________________
[To be dated no earlier than the 15th day prior to (i) the Exchange Date
or (ii) the relevant Interest Payment Date occurring prior to the Exchange Date,
as applicable]
[Name of Person Making Certification]
______________________________________
(Authorized Signator)
Name: ________________________________
Title: _______________________________
A-1-1
<PAGE> 72
EXHIBIT A-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO OBTAIN
INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, based solely on written certifications that we
have received in writing, by tested telex or by electronic transmission from
each of the persons appearing in our records as persons entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
in the form attached hereto, as of the date hereof, [US$] _____________________
principal amount of the above-captioned Securities is owned by (i) person(s)
that are not citizens or residents of the United States, domestic partnerships,
domestic corporations or any estate or trust the income of which is subject to
United States federal income taxation regardless of its source ("United States
Person(s)"), (ii) United States Person(s) that are (a) foreign branches of
United States financial institutions (financial institutions, as defined in
United States Treasury Regulations Section 1.165-12(c)(1)(v), are herein
referred to as "financial institutions") purchasing for their own account or for
resale or (b) United States Person(s) who acquired the Securities through
foreign branches of United States financial institutions and who hold the
Securities through such United States financial institutions on the date hereof
(and in either case (a) or (b), each such financial institution has agreed, on
its own behalf or through its agent, that we may advise Pan Pacific Retail
Properties, Inc. or its agent that such financial institution will comply with
the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue
Code of 1986, as amended, and the regulations thereunder), or (iii) United
States or foreign financial institution(s) for purposes of resale during the
restricted period (as defined in United States Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), and, to the further effect, that financial institutions
described in clause (iii) (whether or not also described in clause (i) or (ii))
have certified that they have not acquired the Securities for purposes of resale
directly or indirectly to a United States Person or to a person within the
United States or its possessions.
As used herein, "United States" means the United States of America
(including the states and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any portion of the
temporary Global Security representing the above-captioned Securities excepted
in the above-referenced certificates of Member Organizations and (ii) as of the
date hereof we have not received any notification from any of our Member
Organizations to the effect that the statements made by such Member
Organizations with respect to any portion of the part submitted herewith for
exchange (or, if relevant, collection of any interest) are no longer true and
cannot be relied upon as of the date hereof.
We understand that this certification is required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: _________________________________
[To be dated no earlier than the Exchange Date or the relevant Interest
Payment Date occurring prior to the Exchange Date, as applicable]
[Morgan Guaranty Trust Company of
New York, Brussels Office,] as
Operator of the Euroclear System
[CEDEL S.A.]
By: _______________________________
A-2-1
<PAGE> 1
EXHIBIT 5.1
[LETTERHEAD OF BALLARD SPAHR ANDREWS & INGERSOLL, LLP]
FILE NUMBER
868555
October 5, 1998
Pan Pacific Retail Properties, Inc.
1631-B South Melrose Drive
Vista, California 92083
Re: Registration Statement on Form S-3
Registration No. 333-63743
-----------------------------------
Ladies and Gentlemen:
We have served as Maryland counsel to Pan Pacific Retail
Properties, Inc., a Maryland corporation (the "Company"), in connection with
certain matters of Maryland law arising out of the offer by the Company from
time to time in one or more classes or series of (i) its debt securities (the
"Debt Securities"), (ii) shares of its Common Stock, $0.01 par value per share
(the "Common Stock"), (iii) shares of its Preferred Stock, $0.01 par value per
share (the "Preferred Stock"), (iv) shares of Preferred Stock represented by
Depositary Shares (such shares of Preferred Stock, the "Depositary Shares"), and
(v) warrants to purchase Common Stock or Preferred Stock (the "Warrants") in
amounts, at prices and on terms to be determined at the time of Offering, with
an aggregate public offering price of up to $400,000,000 (collectively, the
"Securities"), covered by the above-referenced Registration Statement, and all
amendments thereto (the "Registration Statement"), under the Securities Act of
1933, as amended (the "1933 Act"). Unless otherwise defined herein, capitalized
terms used herein shall have the meanings assigned to them in the Registration
Statement.
