<PAGE>
As filed with the Securities and Exchange Commission on February 1, 1999
Registration No. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
<TABLE>
<S> <C>
CABOT INDUSTRIAL PROPERTIES, L.P. CABOT INDUSTRIAL TRUST
(Exact name of Registrant as specified (Exact name of Registrant as
in its charter) specified in its charter)
Delaware Maryland
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
04-3397874 04-3397866
(I.R.S. Employer Identification (I.R.S. Employer
Number) Identification Number)
</TABLE>
Two Center Plaza, Suite 200
Boston, Massachusetts 02108
(617) 723-0900
(Address, including zip code, and telephone number, including area code, of
Registrants' principal executive offices)
Robert E. Patterson
President
Cabot Industrial Trust
Two Center Plaza, Suite 200
Boston, Massachusetts 02108
(617) 723-0900
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------
Copy to:
James R. Walther, Esq.
Mayer, Brown & Platt
350 South Grand Avenue
Los Angeles, California 90071-1503
(213) 229-9597
----------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.
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 for the same offering: [_]
--------
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]
--------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
----------------
(continued on next page)
The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
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<PAGE>
(Continued from previous page)
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum Amount of
Title of Each Class of Amount to be Offering Price Aggregate Registration
Securities to be Registered(1) Registered Per Unit Offering Price Fee(3)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares of Beneficial
Interest, per value $.01 per
share(4)....................... (8) (2) (8) --
- ---------------------------------------------------------------------------------------------
Preferred Shares of Beneficial
Interest, par value $.01 per
share(5)....................... (8) (2) (8) --
- ---------------------------------------------------------------------------------------------
Depositary Shares representing
Preferred Shares(6)............ (8) (2) (8) --
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Warrants(7)..................... (8) (2) (8)
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Debt Securities................. (8) (2) (8) --
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Guarantees of Debt Securities... N/A N/A N/A N/A
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Total........................... $1,000,000,000 N/A $1,000,000,000 $278,000
</TABLE>
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(1) The Common Shares, Preferred Shares, Depositary Shares, Warrants and
Guarantees of Debt Securities will be issued by Cabot Industrial Trust (the
"Company"). The Debt Securities will be issued by Cabot Industrial
Properties, L.P. (the "Operating Partnership"). Any securities registered
hereunder may be sold separately or as units with other securities
registered hereunder.
(2) The proposed maximum offering price per unit has been omitted pursuant to
Instruction II.D of Form S-3, and will be determined, from time to time, by
the Registrants in connection with the issuance of the securities
registered hereunder.
(3) Calculated pursuant to Rule 457(o) of the rules and regulations under the
Securities Act of 1933, as amended.
(4) This registration statement registers up to $400,000,000 in aggregate
offering price of Common Shares that may be sold by the Company, together
with such indeterminate number of Common Shares as may be issued upon
conversion of Preferred Shares or exercise of Warrants registered
hereunder. Also includes an indeterminate number of preferred share
purchase rights to be issued in respect of the Common Shares registered
hereunder. No separate consideration will be received for issuance of such
preferred share purchase rights.
(5) This registration statement registers up to $400,000,000 in aggregate
offering price of Preferred Shares that may be sold by the Company,
together with such indeterminate number of Preferred Shares as may be
issued upon exchange of Depositary Shares or exercise of Warrants
registered hereunder.
(6) To be represented by Depositary Receipts that will represent an interest in
all or a specified portion of a Preferred Share.
(7) The Warrants registered hereunder are warrants representing rights to
purchase Preferred Shares or Common Shares (as shall be designated by the
Company at the time of any such offering).
(8) In no event will the aggregate offering price of the Common Shares,
Preferred Shares, Depositary Shares representing Preferred Shares and
Warrants registered hereunder exceed $400,000,000, nor will the aggregate
offering price of Debt Securities registered hereunder exceed $600,000,000.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where such an offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED FEBRUARY 1, 1999
PROSPECTUS
CABOT INDUSTRIAL TRUST
Common Shares, Preferred Shares,
Depositary Shares, Warrants and Guarantees of Debt Securities
CABOT INDUSTRIAL PROPERTIES, L.P.
Debt Securities
Cabot Industrial Trust may offer from time to time, in one or more series and
on terms to be determined at the time of offering, any of the following types
of securities:
. Common Shares of Beneficial Interest, par value $.01 per share
. Preferred Shares of Beneficial Interest, par value $.01 per share
. Depositary Shares representing Preferred Shares
. Warrants to purchase Common Shares or Preferred Shares
The aggregate public offering price of such securities that we may offer will
not exceed $400,000,000 or its equivalent in another currency based on the
exchange rate at the time of sale.
Cabot Industrial Properties, L.P. (the "Operating Partnership") may offer
from time to time one or more series of its unsecured senior Debt Securities on
terms to be determined at the time of offering. The aggregate public offering
price of such Debt Securities will not exceed $600,000,000 or its equivalent in
another currency based on the exchange rate at the time of sale. Cabot
Industrial Trust may unconditionally guarantee the Operating Partnership's
payment obligations on Debt Securities on the terms described herein and in the
applicable prospectus supplement.
In this prospectus, we refer to the Common Shares, Preferred Shares,
Depositary Shares, Warrants and Debt Securities, together with the Guarantees,
as the "Offered Securities." The Offered Securities may be offered separately
or together, in any combination. Each time we offer any of the Offered
Securities, we will provide you with a prospectus supplement that will describe
the specific terms of the securities being offered. Such terms may include
limitations on the right to own, and restrictions on transfer of, the Offered
Securities for the purpose of preserving the status of Cabot Industrial Trust
as a real estate investment trust for federal income tax purposes. The
applicable prospectus supplement will describe the method and terms of the
offering and may also contain information about United States federal income
tax considerations relating to the specific Offered Securities described in the
prospectus supplement. You should read both this prospectus and the applicable
prospectus supplement carefully before you invest in any of the Offered
Securities. This prospectus may not be used to sell any Offered Securities
unless it is accompanied by the applicable prospectus supplement.
Our Common Shares are listed on the New York Stock Exchange under the symbol
"CTR." On January 27, 1999, the last reported sale price of our Common Shares
was $19.4375 per Share.
See "Risk Factors" beginning on page 8 for descriptions of certain factors
relevant to an investment in the Offered Securities.
-----------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities, or determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
-----------
The date of this prospectus is February , 1999
<PAGE>
You should rely only on the information contained in this prospectus or in
the other documents referred to herein under the caption "Where You Can Find
More Information." We have not authorized anyone to provide you with any
different information.
This prospectus is neither an offer to sell nor a solicitation of an offer
to buy the Offered Securities in any jurisdiction in which such offer or sale
would be unlawful. You should not assume that the information contained in this
prospectus is correct on any date after the date of this prospectus stated at
the bottom of the cover page hereof, even though this prospectus is delivered
on a later date.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ABOUT THIS PROSPECTUS..................................................... 5
WHERE YOU CAN FIND MORE INFORMATION....................................... 5
FORWARD-LOOKING STATEMENTS................................................ 6
RISK FACTORS.............................................................. 8
We May Not Be Able to Maintain Shareholder Distributions at Our Current
Level.................................................................. 8
Declaration of Trust and Bylaw Provisions, Staggered Board and
Shareholder Rights Plan May Discourage Changes in Control of the
Company................................................................ 8
We Would Incur Adverse Tax Consequences if the Company Fails to Qualify
as a REIT; Other Tax Risks............................................. 9
We Can Change Our Investment, Financing, Distribution and Other Policies
Without Your Approval; No Limitation on Our Debt....................... 9
Real Estate Investment Risks............................................ 10
Conflicts of Interest................................................... 13
Increases in Market Interest Rates May Adversely Affect the Market Price
of the Common Shares................................................... 14
Shares that Become Available for Future Sale May Adversely Affect the
Market Price of the Common Shares...................................... 14
Real Estate Financing Risks............................................. 14
ERISA Risks............................................................. 14
THE COMPANY AND THE OPERATING PARTNERSHIP................................. 15
USE OF PROCEEDS........................................................... 16
RATIO OF EARNINGS TO FIXED CHARGES........................................ 16
DESCRIPTION OF DEBT SECURITIES............................................ 17
General................................................................. 17
Denominations........................................................... 20
Principal and Interest.................................................. 20
Registration and Transfer............................................... 20
Merger, Consolidation or Sale........................................... 21
Certain Covenants....................................................... 21
Additional Covenants and/or Modifications to the Covenants Described
Above.................................................................. 22
Events of Default, Notice and Waiver.................................... 23
Modification of the Indenture........................................... 25
Discharge, Defeasance and Covenant Defeasance........................... 27
No Conversion Rights.................................................... 29
Book-Entry Securities................................................... 30
No Personal Liability................................................... 31
Trustee................................................................. 32
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
GUARANTEES OF DEBT SECURITIES.............................................. 32
DESCRIPTION OF COMMON SHARES............................................... 32
General.................................................................. 32
Shareholder Rights Plan.................................................. 33
Restrictions on Transfer................................................. 34
Shareholder Liability.................................................... 35
Indemnification of Trustees and Officers................................. 36
Transfer Agent and Registrar............................................. 36
DESCRIPTION OF SECURITYHOLDER PURCHASE RIGHTS.............................. 36
DESCRIPTION OF PREFERRED SHARES............................................ 37
Terms.................................................................... 37
Rank..................................................................... 38
Dividends................................................................ 38
Redemption............................................................... 39
Liquidation Preference................................................... 41
Voting Rights............................................................ 41
Conversion Rights........................................................ 42
Restrictions on Ownership................................................ 42
Registrar and Transfer Agent............................................. 42
DESCRIPTION OF DEPOSITARY SHARES........................................... 43
General.................................................................. 43
Dividends and Other Distributions........................................ 43
Withdrawal of Stock...................................................... 43
Redemption of Depositary Shares.......................................... 44
Voting of the Preferred Shares........................................... 44
Liquidation Preference................................................... 44
Conversion of Preferred Shares........................................... 44
Amendment and Termination of a Deposit Agreement......................... 45
Charges of Preferred Shares Depositary................................... 45
Resignation and Removal of Preferred Shares Depositary................... 45
Miscellaneous............................................................ 46
DESCRIPTION OF WARRANTS.................................................... 46
CERTAIN PROVISIONS OF MARYLAND LAW AND OF THE COMPANY'S DECLARATION
OF TRUST AND BYLAWS....................................................... 47
Board of Trustees........................................................ 47
Business Combinations.................................................... 48
Control Share Acquisitions............................................... 48
Amendment to the Declaration of Trust.................................... 49
Termination of the Company and REIT Status............................... 49
Advance Notice of Trustee Nominations and New Business................... 49
Anti-takeover Effect of Certain Provisions of Maryland Law and of the
Declaration of Trust
and Bylaws.............................................................. 49
OPERATING PARTNERSHIP AGREEMENT............................................ 50
General.................................................................. 50
Management............................................................... 50
Indemnification.......................................................... 51
Capital Contributions.................................................... 51
Tax Matters.............................................................. 51
Operations............................................................... 51
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
Duties and Conflicts...................................................... 51
Term...................................................................... 51
FEDERAL INCOME TAX CONSEQUENCES............................................. 52
Taxation of the Company................................................... 53
REIT Qualification Requirements........................................... 53
Tax Aspects of Our Investments in Partnerships............................ 57
Taxation of Shareholders.................................................. 58
Other Tax Considerations.................................................. 61
PLAN OF DISTRIBUTION........................................................ 61
LEGAL MATTERS............................................................... 62
EXPERTS..................................................................... 63
INFORMATION CONCERNING THE OPERATING PARTNERSHIP............................ 63
</TABLE>
[Following material to be included if Debt Securities are being offered]
<TABLE>
<S> <C>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS OF OPERATING PARTNERSHIP...................................... 64
General................................................................. 64
Results of Operations................................................... 64
Liquidity and Capital Resources......................................... 65
Information Systems and Year 2000 Compliance............................ 66
Seasonality............................................................. 66
INDEX TO FINANCIAL STATEMENTS OF CABOT INDUSTRIAL PROPERTIES, L.P......... F-1
</TABLE>
4
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission (the "SEC") using a "shelf" registration
process. Under this shelf process, Cabot Industrial Trust may sell from time to
time up to $400,000,000 of its Common Shares, Preferred Shares, Depositary
Shares and Warrants, in any combination, and the Operating Partnership may sell
from time to time up to $600,000,000 of its Debt Securities. This prospectus
provides a general description of the securities that we may offer. Each time
we offer any of the types of securities described herein, we will prepare and
distribute a prospectus supplement that will contain a description of the terms
of the securities being offered and of the offering. The prospectus supplement
may also supplement or change the information contained in this prospectus. You
should read both this prospectus and the applicable prospectus supplement
together with the additional information described under the heading "Where You
Can Find More Information" before purchasing any securities.
Unless otherwise indicated or unless the context requires otherwise, all
references in this prospectus to "the Company," "we," "us," "our" or similar
references mean Cabot Industrial Trust and its subsidiaries, including the
Operating Partnership and its subsidiaries.
WHERE YOU CAN FIND MORE INFORMATION
The Company is, and the Operating Partnership will be, subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and files, or will file, annual, quarterly and special reports
with the SEC. The Company also files proxy statements and other information
with the SEC. You may read and copy any document we file at the SEC's public
reference rooms at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the SEC's regional offices at Seven World Trade
Center, 13th Floor, New York, New York 10048, and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. You may telephone the
SEC at 1-800-SEC-0330 for further information on the SEC's public reference
facilities. The SEC also maintains a computer site on the world wide web
(http://www.sec.gov) that contains the reports, proxy and information
statements and other information that we and other registrants file
electronically with the SEC. You can also inspect reports and other information
we file at the offices of the New York Stock Exchange, Inc. ("NYSE"), 20 Broad
Street, New York, New York 10005.
A registration statement on Form S-3 (together with all amendments and
exhibits, the "Registration Statement"), of which this prospectus is a part,
was filed by us with the SEC under the Securities Act of 1933, as amended (the
"Securities Act"). The Registration Statement contains additional information
about us and the Offered Securities. You may read the Registration Statement
and the exhibits thereto without charge at the office of the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549, and you may obtain copies of it from the
SEC at prescribed rates.
The SEC allows us to provide information about our business and other
important information to you by "incorporating by reference" the information we
file with the SEC, which means that we can disclose that information to you by
referring in this prospectus to the documents we file with the SEC. Any
statement contained in a document incorporated by reference in this prospectus
is automatically updated and superseded by any information contained in this
prospectus, or in any subsequent document of the types described below.
5
<PAGE>
We incorporate by reference the following documents filed by us with the
SEC, each of which documents should be considered an important part of this
prospectus:
<TABLE>
<CAPTION>
SEC Filing (File No. 1-13829) Period Covered or Date of Filing
----------------------------- --------------------------------
<C> <S>
Annual Report on Form 10-K, as amended.. Year ended December 31, 1997
Quarterly Reports on Form 10-Q.......... Quarters ended March 31, 1998, June 30,
1998 and September 30, 1998
Current Reports on Form 8-K............. Filed on June 15, 1998, September 16,
1998 and January 29, 1999
Description of Common Shares contained
in Registration Statement on Form 8-A,
as amended............................. Filed on January 27, 1998
Financial statements included in our
Registration Statement on Form S-11
(Registration No. 333-61543)........... Filed on August 14, 1998
All subsequent documents filed by us
with the SEC pursuant to Sections
13(a), 13(c), 14 or 15(d) of the
Exchange Act of 1934................... After the date of this prospectus and
prior to the termination of the
offering.
</TABLE>
All filings made by the Operating Partnership with the SEC after the date
hereof pursuant to Section 15(d) of the Exchange Act are also incorporated
herein by reference.
To receive a free copy of any of the documents incorporated by reference in
this prospectus (other than exhibits to such documents, unless the exhibits are
specifically incorporated by reference in the documents), telephone or write
Cabot Industrial Trust, Two Center Plaza, Suite 200, Boston, MA, 02108,
Attention: Secretary; telephone: 617/723-0900.
FORWARD-LOOKING STATEMENTS
Some of the information included or incorporated by reference in this
prospectus contains forward-looking statements, such as those pertaining to our
capital resources, portfolio performance and future results of operations,
market conditions and prospects. The pro forma financial statements and other
pro forma information incorporated by reference in this prospectus also contain
forward-looking statements. You can identify forward-looking statements by
their use of forward-looking terminology such as "believes," "expects," "may,"
"will," "should," "seeks," "approximately," "intends," "plans," "pro forma,"
"estimates" or "anticipates" or the negative of these words and phrases or
similar words or phrases. Discussions of strategy, plans or intentions also
include forward-looking statements.
Forward-looking statements inherently involve risks and uncertainties and
you should not rely on them as predictions of future events. The following
factors, among others, could cause future events and actual results to differ
materially from those set forth or contemplated in the forward-looking
statements:
. defaults on or non-renewal of leases by tenants
. increased interest rates and operating costs
. our failure to obtain necessary outside financing
. difficulties in identifying properties to acquire and in effecting
acquisitions
6
<PAGE>
. failure successfully to integrate acquired properties and operations
. risks and uncertainties affecting property development and construction,
including construction delays, cost overruns, inability to obtain necessary
permits and public opposition to such activities
. failure to qualify and maintain our status as a REIT under the Internal
Revenue Code of 1986, as amended (the "Tax Code")
. environmental uncertainties and risks related to natural disasters
. financial market fluctuations
. changes in real estate and zoning laws
. increases in real property tax rates
Our success also depends upon economic trends generally, including interest
rates, income tax laws, governmental regulations, legislation and population
changes and the additional matters discussed in this prospectus, including
those described under the caption "Risk Factors." We caution you not to place
undue reliance on forward-looking statements, which reflect our analysis only.
7
<PAGE>
RISK FACTORS
Investing in the Offered Securities involves various risks. You should
carefully consider the following types of risks that we and our investors face
and should read this entire prospectus before purchasing any of the Offered
Securities.
We May Not Be Able to Maintain Shareholder Distributions at Our Current Level
We base the level of our cash distributions to shareholders on numerous
assumptions and projections that we make regarding our future performance and
our own decisions to reinvest rather than distribute available cash. Our
assumptions and projections relate, among other things, to: property occupancy
and the profitability of tenants, the amount of future capital expenditures and
expenses relating to our properties, the level of leasing activity and future
rental rates at our properties, the strength of the industrial real estate
market in the areas in which we own properties, competition and the costs of
compliance with environmental and other laws. While we expect to maintain or
increase our current level of distributions over time, we cannot guarantee that
we will be able to do so.
Declaration of Trust and Bylaw Provisions, Staggered Board and Shareholder
Rights Plan May Discourage Changes in Control of the Company
Our Declaration of Trust and Bylaws contain several provisions that may
delay, defer or prevent a transaction or a change in control that might involve
a price for the Common Shares or other attributes that shareholders may
consider desirable. See "Description of Common Shares."
Ownership Limitation. In order to remain qualified as a REIT under the Tax
Code, five or fewer persons (defined in the Tax Code to include certain
entities) cannot own (or be deemed to own) more than 50% in value of our
outstanding shares at any time during the last half of any taxable year, other
than our first taxable year. To preserve our qualification as a REIT, our
Declaration of Trust provides that no person may own more than 9.8% in number
of our issued and outstanding shares of beneficial interest or more than 9.8%
of the total equity value of such shares of beneficial interest. Our Board of
Trustees has the power to exempt a proposed transferee from this ownership
limit based on an Internal Revenue Service ruling, an opinion of counsel or
other satisfactory evidence that the proposed ownership of Common Shares by the
transferee would not result in the termination of our REIT status. If the
proposed transfer would violate these limits, the transfer may be void. These
ownership restrictions may delay, defer or prevent a transaction or a change in
control which could involve an offer for your shares above the then prevailing
market price or that you may for other reasons consider to be in your best
interest.
Staggered Elections of Trustees. Our Board of Trustees is divided into three
classes with staggered terms of three years each. One class is elected each
year. These staggered terms may reduce the possibility of an attempt to acquire
control of the Company.
Shareholder Rights Plan, Possibility of Additional Share Issuances, Other
Matters. We have adopted a Shareholder Rights Plan that could delay, defer or
prevent a transaction or a change in control of the Company. See "Description
of Common Shares--Shareholder Rights Plan." In addition, our Board of Trustees
can, without shareholder approval, increase or decrease the aggregate number of
shares of beneficial interest of any class that we have authority to issue,
issue additional shares of beneficial interest, classify or reclassify any
unissued Common Shares and Preferred Shares and set the rights, preferences and
other terms of those shares. We expect to acquire additional properties in
exchange for units of limited partnership interest in the Operating Partnership
("Units") on a continuing basis, which Units will be exchangeable for our
Common Shares (subject to our right to purchase the Units for cash instead of
issuing our Common Shares). Under the Maryland law governing our operations,
you will have no preemptive right to acquire any such equity securities. If we
issue additional equity securities, your investment may be diluted.
8
<PAGE>
We Would Incur Adverse Tax Consequences if the Company Fails to Qualify as a
REIT; Other Tax Risks
Adverse Consequences of Failure to Qualify as a REIT; Limited Management
Experience in Maintaining REIT Qualification. We intend to operate so as to
qualify as a REIT for federal income tax purposes, but we do not intend to
request a ruling from the Internal Revenue Service that we do in fact qualify
as a REIT. In our legal counsel's opinion, we are organized in conformity with
the requirements for qualification as a REIT (as of the taxable year ended
December 31, 1998) and our actual and proposed method of operation (each as we
have described them to our counsel) satisfies the requirements for REIT
qualification. Our counsel's opinion, however, is not binding on the Internal
Revenue Service and is based on our representations as to factual matters and
on our counsel's review and analysis of existing law, which includes no
controlling precedent.
Our continued qualification as a REIT depends on our ability to meet various
requirements concerning, among other things, the ownership of our outstanding
shares, the nature of our assets, the sources of our income and the amounts we
distribute to shareholders. Our management has limited experience in operating
in compliance with these requirements.
If we were to fail to qualify as a REIT for any taxable year, we would not
be permitted to deduct the amount we distribute to shareholders from our
taxable income and we would have to pay federal income tax (including any
alternative minimum tax) at regular corporate rates. Unless entitled to relief
under certain Tax Code provisions, we also would be disqualified from treatment
as a REIT for the four taxable years following the year during which our REIT
qualification was lost. As a result, cash available for distribution would be
reduced for each of the years involved. Our Board of Trustees is authorized to
revoke our REIT election at any time in response to future economic, market,
legal, tax or other considerations.