In connection with our representation of the Company, and as a
basis for the opinion hereinafter set forth, we have examined originals, or
copies certified or otherwise identified to our satisfaction, of the following
documents (hereinafter collectively referred to as the "Documents"):
1. The Registration Statement, including the related form of
prospectus included therein, in the form in which it was transmitted to the
Securities and Exchange Commission (the "Commission") under the 1933 Act;
2. The charter of the Company, certified as of a recent date by
the State Department of Assessments and Taxation of Maryland (the "SDAT");
<PAGE> 2
Pan Pacific Retail Properties, Inc.
October 5, 1998
Page 2
3. The Bylaws of the Company, certified as of a recent date by an
officer of the Company;
4. Resolutions adopted by the Board of Directors of the Company
relating to the sale, issuance and registration of the Securities, certified as
of a recent date by an officer of the Company;
5. The form of certificate representing a share of the Common
Stock, certified as of a recent date by an officer of the Company;
6. The form of Indenture to be executed by the Company in
connection with the issuance of the Debt Securities, certified as of a recent
date by an officer of the Company;
7. A certificate of the SDAT as to the good standing of the
Company, dated as of a recent date;
8. A certificate executed by an officer of the Company, dated as
of the date hereof; and
9. Such other documents and matters as we have deemed necessary
or appropriate to express the opinion set forth in this letter, subject to the
assumptions, limitations and qualifications stated herein.
In expressing the opinion set forth below, we have assumed, and
so far as is known to us there are no facts inconsistent with, the following:
1. Each individual executing any of the Documents, whether on
behalf of such individual or any other person, is legally competent to do so.
2. Each individual executing any of the Documents on behalf of a
party (other than the Company) is duly authorized to do so.
3. Each of the parties (other than the Company) executing any of
the Documents has duly and validly executed and delivered each of the Documents
to which such party is a signatory, and such party's obligations set forth
therein are legal, valid and binding and are enforceable in accordance with all
stated terms.
4. Any Documents submitted to us as originals are authentic. The
form and content of any Documents submitted to us as unexecuted drafts will not
differ in any respect relevant to this opinion from the form and content of such
Documents upon execution and delivery. All Documents submitted to us as
certified or photostatic copies conform to the original documents. All
signatures on all such Documents are genuine. All public records reviewed or
relied upon by us or on our behalf are true and complete. All statements and
information contained in the Documents are true and complete. There has been no
oral or written modification of or amendment to any of the Documents, and there
has been no waiver of any provision of any of the Documents, by action or
conduct of the parties or otherwise.
<PAGE> 3
Pan Pacific Retail Properties, Inc.
October 5, 1998
Page 3
5. The issuance and certain terms of the Securities to be issued
by the Company from time to time will be authorized and approved by the Board of
Directors of the Company, or a duly authorized committee thereof, in accordance
with and not in violation of the Maryland General Corporation Law (the "MGCL"),
the Charter and the Bylaws (with such approval referred to herein as the
"Corporate Proceedings").
6. The form of certificate representing a share of the Preferred
Stock will conform in all respects to the requirements of the MGCL.
7. The form of Warrant Agreement to be executed by the Company in
connection with the issuance of the Warrants will conform in all respects to the
requirements of the MGCL.
8. The form of Deposit Agreement to be executed by the Company in
connection with the issuance of the Depositary Shares will conform in all
respects to the requirements of the MGCL.
The phrase "known to us" is limited to the actual knowledge,
without independent inquiry, of the lawyers at our firm who have performed legal
services in connection with the issuance of this opinion.
Based upon the foregoing, and subject to the assumptions,
limitations and qualifications stated herein, it is our opinion that:
1. The Company is a corporation duly incorporated and existing
under and by virtue of the laws of the State of Maryland and is in good standing
with the SDAT.