Other Tax Liabilities. Even if we qualify as a REIT, we are required to pay
state and local taxes on our income and property and may also have to pay
certain federal taxes. In addition, the net taxable income, if any, from
activities conducted through the Management Company referred to herein (see
"The Company and the Operating Partnership") will be subject to federal and
state income tax.
Borrowings May Be Required to Meet REIT Minimum Distribution
Requirements. In order to qualify as a REIT, we are generally required to
distribute at least 95% of our net taxable income (excluding any net capital
gain) to our shareholders. If we fail to meet this requirement we will have to
pay a 4% nondeductible excise tax on the amount, if any, by which certain
distributions we make are less than the sum of (1) 85% of our ordinary income
for that year, (2) 95% of our capital gain net income for that year and
(3) 100% of our undistributed taxable income from prior years. We intend to
comply with the 95% of net taxable income distribution requirement.
We derive our income primarily from our share of the Operating Partnership's
income and the cash available for distribution to our shareholders comes
primarily from cash distributions from the Operating Partnership. We may have
to borrow funds on a short-term (or possibly on a long-term) basis to meet the
95% of net taxable income distribution requirement and thereby avoid being
required to pay the nondeductible excise tax referred to above. This is due to
differences in timing between when we actually receive income and pay
deductible expenses, and when the income and expenses are included in our
taxable income.
We Can Change Our Investment, Financing, Distribution and Other Policies
Without Your Approval; No Limitation on Our Debt.
Our Board of Trustees determines our investment, financing and distribution
policies, and our policies with respect to all other activities, including
growth, capitalization and operations. The Board may amend or revise these
policies without your consent. A change in these policies could adversely
affect our financial condition or results of operations or the market price of
our Common Shares. Among others, it is our Board's current policy to limit our
Debt-to-Total Market Capitalization Ratio to 40%, but our organizational
documents do not limit the amount of indebtedness that we may incur without
shareholder approval. (Our "Debt-to-Total Market Capitalization Ratio" is the
ratio of our total consolidated and unconsolidated debt as a percentage of the
sum
9
<PAGE>
of the market value of all of our outstanding Common Shares and all outstanding
Units of the Operating Partnership that we do not own plus total consolidated
and unconsolidated debt, but excluding all nonrecourse consolidated debt in
excess of our proportionate share of such debt and all nonrecourse
unconsolidated debt of partnerships of which the Company is a limited partner.)
Real Estate Investment Risks
General Risks. Real property investments involve various risks. The yields
available from equity investments in real estate depend in large part on the
amount of rental income earned and capital appreciation generated, as well as
operating and other expenses. If our properties do not generate revenues
sufficient to meet our operating expenses, including debt service, tenant
improvement costs, leasing commissions and other capital expenditures, we may
have to borrow additional amounts to cover our fixed costs, and our cash flow
and ability to make distributions to shareholders may be adversely affected.
A number of factors may adversely affect our revenues and the value of our
properties over time, including: (1) the national, state and local economic
climate and real estate conditions (such as oversupply of or reduced demand for
space and changes in market rental rates), (2) the perceptions of prospective
tenants of the attractiveness, convenience and safety of our properties, (3)
our ability to provide adequate management, maintenance and insurance, (4) our
ability to collect rent from tenants on a timely basis, (5) the expense of
periodically renovating, repairing and reletting spaces in our properties, (6)
increasing operating costs (including real estate taxes and utilities) to the
extent that such increased costs cannot be passed through to tenants, (7)
compliance with environmental and tax laws, (8) interest rate levels and (9)
the availability of financing.
Tenant Defaults and Bankruptcy. We derive the majority of our income from
rental payments. If a significant number of tenants fail to meet their lease
obligations, our cash flow will decrease and we may be unable to make expected
distributions to our shareholders.
Defaulting tenants may seek bankruptcy protection, which could result in
payment delays or the rejection and termination of the tenants' leases. This
would reduce our cash flow and the amounts available to distribute to
shareholders. In addition, a tenant may suffer business losses which may weaken
its financial condition and result in the failure to make rental payments when
due. If tenant leases are not affirmed following bankruptcy or if a tenant's
financial condition weakens, our cash flow and the amounts available to us for
distribution to our shareholders may decrease.
Operating Risks. Our properties are subject to operating risks common to
commercial real estate in general, any and all of which may adversely affect
occupancy and rental rates. Commercial properties are subject to increases in
operating expenses such as cleaning, electricity, heating, ventilation and air
conditioning and maintenance, insurance and administrative costs, and other
general costs associated with security, landscaping, repairs and maintenance.
While our current tenants are generally obligated to pay a portion of
increases in operating costs, there is no assurance that our existing tenants
will agree to pay all or any portion of such costs upon renewal of their leases
or that new tenants will agree to pay such costs. If operating expenses
increase, competition in the local rental market may limit the extent to which
rents may be increased to meet increased expenses without decreasing occupancy
rates.
Risks of Non-Renewal of Leases and Vacancies. When leases of space in our
properties expire, the leases may not be renewed, the related space may not be
relet promptly or the terms of renewal or reletting (including the cost of
required renovations) may be less favorable than the terms of the expiring
leases.
In formulating our annual business plans, we make estimates of renovation
and reletting costs that take into consideration our views of both current and
expected future business conditions in our markets. We cannot guarantee that
our estimates will prove to be accurate. If we are unable promptly to relet or
renew the leases
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for all or a substantial portion of our space, if the rental rates upon such
renewal or reletting are significantly lower than expected rates or if our
estimates for these purposes prove inadequate, then our cash flow and ability
to make expected distributions to shareholders may be adversely affected.
We May Not Be Able to Meet Our Targeted Levels of Leasing Activity,
Acquisitions and Development Due to the Highly Competitive Nature of the
Industrial Property Markets. Numerous industrial properties compete with our
properties in attracting tenants to lease space and additional properties can
be expected to be built in the markets in which our properties are located. The
number and quality of competitive industrial properties in a particular area
will have a material effect on our ability to lease space at the properties or
at newly acquired properties and on the rents charged. Some of these competing
properties may be newer or better located than our properties.
The industrial real estate investment market is also highly competitive.
There are a significant number of buyers of industrial property, including
other publicly traded industrial REITs, many of which have significant
financial resources. This has resulted in increased competition in acquiring
attractive industrial properties. Accordingly, we may not be able to meet our
targeted level of property acquisitions and developments due to such
competition or other factors which may have an adverse effect on our expected
growth in funds from operations.
Possible Environmental Liabilities. Under various federal, state and local
environmental laws, ordinances and regulations, a current or previous owner or
operator of real property may be liable for the costs of removal or remediation
of hazardous or toxic substances on, under or in such property. Such laws often
impose liability whether or not the owner or operator knew of, or was
responsible for, the presence of such hazardous or toxic substances.
In addition, the presence of hazardous or toxic substances, or the failure
to remediate such property properly, may adversely affect the owner's ability
to borrow using such real property as collateral. Persons who arrange for the
disposal or treatment of hazardous or toxic substances may also be liable for
the costs of removal or remediation of hazardous substances at the disposal or
treatment facility, whether or not such facility is or ever was owned or
operated by such person.
Certain environmental laws and common law principles could be used to impose
liability for release of and exposure to hazardous substances, including
asbestos-containing materials ("ACMs"), into the air, and third parties may
seek recovery from owners or operators of real properties for personal injury
or property damage associated with exposure to released hazardous substances,
including ACMs. As the owner of real properties, we may be potentially liable
for any such costs.
Phase I environmental site assessment reports ("Phase I ESAs") were obtained
by our original contributing investors in connection with their initial
acquisition of the properties, or were obtained by us in connection with the
transactions resulting in our formation as a publicly traded company. In
accordance with our acquisition policies, we have also obtained Phase I ESAs
for all of the properties that we have acquired since the date of our
formation. The purpose of Phase I ESAs is to identify potential sources of
contamination for which we may be responsible and to assess the status of
environmental regulatory compliance. The earliest of the Phase I ESAs for our
properties were obtained in 1988 and Phase I ESAs on approximately 19% of the
properties were obtained prior to 1995. Commonly accepted standards and
practices for Phase I ESAs have evolved to encompass higher standards and more
extensive procedures over the period from 1988 to the present.
The Phase I ESAs obtained for our properties have not revealed any
environmental liability that we believe would have a material adverse effect on
our business, assets or results of operations, nor are we aware of any such
material environmental liability. It is possible, however, that the Phase I
ESAs relating to the properties do not reveal all environmental liabilities.
Moreover, future laws, ordinances or regulations may impose material
environmental liability or our properties' current environmental condition may
be affected by tenants, by the condition of land or operations in the vicinity
of the properties (such as the presence of underground storage tanks) or by
third parties unrelated to us.
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We May Be Adversely Affected by Changes in Laws. Because increases in income
or service taxes generally are not passed through to tenants under our leases,
such increases may adversely affect our cash flow and our ability to make
distributions to our shareholders.
Our properties are also subject to various federal, state and local
regulatory requirements and to state and local fire and life-safety
requirements. Failure to comply with these requirements could result in the
imposition of fines by governmental authorities or awards of damages to private
litigants. We believe that our properties are in material compliance with all
such regulatory requirements. However, new requirements may be imposed that
would require us to make significant unanticipated expenditures and could have
an adverse effect on our cash flow and ability to make expected distributions
to shareholders.
We Could Be Adversely Affected If Hazard Losses on Our Properties Exceed the
Amount of Our Insurance Coverage or Are Not Covered by Insurance. We carry
commercial general liability insurance, standard "all-risk" property insurance,
and flood and earthquake (where appropriate) and rental loss insurance with
respect to our properties with policy terms and conditions customarily carried
for similar properties. However, our insurance is subject to normal limitations
on the amounts of coverage and certain types of losses (such as from wars or
from earthquakes for properties located in California) may be either
uninsurable or not economically insurable. Should an uninsured loss or a loss
in excess of the amount of our insurance coverage occur, we could lose the
capital invested in a property, as well as the anticipated future revenue from
that property, and we would continue to be obligated on any mortgage
indebtedness or other obligations related to the property.
In light of the California earthquake risk, California building codes have
since the early 1970's established construction standards for all new buildings
and also contain guidelines for seismic upgrading of existing buildings that
are intended to reduce the possibility and severity of loss from earthquakes.
The construction standards and upgrading, however, do not eliminate the
possibility of earthquake loss. It is our current policy to obtain earthquake
insurance if available at acceptable cost. As of December 31, 1998, all of our
50 properties located in California are covered by earthquake insurance. At
December 31, 1998, seismic upgrading has been completed on 11 of the California
properties and seismic upgrading is expected to be completed on ten additional
California properties within nine months from the date of this prospectus. We
currently maintain blanket earthquake insurance coverage for all properties
located outside California in amounts we believe to be reasonable.
Possible Adverse Effects of Illiquidity of Real Estate Investments. Equity
real estate investments are relatively illiquid. Such illiquidity will tend to
limit our ability to vary our portfolio promptly in response to changes in
economic or other conditions. In addition, the Tax Code limits a REIT's ability
to sell properties held for fewer than four years, which may affect our ability
to sell properties without adversely affecting returns to common shareholders.