2. Upon completion of the Corporate Proceedings relating to any
of the Securities that are Common Stock (including any Common Stock which may be
issued upon conversion of any other Securities) and upon the due execution,
countersignature and delivery of certificates representing the Common Stock, the
Common Stock will be duly authorized and, when and if delivered in accordance
with the resolutions of the Board of Directors, or a duly authorized committee
thereof, authorizing their issuance, will be (assuming that, upon issuance, the
total number of shares of Common Stock issued and outstanding will not exceed
the total number of shares of Common Stock that the Company is then authorized
to issue) validly issued, fully paid and non-assessable.
3. Upon completion of the Corporate Proceedings relating to any
of the Securities that are Preferred Stock (including any Preferred Stock which
may be issued upon conversion of other Securities) and upon the due execution,
countersignature and delivery of certificates representing the Preferred Stock,
the Preferred Stock will be duly authorized and, when and if delivered in
accordance with the resolutions of the Board of Directors, or a duly
authorized committee thereof, authorizing their issuance, will be (assuming
that, upon issuance, the total number of shares of Preferred Stock issued and
outstanding will not exceed the total number of shares of Preferred Stock that
the Company is then authorized to issue) validly issued, fully paid and
non-assessable.
<PAGE> 4
Pan Pacific Retail Properties, Inc.
October 5, 1998
Page 4
4. Upon completion of the Corporate Proceedings relating to any
of the Securities that are Warrants and upon the due execution, countersignature
and delivery of certificates evidencing the Warrants, the Warrants will be duly
authorized and, when and if delivered in accordance with the resolutions of the
Board of Directors, or a duly authorized committee thereof, authorizing their
issuance, will be (assuming that upon exercise of the Warrants, the total number
of shares of either Common Stock or Preferred Stock issued and outstanding will
not exceed the total number of shares of Common Stock or Preferred Stock that
the Company is then authorized to issue) validly issued, fully paid and
non-assessable.
5. Upon completion of the Corporate Proceedings relating to any
of the Securities that are Depositary Shares and upon the due execution,
countersignature and delivery of Depositary receipts evidencing the Depositary
Shares, the Depositary Shares will be duly authorized and, when and if delivered
in accordance with the resolutions of the Board of Directors, or a duly
authorized committee thereof, authorizing their issuance, will be (assumed that
upon issuance, the total number of shares of Preferred Stock represented by the
Depositary Shares will not exceed the total number of shares of Preferred Stock
that the Company is then authorized to issue) validly issued, fully paid and
non-assessable.
6. Upon completion of the Corporate Proceedings relating to any
of the Securities that are Debt Securities and upon the due execution,
countersignature and delivery of certificates representing the Debt Securities,
the Debt Securities will be duly authorized.
The foregoing opinion is limited to the substantive laws of the
State of Maryland and we do not express any opinion herein concerning any other
law. We express no opinion as to the applicability or effect of any federal or
state securities laws, including the securities laws of the State of Maryland,
or as to federal or state laws regarding fraudulent transfers. To the extent
that any matter as to which our opinion is expressed herein would be governed by
any jurisdiction other than the State of Maryland, we do not express any opinion
on such matter.
We assume no obligation to supplement this opinion if any
applicable law changes after the date hereof or if we become aware of any fact
that might change the opinion expressed herein after the date hereof.
This opinion is being furnished to you solely for submission to
the Commission as an exhibit to the Registration Statement and, accordingly, may
not be relied upon by, quoted in any manner to, or delivered to any other person
or entity (other than Latham & Watkins, counsel to the Company) without, in each
instance, our prior written consent.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the use of the name of our firm therein in the
section entitled "Legal Matters" in the Registration Statement. In giving this
consent, we do not admit that we are within the category of persons whose
consent is required by Section 7 of the 1933 Act.
Very truly yours,
/s/ Ballard Spahr Andrews & Ingersoll, LLP
------------------------------------------
Ballard Spahr Andrews & Ingersoll, LLP
<PAGE> 1
EXHIBIT 5.2
LATHAM & WATKINS
ATTORNEYS AT LAW
650 TOWN CENTER DRIVE, SUITE 2000
COSTA MESA, CALIFORNIA 92626-I925
TELEPHONE (7I4) 540-I235
FAX (7I4) 755-8290
October 5, 1998
File No. 025233-0003
Pan Pacific Retail Properties, Inc.