Possible Adverse Effects of Acquisition, Development and Construction
Activities. We intend to acquire existing industrial properties to the extent
that they can be acquired on advantageous terms and meet our investment
criteria. These acquisitions will entail general investment risks associated
with any real estate investment, including the risk that investments will fail
to perform as expected, the risk of unexpected liabilities and the risk that
necessary property improvement costs may be greater than we estimated in
deciding to acquire a property.
We also intend to grow through the selective development and construction of
industrial properties, including build-to-suit properties and speculative
development, as suitable opportunities arise. The risks associated with such
real estate development and construction activities include: (1) the risk that
we may find it necessary to abandon development project activities after
expending significant resources to determine their feasibility, (2) the
construction cost of a project may exceed original estimates, (3) occupancy
rates and rents at a newly completed property may not be sufficient to make the
property profitable, (4) financing may not be available on favorable terms for
development of a property, and (5) the construction and lease up of a property
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may not be completed on schedule (resulting in increased debt service and
construction costs). Development activities are also subject to the risk of
failing to obtain, or delays in obtaining, necessary zoning, land-use, building
occupancy and other required governmental permits and authorizations. In
addition, new development activities may require a substantial portion of
management's time and attention.
Conflicts of Interest
Limitations on the Company's Remedies for Breaches of Representations and
Warranties. The investors who contributed properties or other assets to us in
the transactions resulting in our formation as a publicly traded REIT (the
"Formation Transactions"), including our senior executive officers, each made
certain representations and warranties in the Contribution Agreement entered
into among such investors in connection with the Formation Transactions. Such
representations and warranties, related, among other things, to their authority
to enter into the Formation Transactions, their ownership of the properties or
other assets contributed by them, the absence of certain liabilities and other
matters relating to the properties and such assets. The liability of the
contributing investors in the event of breach of any of such representations
and warranties or breach of other provisions of the Contribution Agreement was,
with certain limited exceptions, limited to claims for indemnification made
within one year after the February 4, 1998 consummation of the Formation
Transactions. In addition, such indemnification obligations are subject to an
overall limitation under the Contribution Agreement equal to the value of the
Units or Common Shares received in the Formation Transactions ($20 per Unit or
Common Share) and are subject to the further limitation that any such
indemnification obligation relating to a specific property is limited to the
contribution value assigned to such property by the parties in the Contribution
Agreement. The obligation to make any such indemnification payments may be
satisfied by making cash payments or by delivering Common Shares or Units,
valued at the then market price for Common Shares, to the Company.
Possible Differing Objectives Between Certain Officers and the Company
Relating to Sales of Properties. As holders of Units, certain of our senior
executive officers, including Ferdinand Colloredo-Mansfeld, who is the
Company's Chairman of the Board of Trustees and Chief Executive Officer have
unrealized taxable gains associated with their interests in the properties and
assets they contributed to the Operating Partnership in the Formation
Transactions. Because such officers may incur different and more adverse tax
consequences than other investors upon the sale of those properties and assets,
they may have different views regarding the appropriate pricing and timing of
any sale of such properties. While the full Board of Trustees has the ultimate
authority to determine whether and on what terms to sell our properties, such
officers could have an incentive to discourage sale of such properties even
though such sales might be financially advantageous for the Company and its
other shareholders.
Influence of Significant Shareholders, Trustees and Executive Officers. Our
senior management beneficially owns approximately 3.8% of the outstanding
Common Shares (assuming the exchange of all Units not held by the Company for
Common Shares). The IBM Retirement Plan Trust, the New York State Teachers'
Retirement System and the Pennsylvania Public School Employes' Retirement
System beneficially own approximately 23.6%, 13.7% and 12.7%, respectively, of
the outstanding Common Shares (assuming the exchange of all Units not held by
the Company for Common Shares). These investors could have a significant
influence on our operations and the outcome of matters submitted to a
shareholder vote and could, were they to agree to act in concert with each
other, exercise effective control over our affairs. Management is not aware of
any such agreements among these or any other investors.
Conflicts Relating to the Operating Partnership. As the general partner of
the Operating Partnership, Cabot Industrial Trust owes fiduciary duties to the
Operating Partnership's limited partners. Discharging these fiduciary duties
could conflict with its shareholders' interests. Pursuant to the Operating
Partnership's limited partnership agreement, however, the limited partners have
acknowledged that Cabot Industrial Trust is acting both on behalf of its
shareholders and, in its capacity as general partner of the Operating
Partnership, on behalf
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of the limited partners. The limited partners have further agreed in the
partnership agreement that we are under no obligation to consider the separate
interests of the limited partners in deciding whether to cause the Operating
Partnership to take (or to decline to take) any actions.
Increases in Market Interest Rates May Adversely Affect the Market Price of the
Common Shares
One of the factors that influence the market price of our Common Shares is
the annual rate of distributions that we pay on the Common Shares, as compared
with market interest rates. An increase in market interest rates may lead
purchasers of REIT shares to demand higher annual distribution rates, which
could adversely affect the market price of the Common Shares unless we are able
to increase our distributions on outstanding Common Shares and elect to do so.
Shares that Become Available for Future Sale May Adversely Affect the Market
Price of the Common Shares
Substantial sales of Common Shares, or the perception that such sales may
occur, could adversely affect the prevailing market prices of the Common
Shares. At December 31, 1998, we had 18,586,764 outstanding Common Shares.
8,961,764 of the Common Shares outstanding of that date and 24,853,920
additional Common Shares issuable on conversion of outstanding Units in the
Operating Partnership are not transferable (with limited exceptions) until
February 4, 1999 and will remain subject to more limited contractual
restrictions on transfer until February 4, 2000. A total of 2,154,036
additional Common Shares issuable on conversion of outstanding Units in the
Operating Partnership will not be transferable (with certain exceptions for
transfers to related parties, donative transfers and bona fide pledges of
shares) until February 4, 2000. In addition, we have reserved a total of
4,347,500 Common Shares for issuance pursuant to options to be granted to
employees, officers and Trustees under our Long Term Incentive Plan, of which
3,143,815 shares are subject to options that have been granted to date, subject
to four-year vesting schedules. We are not able to assess the extent to which
perceptions of possible future sales of any of the above described Common
Shares have affected the prevailing market prices of the Common Shares to date
or may do so from time to time in the future.
Real Estate Financing Risks
Debt Financing and Potential Adverse Effects on Cash Flows and
Distributions. As a result, among other things, of the annual income
distribution requirements applicable to REITs under the Tax Code, we rely to a
significant extent on borrowings to fund acquisitions, capital expenditures and
other items and expect to continue to do so. We are therefore subject to real
estate and general financing risks, including changes from period to period in
the availability of such financing, the risk that our cash flow may not cover
both required debt service payments and distributions to our shareholders, and
the risk that we will not be able to refinance indebtedness secured by
properties or that the refinancing terms will be unfavorable. If we do not make
mortgage payments, the property or properties subject to such mortgage
indebtedness could be foreclosed upon by or transferred to the lender.
Rising Interest Rates. We have a variable interest rate bank credit facility
that permits us to borrow up to $325 million for property acquisitions and
other purposes that provides for interest at variable rates, and we may incur
additional variable rate indebtedness in the future. Variable-rate debt creates
higher debt service requirements if market interest rates increase, which would
adversely affect our cash flow and the amounts available to distribute to our
shareholders. While we have entered into hedging arrangements that are intended
to reduce our exposure to rising interest rates and may enter into additional
arrangements for that purpose in the future, changes in interest rates will
still affect our business and results of operations.
ERISA Risks
The Employee Retirement Income Security Act of 1974 ("ERISA") and Section
4975 of the Tax Code prohibit certain transactions that involve an employee
retirement plan that is subject to ERISA and a "party in
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interest" or "disqualified person" with respect to the plan (collectively
referred to herein as a "party in interest") unless there is an applicable
exemption to such prohibition. Cabot Partners (our sponsor and organizer) was a
party in interest with respect to one ERISA plan that was a contributing
investor in the Formation Transactions. It is not clear that the Formation
Transactions would have constituted a prohibited transaction with respect to
that plan. Nevertheless, the plan informed Cabot Partners that it relied on
Prohibited Transaction Exemption 84-14 ("PTE 84-14") and retained a qualified
professional asset manager ("QPAM") to decide whether or not to enter into the
Formation Transactions. The applicability of such exemption in certain
circumstances has been questioned by the Department of Labor. If it were
ultimately determined that the Formation Transactions constituted a prohibited
transaction with respect to the plan, and also that PTE 84-14 did not apply to
the plan's participation in the Formation Transactions, then sanctions could be
imposed on Cabot Partners and the fiduciaries of the plan that could include
reallocation of Units between Cabot Partners and the plan or other remedies,
possibly including rescission of the property transfers from the plan, for the
purpose of putting the plan in a financial position not worse than that in
which it would have been if the parties had acted in accordance with the
requirements of ERISA. Cabot Partners and the Company received an opinion from
Mayer, Brown & Platt in connection with the Formation Transactions that PTE 84-
14 applied to the Formation Transactions with respect to the plan, but, that
opinion is not binding on the Department of Labor, the Service or any court.
THE COMPANY AND THE OPERATING PARTNERSHIP
The Company is a self-administered and self-managed real estate company
formed to continue and expand the national industrial real estate business of
Cabot Partners Limited Partnership ("Cabot Partners"). We commenced operations
in our current form upon the completion of our initial public offering on
February 4, 1998. At December 31, 1998, we had a portfolio of 206 industrial
buildings located in 21 states throughout the United States and containing
approximately 28.0 million rentable square feet. These properties were
approximately 97% leased to 414 tenants at that date, with no single tenant
accounting for more than 4.0% of our total annualized base rent.
We own and operate a diversified portfolio of bulk distribution, multitenant
distribution and "workspace" (light assembly and flex/R&D) properties and have
a significant presence in targeted markets across the United States. We believe
that our geographic and property diversification and substantial presence in
multiple markets is a strategic advantage that allows us to serve industrial
space users with multiple site and property type requirements, compete more
effectively in our chosen markets and respond quickly to acquisition
opportunities across the country.
Our senior management has an average of approximately 19 years of experience
in the real estate industry and have worked together since 1987 as the
executive officers of Cabot Partners and, previously, Cabot, Cabot & Forbes
Realty Advisors, Inc. ("Cabot Advisors"). Cabot Advisors was an affiliate of
Cabot, Cabot & Forbes Company, a nationwide real estate development,
investment, construction and management firm that pioneered the development of
large-scale planned industrial parks.
Substantially all of our assets, including our interest in our properties,
are held by, and our operations are conducted through, the Operating
Partnership. The Company is the sole general partner, and thereby controls the
operations, of the Operating Partnership and held an approximate 42.7%
ownership interest therein as of December 31, 1998. The Operating Partnership
enjoys substantially all of the economic benefit of the real estate investment
management businesses carried on by Cabot Advisors, Inc. (the "Management
Company") by virtue of its ownership of all of the Management Company's
preferred stock. The Company was formed as a Maryland real estate investment
trust, and the Operating Partnership was organized as a limited partnership
under Delaware law, on October 10, 1997. Our executive offices are located at
Two Center Plaza, Suite 200, Boston, Massachusetts 02108 and our telephone
number is (617) 723-0900.