1631-B South Melrose Drive
Vista, California 92083
Re: $400,000,000 Aggregate Offering Price of
Securities of Pan Pacific Retail Properties, Inc.
-------------------------------------------------
Gentlemen:
We have acted as special counsel for Pan Pacific Retail
Properties, Inc. (the "Company") in connection with the Registration Statement
on Form S-3 (the "Registration Statement") filed with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "1933 Act"), relating to the offering from time to time, as set
forth in the prospectus contained in the Registration Statement (the
"Prospectus") and as to be set forth in one or more supplements to the
Prospectus (each a "Prospectus Supplement"), by the Company of up to
$400,000,000 aggregate offering price of one or more series or classes of (i)
debt securities ("Debt Securities"), (ii) shares of common stock, $0.01 par
value per share (the "Common Stock"), (iii) shares of preferred stock , $0.01
par value per share (the "Preferred Stock"), (iv) shares of Preferred Stock
represented by Depositary Shares (the "Depositary Shares"), and (v) warrants to
purchase shares of Common Stock or Preferred Stock (the "Warrants"). Except as
otherwise expressly indicated, the term Registration Statement shall include all
documents incorporated or deemed to be included by reference therein.
The Debt Securities will be issued under one or more indentures,
each in the form filed as an exhibit to the Registration Statement (each, an
Indenture) between the Company and one or more trustees (each, a "Trustee").
This opinion is based on various facts and assumptions, and is conditioned upon
certain representations made by the Company as to factual matters.
<PAGE> 2
Pan Pacific Retail Properties, Inc.
October 5, 1998
Page 2
In our capacity as the Company's counsel, we have made such legal
and factual examinations and inquiries as we have deemed necessary or
appropriate for purposes of this opinion, except where a statement is qualified
as to knowledge or information or awareness, in which case we have not
undertaken any independent investigation to determine the accuracy of any such
statement except as otherwise expressly indicated. In our examination, we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, and the conformity to authentic original documents
of all documents submitted to us as copies. We have examined originals or
copies, certified or otherwise identified to our satisfaction, of such
documents, corporate records, certificates of public officials and other
instruments as we have deemed necessary or advisable for purposes of this
opinion.
We are opining herein as to the effect on the subject transaction
only of the federal laws of the United States and the internal laws of the State
of New York, and we express no opinion with respect to the applicability
thereto, or the effect thereon, of the laws of any other jurisdiction.
Subject to the foregoing and the other matters set forth herein,
it is our opinion that, as of the date hereof, when the Company and a Trustee
execute and deliver an Indenture and the specific terms of a particular Debt
Security have been duly authorized and established in accordance with the
Indenture, and the Debt Security has been duly authorized, executed,
authenticated, issued and delivered in accordance with the Indenture, against
payment therefor or upon exchange in accordance with the applicable underwriting
or other agreement, the Debt Security will constitute the valid and binding
obligation of the Company.
In connection with the foregoing opinion, we have assumed that,
at or prior to the time of the delivery of any Debt Security, (i) the Board of
Directors of the Company shall have duly established the terms of the Debt
Security and duly authorized the issuance and sale of the Debt Security, in each
case in accordance with Maryland law, and such authorization shall not have been
modified or rescinded; (ii) the Registration Statement shall have been declared
effective and such effectiveness shall not have been terminated or rescinded;
(iii) the applicable Indenture, if any, shall have been duly authorized,
executed and delivered in accordance with Maryland law and the applicable
Trustee shall have been qualified under the Trust Indenture Act of 1939, as
amended; (iv) there will not have occurred any change in law affecting the
validity or enforceability of the Debt Security; and (v) the Debt Security is
unsecured. We have also assumed that none of the terms of any Debt Security to
be established subsequent to the date hereof, nor the issuance and delivery of
the Debt Security, nor the compliance by the Company with the terms of the Debt
Security will violate any applicable law or will result in a violation of any
provision of any instrument or agreement then binding upon the Company, or any
restriction imposed by any court or governmental body having jurisdiction over
the Company.