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USE OF PROCEEDS
Unless we indicate otherwise in the applicable prospectus supplement, we
intend to use the net proceeds from the sale of Offered Securities for the
acquisition and development of industrial properties as suitable opportunities
arise, improvement of the properties owned by us, repayment of our outstanding
indebtedness and for general purposes. Pending such use, we may invest such net
proceeds in short-term, interest bearing securities.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for the Company for the nine month
period ended September 30, 1998 was 10.4x. The Company did not have any
outstanding preference securities during the period.
The ratios of earnings to fixed charges of the "Existing Investors Property
Group" (those properties that were managed by Cabot Partners as of February 3,
1998 for investors who contributed properties to the Company in the Formation
Transactions and contributed to the Company on February 4, 1998) were as
follows for the years ended December 31. The Existing Investors Property Group
had no outstanding preference securities during any of the years shown.
<TABLE>
<S> <C> <C> <C> <C>
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
9.7x 8.9x 6.7x 6.9x 5.1x
</TABLE>
The ratio of earnings to fixed charges for the Operating Partnership for the
nine month period ended September 30, 1998 was 10.4x. The Operating Partnership
did not have any outstanding preference securities during the period.
The ratios of earnings to fixed charges are computed by dividing income from
continuing operations including income from minority interests plus fixed
charges, excluding capitalized interest, by fixed charges. Fixed charges
consist of interest costs, whether expensed or capitalized, the interest
component of rental expense and amortization of debt premiums and discounts.
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DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which this prospectus and any applicable prospectus
supplement may relate. The Debt Securities will be issued by the Operating
Partnership and may be accompanied by Guarantees issued by Company. The Debt
Securities will be issued under one or more indentures (each an "Indenture")
among the Operating Partnership, the Company and a trustee (the "Trustee"),
with each Indenture to be dated as of a date prior to the issuance of the Debt
Securities to which it relates. A form of the Indenture has been filed as an
exhibit to the Registration Statement of which this prospectus is a part, is
incorporated herein by reference and is available as described above under
"Where You Can Find More Information." The Indenture is subject to, and
governed by, the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"). The statements made hereunder relating to the Indenture and the Debt
Securities to be issued thereunder are summaries of certain provisions thereof
and are not complete. For more detail you should refer to the provisions of the
Indenture and such Debt Securities. All section references appearing herein are
to sections of the Indenture, and capitalized terms used but not defined herein
shall have the respective meanings set forth in the Indenture.
General
The Debt Securities will be direct, unsecured and unsubordinated obligations
of the Operating Partnership and will rank equally with all other unsecured and
unsubordinated indebtedness, but will be subordinate to secured indebtedness,
of the Operating Partnership. The Indenture provides that 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 in or pursuant to
authority granted by a resolution of the Company's Board of Trustees (the
"Board" or "Board of Trustees"), as general partner of the Operating
Partnership, or as established in one or more indentures supplemental to the
Indenture.
The prospectus supplement relating to any series of Debt Securities offered
by the Operating Partnership will describe the specific terms thereof and of
the Guarantees, if any, endorsed on such Debt Securities, including, where
applicable:
(1) the title of such Debt Securities;
(2) any limit on the aggregate principal amount of such Debt Securities;
(3) the date or dates, or the method for determining such date or
dates, on which the principal of such Debt Securities will be
payable and the amount of principal payable thereon;
(4) the rate or rates, or the method by which such rate or rates shall
be determined, at which such Debt Securities will bear interest,
if any, and the date or dates, or the method for determining such
date or dates, from which any such interest will accrue, the
Interest Payment Dates on which any such interest will be payable,
the Regular Record Dates, if any, for such Interest Payment Dates,
or the method by which such dates shall be determined, and the
basis on which interest shall be calculated if other than a 360-
day year comprised of twelve 30-day months;
(5) the place or places where the principal of (and premium or Make-
Whole Amount (as defined below), if any, on) and interest and
Additional Amounts (as defined below), if any, on such Debt
Securities will be payable, where such Debt Securities may be
surrendered for registration of transfer or exchange and where
notices or demands to or upon the Operating Partnership or the
Company, as applicable, in respect of such Debt Securities, any
related Guarantees and the Indenture may be served;
(6) the period or periods within which, the price or prices (including
the premium or Make-Whole Amount, if any) at which, the currency
or currencies, currency unit or units or composite currency or
currencies in which, and the other terms and conditions upon which
such Debt Securities may be redeemed, in whole or in part, at the
option of the Operating Partnership, if the Operating Partnership
is to have such an option;
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(7) the obligation, if any, of the Operating Partnership to redeem,
repay or purchase such Debt Securities pursuant to any sinking
fund or analogous provision or at the option of a holder thereof
("Holder"), and the period or periods within which, 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 the other terms and conditions upon which
such Debt Securities shall be redeemed, repaid or purchased, in
whole or in part, pursuant to such obligation;
(8) if other than denomination of $1,000 and any integral multiple
thereof, the denomination in which such Debt Securities will be
issuable;
(9) if other than the Trustee, the identity of the Security Registrar
(as defined) and Paying Agent (as defined);
(10) the percentage of the principal amount at which such Debt
Securities will be issued and, if other than the principal amount
thereof, the portion of the principal amount thereof payable upon
declaration of acceleration of the maturity thereof;
(11) if other than U.S. dollars, the currency or currencies in which
the principal of (and premium or Make-Whole Amount, if any, on) or
interest or Additional Amounts, if any, on such Debt Securities
are denominated and payable;
(12) whether the amount of payments of the principal of (and premium or
Make-Whole Amount, if any, on) or interest or Additional Amounts,
if any, on such Debt Securities 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 currency or currencies,
commodities, equity indices or other indices) and the manner in
which such amounts shall be determined;
(13) whether the principal of (and premium or Make-Whole Amount, if
any, on) or interest or Additional Amounts, if any, on such Debt
Securities are to be payable, at the election of the Operating
Partnership or a Holder, in a currency or currencies, currency
unit or units or composite currency or currencies, other than that
in which such Debt 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 in which such Debt 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 Debt Securities are to be so payable;
(14) provisions, if any, granting special rights to the Holders of such
Debt Securities upon the occurrence of such events as may be
specified;
(15) any deletions from, modifications of or additions to the terms of
such Debt Securities as compared with the Events of Default or
covenants set forth in the Indenture;
(16) whether such Debt Securities are to be issuable in permanent
global form and, if so, whether beneficial owners of interests in
any such permanent global Debt Security may exchange such
interests for Debt Securities of such series and of like tenor of
any authorized form and denomination and the circumstances under
which any such exchanges may occur, and the identity of the
depository for such series;
(17) the Person to whom any interest on any Debt Security is payable,
if other than the Person in whose name such Debt Security is
registered at the close of business on the Regular Record Date for
such interest;
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(18) the applicability, if any, of the defeasance and covenant
defeasance provisions of Article Fourteen of the Indenture to such
Debt Securities and any provisions in modification thereof, in
addition thereto or in lieu thereof;
(19) if such Debt Securities are to be issuable in definitive form only
upon receipt of certificates, documents or conditions, the form
and terms of such certificates, documents or conditions;
(20) whether such Debt Securities are to be accompanied by a Guarantee
(the "Guaranteed Securities") and, if so, the terms of the
Guarantees endorsed thereon;
(21) whether and under what circumstances the Operating Partnership
will pay Additional Amounts as contemplated in the Indenture on
such Debt Securities to any Holder who is not a United States
person in respect of any tax, assessment or governmental charge
and, if so, whether the Operating Partnership will have the option
to redeem such Debt Securities rather than pay such Additional
Amounts (and the terms of any such option); and
(22) any other terms of such Debt Securities not inconsistent with the
provisions of the Indenture (Section 301).
The Debt Securities may provide that less than the entire principal amount
thereof will be paid if the maturity of the Debt Securities is accelerated, or
bear no interest or bear interest at a rate which at the time of issuance is
below market rates ("Original Issue Discount Securities"). Special United
States federal income tax, accounting and other considerations apply to
Original Issue Discount Securities and will be described in the applicable
prospectus supplement.
Under the Indenture, the Operating Partnership will have the ability, in
addition to the ability to issue Debt Securities with terms different from
those of Debt Securities previously issued, without the consent of the Holders,
to reopen a previous issue of a series of Debt Securities and issue additional
Debt Securities of such series (Section 301).
Except as described in any applicable prospectus supplement, the Indenture
will not contain any other provisions that would limit the ability of the
Operating Partnership or the Company to incur indebtedness or that would afford
Holders of Debt Securities protection in the event of:
(1) a highly leveraged or similar transaction involving the Operating
Partnership or the Company, the management of the Operating
Partnership or the Company, or any affiliate of any such party;
(2) a change of control of the Operating Partnership or the Company; or
(3) a reorganization, restructuring, merger or similar transaction
involving the Operating Partnership or the Company that may
adversely affect the Holders of the Debt Securities.
However, the Company's Declaration of Trust contains restrictions on ownership
and transfers of the Company's Common Shares which are designed to preserve the
Company's status as a REIT and, therefore, may act to prevent or hinder a
change of control. The Company's shareholder rights plan and certain other
provisions of its Declaration of Trust and Bylaws may also inhibit changes in
control of the Company. See "Description of Common Shares" and "Certain
Provisions of Maryland Law and of the Company's Declaration of Trust and
Bylaws." You should refer to the applicable prospectus supplement for more
information with respect to any deletions from, modifications of, or additions
to the Events of Default or covenants of the Operating Partnership and the
Company that are described below, including any addition of a covenant or other
provision providing event risk or similar protection.
As used in this prospectus:
"Additional Amounts" means any additional amounts which are required
under the terms of a class of Debt Securities to be paid by the Operating
Partnership in respect of taxes imposed on certain Holders and which are
owing to such Holders.
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"Make-Whole Amount" means the amount, if any, in addition to principal
which is required under the terms of a class of Debt Securities to be paid
by the Operating Partnership to the Holders thereof in connection with any
optional redemption or accelerated payment of such Debt Securities.
"Paying Agent" means any person or entity authorized by the Operating
Partnership to pay on its behalf the principal of (and premium or Make-
Whole Amount, if any, on) and interest and Additional Amounts, if any, on
any Debt Securities or if no person or entity is authorized, the Operating
Partnership.
"Regular Record Date", when used with respect to an installment of
interest payable on any Interest Payment Date, means the date specified for
that purpose as contemplated by Section 301, whether or not a Business Day.
"United States person" means, unless otherwise specified with respect to
any Debt Securities under the Indenture, an individual who is a citizen or
resident of the United States, a corporation created or organized in or
under the laws of the United States or an estate or trust the income of
which is subject to United States federal income taxation regardless of its
source.
Denominations
Unless otherwise described in the applicable prospectus supplement, the Debt
Securities of any series issued in registered form will be issuable in
denominations of $1,000 and integral multiples thereof. Debt Securities issued
in global form, described below under "Book-Entry Securities," may be in any
denomination (Section 302).
Principal and Interest
Unless otherwise described in the applicable prospectus supplement, the
principal of (and premium or Make-Whole Amount, if any, on) and interest or
Additional Amounts on any series of Debt Securities will be payable at the
corporate trust office of the Trustee, provided that, at the option of the
Operating Partnership, payment of interest may be made by check mailed to the
address of the Person entitled thereto as it appears in the Security Register
or by wire transfer of funds to such Person at an account maintained within the
United States (Sections 301, 305, 306, 307 and 1002).
If any date for the payment of the principal of (and premium or Make-Whole
Amount, if any, on) or interest or Additional Amounts, if any, falls on a day
that is not a Business Day, the required payment shall be made on the next
Business Day as if it were made on the date such payment was due and no
interest or Additional Amounts shall accrue on the amount so payable for the
period from and after such date for the payment of principal (and premium or
Make-Whole Amount, if any) or interest, as the case may be, through and
including such next Business Day (Section 113). "Business Day" means any day,
other than a Saturday or Sunday, on which banks in the applicable place of
payment are not required or authorized by law or executive order to close. Any
interest not punctually paid or duly provided for on any Interest Payment Date
with respect to a Debt Security ("Defaulted Interest") will forthwith cease to
be payable to the Holder on the applicable Regular Record Date and either may
be paid to the person in whose name such Debt Security is registered at the
close of business on a special record date (the "Special Record Date") for the
payment of such Defaulted Interest to be fixed by the Trustee, notice of which
shall be given to the Holder of such Debt Security not less than 10 days prior
to such Special Record Date, or may be paid at any time in any other lawful
manner, all as more completely described in the Indenture (Section 307).
Registration and Transfer
Subject to certain limitations imposed upon Debt Securities issued in book-
entry form, the Debt Securities of any series will be exchangeable for other
Debt Securities of the same series and of a like aggregate principal amount and
tenor of different authorized denominations upon surrender of such Debt
Securities at the corporate
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trust office of the Trustee. In addition, the Debt Securities of any series may
be surrendered for conversion or registration of transfer thereof at the
corporate trust office of the Trustee. Every Debt Security surrendered for
conversion or registration of transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer. No service charge will be made
for any registration of transfer or exchange of any Debt Securities, but the
Operating Partnership may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith (Section 305). The
Operating Partnership may designate one or more offices or agencies where Debt
Securities may be presented or surrendered for payment or surrendered for
registration of transfer or exchange. If the Operating Partnership has
designated such an office or agency, the Operating Partnership may at any time
rescind the designation or approve a change in the location of such office or
agency, except that the Operating Partnership or the Company (in respect of a
series of Guaranteed Securities) will be required to maintain an office or
agency in each Place of Payment for such Debt Securities (Section 1002).
Neither the Operating Partnership nor the Trustee shall be required to (1)
issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days before any
selection of Debt Securities of that series to be redeemed and ending at the
close of business on the day of mailing of the relevant notice of redemption;
(2) register the transfer of or exchange any Debt Security, or portion thereof,
called for redemption, except the unredeemed portion of any Debt Security being
redeemed in part; or (3) issue, register the transfer of or exchange any Debt
Security which has been surrendered for repayment at the option of the Holder,
except the portion, if any, of such Debt Security not to be so repaid (Section
305).
Merger, Consolidation or Sale
The Operating Partnership or the Company, without the consent of the Holders
of any of the Debt Securities, may consolidate with, or sell, lease or convey
all or substantially all of its assets to, or merge with or into, any other
Person, if:
(1) either (A) the Operating Partnership or the Company, as the case
may be, shall be the continuing entity or (B) the successor entity
(if other than the Operating Partnership or the Company, as the
case may be) formed by or resulting from any such consolidation or
merger or which shall have received the transfer of such assets is
a Person organized and existing under the laws of the United States
or any state thereof and shall expressly assume payment of the
principal of (and premium or Make-Whole Amount, if any, on) and
interest and Additional Amounts, if any, on all of the Debt
Securities, in the case of any successor to the Operating
Partnership, or any applicable Guarantee, in the case of any
successor to the Company, and the due and punctual performance and
observance of all of the covenants and conditions contained in the
Indenture and, as applicable, such Debt Securities or Guarantee;
(2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Operating
Partnership or the Company or any subsidiary, as the case may be,
as a result thereof as having been incurred by the Operating
Partnership or the Company or such subsidiary, as the case may be,
at the time of such transaction, no Event of Default under the
Indenture, and no event which, after notice or the lapse of time,
or both, would become such an Event of Default, shall have occurred
and be continuing; and
(3) an officer's certificate and legal opinion covering such conditions
shall be delivered to the Trustee (Sections 801, 803, 804 and 806).
Certain Covenants
Under the Indenture, the Company and the Operating Partnership will
generally be required to comply with the following covenants, unless otherwise
provided with respect to a particular series of Debt Securities.
Existence. Except as permitted under "Merger, Consolidation or Sale," each
of the Operating Partnership and the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights and franchises; provided, however, that neither the Operating
Partnership nor the
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Company will be required to preserve any right or franchise if it determines
that the preservation thereof is no longer desirable in the conduct of its
business and that the loss thereof is not disadvantageous in any material
respect to the Holders of the Debt Securities (Section 1004).
Maintenance of Properties. We will cause all of our properties used or
useful in the conduct of our 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 our
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 we will not be prevented from selling or otherwise disposing of
for value our properties in the ordinary course of business (Section 1005).
Insurance. We will keep all of our insurable properties insured against loss
or damage at least equal to their full insurable value with financially sound
and reputable insurance companies (Section 1006).
Payment of Taxes and Other Claims. We will pay or discharge or cause to be
paid or discharged, before the same shall become delinquent, all taxes,
assessments and governmental charges levied or imposed on us or on the income,
profits or property of it or any subsidiary and all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien on the
property of it or any subsidiary; provided, however, that we will not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings (Section 1007).
Provision of Financial Information. Whether or not the Operating Partnership
or the Company is subject to Section 13 or 15(d) of the Exchange Act, the
Operating Partnership and the Company will, to the extent permitted under the
Exchange Act, file with the SEC the annual reports, quarterly reports and other
documents which they would have been required to file with the SEC pursuant to
such Section 13 or 15(d) if they were so subject, such documents to be filed
with the SEC on or prior to the respective dates (the "Required Filing Dates")
by which they would have been required so to file such documents. The Operating
Partnership and the Company will also in any event:
(1) within 30 days of each Required Filing Date:
(A) transmit by mail to all Holders of Debt Securities, as their
names and addresses appear in the Security Register, without cost to
such Holders, copies of the annual reports and quarterly reports
which the Operating Partnership and the Company would have been
required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act if they were subject to such Sections, and
(B) file with the Trustee copies of the annual reports, quarterly
reports and other documents which the Operating Partnership and the
Company would have been required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act if they were subject to such
Sections; and
(2) if filing such documents by us with the SEC is not permitted under
the Exchange Act, promptly on written request and payment of the
reasonable cost of duplication and delivery, supply copies of such
documents to any prospective Holder (Section 1008).
Additional Covenants and/or Modifications to the Covenants Described Above
Any additional covenants with which we must comply and/or modifications to
the covenants described above with respect to any particular series of Debt
Securities, including any covenants relating to limitations on incurrence of
indebtedness or other financial covenants, will be set forth in the Indenture
or in an indenture supplement thereto and described in the applicable
prospectus supplement.
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Events of Default, Notice and Waiver
The Indenture provides that the following events are "Events of Default"
with respect to any series of Debt Securities issued thereunder:
(1) default which continues for 30 days in the payment of any
installment of interest or Additional Amounts payable on any Debt
Security of such series;
(2) default in the payment of the principal of (or premium or Make-
Whole Amount, if any, on) any Debt Security of such series at its
Maturity;
(3) default in making any sinking fund payment as required for any Debt
Security of such series;
(4) default in the performance of any other covenant or warranty
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 as provided in the Indenture;
(5) default in the payment of an aggregate principal amount exceeding
$20,000,000 of any evidence of indebtedness of the Operating
Partnership or the Company (if the Debt Securities of such series
are Guaranteed Securities) or any mortgage, indenture or other
instrument under which such indebtedness is issued or by which such
indebtedness is secured, such default having occurred after the
expiration of any applicable grace period and having resulted in
the acceleration of the maturity of such indebtedness, but only if
such indebtedness is not discharged or such acceleration is not
rescinded or annulled;
(6) the entry by a court of competent jurisdiction of one or more
judgments, orders or decrees against the Operating Partnership, the
Company (if the Debt Securities of such series are Guaranteed
Securities) or any subsidiary of the Operating Partnership or the
Company (if the Debt Securities of such series are Guaranteed
Securities) in an aggregate amount (excluding amounts covered by
insurance) in excess of $20,000,000 and such judgments, orders or
decrees remain undischarged, unstayed or unsatisfied in an
aggregate amount (excluding amounts covered by insurance) in excess
of $20,000,000 for a period of 30 consecutive days;
(7) certain events of bankruptcy, insolvency or reorganization, or
court appointment of a receiver, liquidator or trustee of the
Operating Partnership, the Company (if the Debt Securities of such
series are Guaranteed Securities) or any Significant Subsidiary of
the Operating Partnership or the Company (if the Debt Securities of
such series are Guaranteed Securities) or for all or substantially
all of its properties; and
(8) any other Event of Default provided with respect to a particular
series of Debt Securities (Section 501).
The term "Significant Subsidiary" means each significant subsidiary (as defined
in Regulation S-X promulgated by the SEC) of Cabot Industrial Trust.
If an Event of Default under the Indenture with respect to Debt Securities
of any series at the time outstanding occurs and is continuing, then in every
such case, unless the principal of all of the outstanding Debt Securities of
such series shall already have become due and payable, the Trustee or the
Holders of not less than 25% in principal amount of the outstanding Debt
Securities of that series may declare the principal (or, if the Debt Securities
of that series are Original Issue Discount Securities or Indexed Securities,
such portion of the principal as may be specified in the terms thereof) of, and
the Make-Whole Amount, if any, on, all of the Debt Securities of that series to
be due and payable immediately by written notice thereof to the Operating
Partnership and the Company (in respect of a series of Guaranteed Securities)
and to the 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
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been obtained by the Trustee, the Holders of a majority in principal amount of
the outstanding Debt Securities of such series may rescind and annul such
declaration and its consequences if:
(1) the Operating Partnership or the Company (in respect of a series of
Guaranteed Securities) has paid or deposited with the Trustee all
required payments of the principal of (and premium or Make-Whole
Amount, if any, on) and interest and Additional Amounts, if any, on
the Debt Securities of such series, plus reasonable compensation,
expenses, disbursements and advances of the Trustee; and
(2) all Events of Default, other than the nonpayment of accelerated
principal (or premium or Make-Whole Amount, if any) or interest or
Additional Amounts, if any, with respect to Debt Securities of such
series have been cured or waived as provided in the Indenture
(Section 502).
The Indenture also provides 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
in the payment of the principal of (or premium or Make-Whole Amount, if any,
on) or interest or Additional Amounts, if any, on any Debt Security of such
series or in respect of a covenant or provision contained in the Indenture that
cannot be modified or amended without the consent of the Holder of each
outstanding Debt Security affected thereby (Section 513).
The Trustee is required to give notice to the Holders of Debt Securities
within 90 days of a default under the Indenture; provided, however, that the
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 or Make-Whole Amount, if any, on) or interest or
Additional Amounts, if any, 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 a Responsible Officer of the Trustee considers such withholding to
be in the interest of such Holders (Section 601).
The Indenture provides 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 reasonable indemnity (Section 507). 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 or Make-Whole Amount,
if any, on) and interest and Additional Amounts, if any, on such Debt
Securities on or after the respective due dates thereof (Section 508).