<PAGE> 3
Pan Pacific Retail Properties, Inc.
October 5, 1998
Page 3
The foregoing opinion is subject to the following exceptions,
limitations and qualifications: (i) the effect of bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights and remedies of
creditors; (ii) the effect of general principles of equity, whether enforcement
is considered in a proceeding in equity or law, and the discretion of the court
before which any proceeding therefor may be brought; (iii) the unenforceability
under certain circumstances under law or court decisions of provisions providing
for the indemnification of or contribution to a party with respect to a
liability where such indemnification or contribution is contrary to public
policy; (iv) we express no opinion concerning the enforceability of the waiver
of rights or defenses contained in the Indenture; and (v) we express no opinion
with respect to whether acceleration of the Debt Securities may affect the
collectibility of any portion of the stated principal amount thereof which might
be determined to constitute unearned interest thereon.
To the extent the obligations of the Company under the Debt
Securities may be dependent upon such matters, we assume for purposes of this
opinion that the Trustee under the Indenture is duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization; that
the Trustee is duly qualified to engage in the activities contemplated by the
Indenture; that the Indenture has been duly authorized, executed and delivered
by the Trustee and constitutes a legally valid, binding and enforceable
obligation of the Trustee enforceable against the Trustee in accordance with its
terms; that the Trustee is in compliance, generally and with respect to acting
as trustee under the Indenture, with all applicable laws and regulations; and
that the Trustee has the requisite organizational and legal power and authority
to perform its obligations under the Indenture.
This opinion is rendered only to you for submission to the
Commission as an exhibit to the Registration Statement. This opinion may not be
relied upon by you for any other purpose, or furnished to, quoted to or relied
upon by any other person, firm or corporation for any purpose, without our prior
written consent.
We hereby consent to the use of this opinion as Exhibit 5.2 to
the Registration Statement and to the use of our name therein.
Very truly yours,
/s/ LATHAM & WATKINS
---------------------------------
Latham & Watkins
<PAGE> 1
EXHIBIT 8.1
LATHAM & WATKINS
ATTORNEYS AT LAW
650 TOWN CENTER DRIVE, SUITE 2000
COSTA MESA, CALIFORNIA 92626-1925
TELEPHONE (714) 540-1235
FAX (714) 755-8290
October 5, 1998
Pan Pacific Retail Properties, Inc.
1631-B S. Melrose Drive
Vista, California 92083
Re: Pan Pacific Retail Properties, Inc.
-----------------------------------
Ladies and Gentlemen:
We have acted as tax counsel to Pan Pacific Retail Properties, Inc.,
a Maryland corporation (the "Company"), in connection with the filing of a
registration statement on Form S-3, File No. 333-63743, under the Securities
Act of 1933, as amended (the "1933 Act"), filed with the Securities and
Exchange Commission (the "Commission") on September 18, 1998, as amended and
supplemented as of the date hereof (the "Registration Statement").
You have requested our opinion concerning certain of the federal
income tax consequences to the Company in connection with the Company's
election to be taxed as a real estate investment trust. This opinion is based
on various facts and assumptions, including the facts set forth in the
Registration Statement concerning the business, assets and governing documents
of the Company. We have also been furnished with, and with your consent, have
relied upon, certain representations made by the Company and the subsidiaries
of the Company as to certain factual matters through a certificate of an
officer of the Company (the "Officer's Certificate").
In our capacity as tax counsel to the Company, we have made such
legal and factual examinations and inquiries, including an examination of
originals or copies certified or otherwise identified to our satisfaction of
such documents, corporate records and other instruments, as we have deemed
necessary or appropriate for purposes of this opinion. In our examinations, we
have assumed the authenticity of all documents submitted to us as originals, the
<PAGE> 2
October 5, 1998
Page 2
genuineness of all signatures thereon, the legal capacity of natural persons
executing such documents and the conformity to authentic original documents of
all documents submitted to us as copies.