Subject to provisions in the Indenture 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
(Section 602). 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 on the
Trustee. However, the Trustee may refuse to follow any direction which is in
conflict with any law or the Indenture, which may involve the Trustee in
personal liability or which may be unduly prejudicial to the Holders of Debt
Securities of such series not joining therein (Section 512).
Within 120 days after the end of each fiscal year, the Operating Partnership
and, if applicable, the Company must 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 (Section 1009).
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Modification of the Indenture
Modifications of and amendments to the Indenture may be made with the
consent of the Holders of not less than a majority in principal amount of all
outstanding Debt Securities which are affected by such modification or
amendment; provided, however, that no such modification or amendment may,
without the consent of the Holder of each such Debt Security affected thereby:
(1) change the Stated Maturity of the principal of (or premium or Make-
Whole Amount, if any, on) or any installment of principal of or
interest or Additional Amounts, if any, on any such Debt Security;
(2) reduce the principal amount of, or the rate or amount of interest
on, or any premium or Make-Whole Amount on redemption of, or any
Additional Amounts payable with respect to, any such Debt Security,
or reduce the amount of principal of an Original Issue Discount
Security or Make-Whole Amount, if any, that would be due and
payable on declaration of acceleration of the maturity thereof or
would be provable in bankruptcy, or adversely affect any right of
repayment of the Holder of any such Debt Security;
(3) change the Place of Payment, or the currency, for payment of
principal of (and premium or Make-Whole Amount, if any, on) or
interest or Additional Amounts, if any, on any such Debt Security;
(4) impair the right to institute suit for the enforcement of any
payment on or with respect to any such Debt Security;
(5) 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;
(6) modify or affect in any manner adverse to the Holders the terms and
conditions of the obligations of the Company under the related
Guarantees in respect of the payment of principal of (or premium or
Make-Whole Amount, if any, on) or any interest or any Additional
Amounts on, any Guaranteed Securities; or
(7) 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 such Debt
Security (Section 902).
The Holders of not less than a majority in principal amount of each series
of outstanding Debt Securities have the right to waive compliance by the
Operating Partnership and, if applicable, the Company with certain covenants in
the Indenture (Section 1011).
The Operating Partnership, the Company and the Trustee may modify and amend
the Indenture without the consent of any Holder of Debt Securities for any of
the following purposes:
(1) to evidence the succession of another Person to the Operating
Partnership as obligor under the Indenture or the Company as the
guarantor under the applicable Guarantees;
(2) to add to our covenants for the benefit of the Holders of all or
any series of Debt Securities or to surrender any right or power
conferred on us in the Indenture;
(3) to add Events of Default for the benefit of the Holders of all or
any series of Debt Securities;
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(4) 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;
(5) to change or eliminate any provisions of the Indenture, provided
that any such change or elimination shall become effective only
when there are no Debt Securities outstanding of any series created
prior thereto which are entitled to the benefit of such provision;
(6) to secure the Debt Securities;
(7) to establish the form or terms of Debt Securities of any series;
(8) 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;
(9) to cure any ambiguity in the Indenture, correct or supplement any
provision in the Indenture which may be defective or inconsistent
or make any other changes with respect to matters or questions
arising under the Indenture, provided that such action shall not
adversely affect the interests of Holders of Debt Securities of any
series in any material respect;
(10) to close the Indenture with respect to the authentication and
delivery of additional series of Debt Securities or to qualify, or
maintain qualification of, the Indenture under the Trust Indenture
Act;
(11) to supplement any of the provisions of the Indenture to the extent
necessary to permit or facilitate defeasance and discharge of any
series of such Debt Securities, provided that such action shall
not adversely affect the interests of the Holders of the Debt
Securities of any series in any material respect; or
(12) to effect the assumption by the Company or a subsidiary thereof of
Debt Securities then outstanding under the Indenture (Section
901).
The Indenture provides that in determining whether the Holders of the
requisite principal amount of outstanding Debt Securities of a series have
concurred in any request, demand, authorization, direction, notice, consent or
waiver thereunder or whether a quorum is present at a meeting of Holders of
Debt Securities:
(1) the principal amount of an Original Issue Discount Security that
shall be deemed outstanding shall be the amount of the principal
thereof that would be due and payable as of the date of such
determination on declaration of acceleration of the maturity
thereof;
(2) the principal amount of a 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 clause (1) above);
(3) 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 pursuant to Section 301 of the
Indenture; and
(4) Debt Securities owned by the Operating Partnership, the Company or
any other obligor upon the Debt Securities or any Affiliate of the
Operating Partnership, the Company or of such other obligor shall
be disregarded (Section 101).
The Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series (Section 1501). A meeting may be called at any time
by the Trustee, and also, upon request, by the Operating Partnership, the
Company (in respect of a series of Guaranteed Securities) or the Holders of at
least 10% in
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principal amount of the outstanding Debt Securities of such series, in any such
case upon notice given as provided in the Indenture (Section 1502).
Except for any consent that must be given by the Holder of each Debt
Security affected by certain modifications and amendments of the Indenture, any
resolution presented at a meeting or adjourned meeting duly reconvened at 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.
However, 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 duly called
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 such 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 such series. The quorum at any
meeting called to adopt a resolution, and at any reconvened meeting, will be
Persons holding or representing a majority in principal amount of the
outstanding Debt Securities of a series. However, if any action is to be taken
at such meeting with respect to a consent or waiver which 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 (Section 1504).
Notwithstanding the foregoing provisions, 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 a specified percentage in principal amount of all outstanding Debt
Securities affected thereby, or of the Holders of such series and one or more
additional series: (i) there shall be no minimum quorum requirement for such
meeting; and (ii) the principal amount of the outstanding Debt Securities of
such series that vote in favor of such request, demand, authorization,
direction, notice, consent, waiver or other action shall be taken into account
in determining whether such request, demand, authorization, direction, notice,
consent, waiver or other action has been made, given or taken under the
Indenture (Section 1504).
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by the Indenture to be given or taken by a specified
percentage in principal amount of the Holders of any or all series of Debt
Securities may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such specified percentage of Holders in
person or by agent duly appointed in writing; and, except as otherwise
expressly provided in the Indenture, such action shall become effective when
such instrument or instruments are delivered to the Trustee. Proof of execution
of any instrument or of a writing appointing any such agent shall be sufficient
for any purpose of the Indenture and (subject to Article Six of the Indenture)
conclusive in favor of the Trustee, the Operating Partnership and the Company,
if made in the manner specified above (Section 1507).
Discharge, Defeasance and Covenant Defeasance
The Operating Partnership may discharge certain obligations to Holders of
any series of Debt Securities that have not already been delivered to the
Trustee for cancellation and that either have become due and payable or will
become due and payable within one year (or scheduled for redemption within one
year) by irrevocably depositing with the 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 or Make-Whole Amount, if any) and interest and Additional Amounts,
if any, payable 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 (Section 1401, 1402, 1403 and 1404).
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The Indenture provides that, if the provisions of Article Fourteen are made
applicable to the Debt Securities of or within any series pursuant to Section
301 of the Indenture, the Operating Partnership may elect either a "defeasance"
or a "covenant defeasance" with respect to such Debt Securities at any time, or
at such time or times as may be specified under the terms of such securities.
Either of such elections may be made, however, only upon the irrevocable
deposit by the Operating Partnership or the Company (in respect of a series of
Guaranteed Securities) with the Trustee, in trust, of an specified amount, in
either such currency or currencies, currency unit or units or composite
currency or currencies in which such Debt Securities are payable at Stated
Maturity or Governmental Obligations (as defined below), or both. The
"specified amount" is the amount applicable to such Debt Securities which
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 or Make-Whole Amount, if any, on) and interest and Additional
Amounts, if any, on such Debt Securities, and any mandatory sinking fund or
analogous payments thereon, on the scheduled due dates therefor (Section 1404).
A "defeasance" means an election by the Operating Partnership to defease and
discharge itself and, if applicable, the Company from any and all obligations
with respect to such Debt Securities. However, the Operating Partnership and,
if applicable, the Company would, in the event of a defeasance, still be
obligated to:
(1) pay Additional Amounts, if any, upon the occurrence of certain
events of tax, assessment or governmental charge with respect to
payments on such Debt Securities;
(2) register the transfer or exchange of such Debt Securities;
(3) replace temporary or mutilated, destroyed, lost or stolen Debt
Securities;
(4) maintain an office or agency in respect of such Debt Securities;
and
(5) hold moneys for payment in trust (Section 1402).
A "covenant defeasance" means an election by the Operating Partnership to
release itself and, if applicable, the Company from its obligations with
respect to such Debt Securities under Sections 1004 to 1008, inclusive, of the
Indenture (being the restrictions described above under "--Certain Covenants")
and, if provided pursuant to Section 301 of the Indenture, their obligations
with respect to any other covenant. Any omission to comply with such
obligations would not constitute a default or an Event of Default with respect
to such Debt Securities (Section 1403).
A trust may only be established for the purpose of effecting a defeasance or
covenant defeasance if, among other things, the Operating Partnership or, if
applicable, the Company has delivered to the Trustee an Opinion of Counsel (as
specified in the 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. In the case of defeasance, such Opinion of Counsel
must further refer to and be based on a ruling of the Service or a change in
applicable United States Federal income tax law occurring after the date of the
Indenture (Section 1404).
"Government Obligations" means securities which are:
(1) 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
(2) 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
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Obligation or a specific payment of interest on or principal of any such
Government Obligation held by such custodian for the account of the holder of a
depository receipt, provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the Government Obligation or the specific payment of interest on or principal
of the Government Obligation evidenced by such depository receipt (Section
101).
Unless otherwise described in the applicable prospectus supplement, if after
the Operating Partnership or, if applicable, 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 Section 301 of the
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 shall be deemed to have been, and will be, fully discharged
and satisfied through the payment of the principal of (and premium or Make-
Whole Amount, if any, on) and interest and Additional Amounts, if any, 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 (Section 1405). "Conversion Event" means the cessation of use of:
(1) a currency (other than the Euro or other currency unit) 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 Euro 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 Euro for the
purposes for which it was established.
Unless otherwise described in the applicable prospectus supplement, all
payments of principal of (and premium or Make-Whole Amount, if any, on) and
interest and Additional Amounts, if any, 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 United States dollars (Section 101).
In the event the Operating Partnership effects covenant defeasance with
respect to any Debt Securities and such Debt Securities are declared to be due
and payable because of the occurrence of any Event of Default other than the
Event of Default described in clause (4) under "--Events of Default, Notice and
Waiver" with respect to Sections 1004 through 1008, inclusive, of the Indenture
(which Sections would no longer be applicable to such Debt Securities), the
amount in such currency, currency unit or composite currency in which such Debt
Securities are payable, and Government Obligations on deposit with the Trustee,
will be sufficient to pay amounts due on such Debt Securities at the time of
their Stated Maturity but may not be sufficient to pay amounts due on such Debt
Securities at the time of the acceleration resulting from such Event of
Default. However, the Operating Partnership or, if applicable, the Company
would 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, including any
modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
No Conversion Rights
The Debt Securities will not be convertible into or exchangeable for any
capital stock of the Company or equity interest in the Operating Partnership.