We are opining herein as to the effect on the subject transaction
only of the federal income tax laws of the United States, and we express no
opinion with respect to the applicability thereto, or the effect thereon, of
other federal laws, the laws of any state or other jurisdiction or as to any
matters of municipal law or the laws of any other local agencies within any
state.
Based upon the facts set forth in the Registration Statement and
Officer's Certificate, it is our opinion that the statements set forth in the
Registration Statement under the caption "Certain Federal Income Tax
Consequences to the Company of its REIT Election," to the extent such
statements constitute matters of law, summaries of legal matters, documents or
proceedings, or legal conclusions, have been reviewed by us and are correct in
all material respects.
No opinion is expressed as to any matter not discussed herein.
This opinion is rendered to you as of the date of this letter, and we
undertake no obligation to update this opinion subsequent to the date hereof.
This opinion is based on various statutory provisions, regulations promulgated
thereunder and interpretations thereof by the Internal Revenue Service and the
courts having jurisdiction over such matters, all of which are subject to
change either prospectively or retroactively. Any such change may affect the
conclusions stated herein. Also, any variation or difference in the facts from
those set forth in the Registration Statement or Officer's Certificate may
affect the conclusions stated herein. Moreover, the Company's qualification and
taxation as a real estate investment trust depends upon the Company's ability
to meet, through actual annual operating results, asset composition,
distribution levels and diversity of stock ownership, the various qualification
tests imposed under the Internal Revenue Code of 1986, as amended, the results
of which have not been and will not be reviewed by Latham & Watkins.
Accordingly, no assurance can be given that the actual results of the Company's
operation for any particular taxable year will satisfy such requirements.
This opinion is rendered only to you and is solely for your benefit
in connection with the Registration Statement. We hereby consent to the filing
of this opinion as an exhibit to the Registration Statement. This opinion may
not be relied upon by you for any other purpose, or furnished to, quoted to or
relied upon by any other person, firm or corporation for any purpose, without
our prior written consent.
Very truly yours,
/s/ LATHAM & WATKINS
-----------------------------
Latham & Watkins
<PAGE> 1
EXHIBIT 12.1
PAN PACIFIC RETAIL PROPERTIES, INC.
STATEMENT OF COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(dollars in thousands)
<TABLE>
<CAPTION>
Years ended December 31,
June 30, ------------------------------------------------------
1998 1997 1996 1995 1994 1993
------- ------- ------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
Income before Extraordinary Items $11,474 $ 9,356 $ 449 $ (615) $(3,216) $ 158
------- ------ ------- ------ ------- -------
Fixed Charges:
Interest (including financing
amortization) 9,068 14,057 14,671 12,262 11,405 10,880
Interest Capitalized 49 229 361 806 568 280
------- ------- ------- ------ ------- -------
Fixed Charges 9,117 14,286 15,032 13,068 11,973 11,160
------- ------- ------- ------ ------- -------
Income before Fixed Charges 20,542 23,413 15,120 11,647 8,189 11,038
Divided by Fixed Charges 9,117 14,286 15,032 13,068 11,973 11,160
------- ------- ------- ------ ------- -------
Ratio of Earnings to Fixed Charges 2.25:1 1.64:1 1.01:1 N/A(1) N/A(1) N/A(1)
======= ======= ======= ====== ======= =======
</TABLE>
- ----------------
(1) Earnings were inadequate to cover fixed charges for the years ended
December 31, 1995, 1994 and 1993. The dollar amount of the coverage
deficiency was $1,421,000, $3,784,000 and $122,000 for the years ended
December 31, 1995, 1994 and 1993, respectively.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Pan Pacific Retail Properties, Inc.
We consent to the use of our reports included in the annual report on Form 10-K
and in the Current Report on Form 8-K filed on October 2, 1998, both
incorporated herein by reference and to the reference to our firm under the
heading "Experts" in the prospectus.
San Diego, California
October 5, 1998