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Book-Entry Securities
The Debt Securities of a series may be represented by one or more global
certificates (the "Global Securities"). A Global Security representing Debt
Securities will be deposited with, or on behalf of, The Depository Trust
Company ("DTC"), or other successor depository appointed by the Operating
Partnership (DTC or such other depository being the "Depository") and
registered in the name of the Depository or its nominee. Unless otherwise
provided in the prospectus supplement, Debt Securities will not be issued in
definitive form. If the aggregate principal amount of any issue exceeds $200
million, one certificate will be issued with respect to each $200 million of
principal amount and an additional certificate will be issued with respect to
any remaining principal amount of such issue.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc., the American
Stock Exchange, Inc. and the National Association of Securities Dealers, Inc.
Access to the DTC system is also available to others such as securities brokers
and dealers, banks and trust companies that clear through or maintain a
custodial relationship with a Direct Participant, either directly or indirectly
("Indirect Participants"). The Rules applicable to DTC and its Participants are
on file with the SEC.
Upon the issuance by the Operating Partnership of Debt Securities
represented by a Global Security, purchases of Debt Securities under the DTC
system must be made by or through Direct Participants, which will receive a
credit for the Debt Securities on DTC's records. The ownership interest of each
actual purchaser of each Debt Security ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from DTC of their purchase, but
Beneficial Owners are expected to receive written confirmations providing
details of the transaction, as well as periodic statements of their holdings,
from the Direct or Indirect Participant through which the Beneficial Owner
entered into the transaction. Transfers of ownership interests in the Debt
Securities are to be accomplished by entries made on the books of Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in Debt Securities, except
in the event that use of the book-entry system for the Debt Securities is
discontinued. The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
the Global Security.
So long as the Depository for the Global Security, or its nominee, is the
registered owner of the Global Security, the Depository or its nominee, as the
case may be, will be considered the sole owner or holder of the Debt Securities
represented by such Global Security for all purposes under the Indenture.
Except as provided below, owners of beneficial interests in Debt Securities
represented by the Global Security will not be entitled to have Debt Securities
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of Debt Securities in definitive
form and will not be considered the owners or holders thereof under the
applicable Indenture.
To facilitate subsequent transfers, all Debt Securities deposited by
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of Debt Securities with DTC and their registration in
the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Debt Securities; DTC's records
reflect only the identity of the Direct Participants to whose accounts such
Debt Securities are credited, which may or may not be the Beneficial
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Owners. The Participants will remain responsible for keeping account of their
holdings on behalf of their customers. Conveyance of notices and other
communications by DTC to Direct Participants, by Direct Participants to
Indirect Participants, and by Direct Participants and Indirect Participants to
Beneficial Owners will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Neither DTC nor Cede & Co. will consent or vote with respect to Debt
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the
Operating Partnership as soon as possible after the record date. The Omnibus
Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Debt Securities are credited on the record
date (identified in a listing attached to the Omnibus Proxy).
Payments of principal of (and premium or Make-Whole Amount, if any, on) and
interest and Additional Amounts, if any, on the Debt Securities represented by
the Global Security registered in the name of DTC or its nominee will be made
by the Operating Partnership through the Trustee under the Indenture or a
Paying Agent, which may also be the Trustee under the Indenture, to DTC or its
nominee, as the case may be, as the registered owner of the Global Security.
None of the Operating Partnership, the Company, the Trustee, or the Paying
Agent will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests of
the Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
The Operating Partnership has been advised that DTC, upon receipt of any
payment of principal, premium, Make-Whole Amount, interest or Additional
Amounts in respect of a Global Security, will credit Direct Participants'
accounts on the payable date in accordance with their respective holdings shown
on DTC's records unless DTC has reason to believe that it will not receive
payment on the payable date. Payments by Participants to Beneficial Owners will
be governed by standing instructions and customary practices, as is the case
with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of such Participant and not of
DTC, the Paying Agent, the Operating Partnership or the Company, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of principal, premium and interest to DTC is the responsibility of the
Paying Agent, the Operating Partnership or the Company, as the case may be,
disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners shall be the responsibility of Direct and Indirect Participants.
If the Depository with respect to a Global Security is at any time unwilling
or unable to continue as Depository and a successor Depository is not appointed
by the Operating Partnership within 90 days, the Operating Partnership will
issue certificated notes in exchange for the Debt Securities represented by
such Global Security.
The above information concerning the Depository and the Depository's book-
entry system has been obtained from sources that we believe to be reliable, but
we take no responsibility for the accuracy thereof.
No Personal Liability
No past, present or future Trustee, officer, employee or shareholder, as
such, of the Operating Partnership or the Company or any successor thereof will
have any liability for any obligations of the Operating Partnership or the
Company under the Debt Securities or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each Holder of Debt
Securities by accepting such Debt Securities waives and releases all such
liability. The waiver and release are part of the consideration for the issue
of Debt Securities (Section 111).
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Trustee
The Indenture provides that there may be more than one Trustee thereunder,
each with respect to one or more series of Debt Securities. Any Trustee under
the 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. In the event that 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 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 the 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 Indenture (Section 609).
GUARANTEES OF DEBT SECURITIES
The Company may unconditionally and irrevocably guarantee, on a senior or
subordinated basis, the due and punctual payment of principal of (and premium
or Make-Whole Amount, if any, on) and interest and Additional Amounts, if any,
on one or more of the classes of Debt Securities, and the due and punctual
payment of any sinking fund payments thereon, when and as the same shall become
due and payable, whether at Stated Maturity, upon redemption or otherwise
(Section 1601). The applicability and any additional terms of any Guarantee
relating to a series of Debt Securities will be described in the applicable
prospectus supplement. Unless otherwise discussed in the applicable prospectus
supplement, the Guarantees will be unsecured obligations of the Company.
If a Guarantee is applicable to a class of Debt Securities, you should refer
to the Indenture and the applicable prospectus supplement for a more detailed
description of the specific terms of such Guarantee, including any additional
covenants of the Company, the outstanding principal amount of indebtedness and
other obligations, if any, that will rank senior to such Guarantee and, if
applicable, any subordination provisions of such Guarantee.
DESCRIPTION OF COMMON SHARES
General
The Declaration of Trust provides that the Company may issue up to
150,000,000 shares of beneficial interest ("Shares"), which may consist of
Common Shares and such other types or classes of shares of beneficial interest
as the Trustees may create and authorize from time to time, including Preferred
Shares. At December 31, 1998, the Company had 18,586,764 Common Shares and no
Preferred Shares outstanding.
As permitted by Title 8 of the Corporations and Associations Article of the
Annotated Code of Maryland, as amended (the "Maryland REIT Law"), the
Declaration of Trust contains a provision permitting the Board of Trustees,
without any action by the shareholders of the Company, to amend the Declaration
of Trust to increase or decrease the aggregate number of Shares or the number
of shares of any class of shares of beneficial interest that the Trust has
authority to issue. The additional Shares, including possibly Common Shares,
will be available for issuance without further action by the Company's
shareholders, unless action by the shareholders is required by applicable law
or the rules of any stock exchange or automated quotation system on which the
Company's securities may be listed or traded. Acting pursuant to this
authority, the Board has authorized the issuance of a new class of Preferred
Shares in connection with its adoption of the Shareholder Rights Plan described
below under "Shareholder Rights Plan."
The following description sets forth certain general terms and provisions of
the Common Shares to which any prospectus supplement may relate, including a
prospectus supplement which provides for Common Shares issuable pursuant to
subscription offerings or rights offerings or upon conversion of Preferred
Shares which are
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offered pursuant to such prospectus supplement and convertible into Common
Shares for no additional consideration. The statements below describing the
Common Shares are in all respects subject to and qualified in their entirety by
reference to the applicable provisions of the Declaration of Trust and the
Bylaws of the Company (the "Bylaws"). For further information regarding the
Common Shares, including a description of certain provisions that could have
the effect of delaying, deferring or preventing a change in control, see
"Certain Provisions of Maryland Law and of the Company's Declaration of Trust
and Bylaws."
The issued and outstanding Common Shares are fully paid and, except as set
forth below under "--Shareholder Liability," non-assessable. Subject to the
provisions of the Declaration of Trust regarding Excess Shares (which are
described below under "Restrictions on Transfer"), each outstanding Common
Share entitles the holder to one vote on all matters requiring a vote of
shareholders, including the election of Trustees. Holders of Common Shares do
not have the right to cumulate their votes in the election of Trustees, which
means that the holders of a majority of the outstanding Common Shares can elect
all of the Trustees then standing for election. Holders of Common Shares are
entitled to such distributions as may be declared from time to time by the
Board out of funds legally available therefor. The Company currently pays
regular quarterly dividends. Holders of Common Shares have no conversion,
redemption, preemptive or exchange rights to subscribe to any securities of the
Company. In the event of a liquidation, dissolution or winding up of the
affairs of the Company, the holders of the Common Shares are entitled to share
ratably in the assets of the Company remaining after provision for payment of
all liabilities to creditors and payment of liquidation preferences and subject
to the rights of holders of other series of Preferred Shares, if any. The
rights of holders of the Common Shares are subject to the rights and
preferences established by the Board for any series of Preferred Shares which
may subsequently be issued by the Company, including any Preferred Shares
issues under the Shareholder Rights Plan. See "Description of Preferred Shares"
and "Shareholder Rights Plan."
Shareholder Rights Plan
On June 11, 1998, our Board of Trustees declared a dividend of one preferred
share purchase right for each Common Share outstanding, payable to common
shareholders of record at the close of business on July 15, 1998. The holders
of any additional Common Shares issued after that date and before the
redemption or expiration of the purchase rights are also entitled to receive
one purchase right for each such additional Common Share issued. Each purchase
right entitles the holder, under certain circumstances, to purchase one one-
hundredth of a share of a series of participating preferred shares, par value
$.01 per share (the "Participating Preferred Shares") at a price of $85.00 per
one one-hundredth of a Participating Preferred Share, subject to adjustment.
The purchase rights will become exercisable if a person or group of persons (an
"Acquiring Person") (1) acquires 15% or more of our outstanding Common Shares
or (2) announces a tender offer or exchange offer for 15% or more of our
outstanding Common Shares or (3) files a document with a governmental agency
regarding any transaction or series of transactions that would result in such
person or persons becoming the beneficial owner of 15% or more of our
outstanding Common Shares. Certain existing holders of Common Shares specified
in the Rights Agreement referred to below (the "Grandfathered Persons") who may
be deemed to have beneficially owned 15% or more of our outstanding Common
Shares as of the date of the initial distribution of the purchase rights will
not be deemed, however, to be Acquiring Persons unless they become the
beneficial owner of an additional 1% of our outstanding Common Shares without
our prior written approval. The terms of the purchase rights are set forth in a
Rights Agreement, dated as of June 11, 1998, as amended, between the Company
and BankBoston, N.A., as Rights Agent.
If any person or group of affiliated or associated persons becomes an
Acquiring Person, each purchase right other than purchase rights held by the
Acquiring Person will entitle the holder to purchase, at the purchase right's
then current exercise price, a number of Common Shares having a market value
equal to twice the purchase right's exercise price. If we are acquired pursuant
to a merger or other business combination, or if 50% or more of our
consolidated assets or earning power is sold after any person or group has
become an Acquiring Person, the purchase rights will entitle each holder to
purchase, at the purchase right's then current exercise price, a number of the
acquiring company's common shares having a market value equal to twice the
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purchase right's exercise price. The purchase rights will expire on June 11,
2008 and, prior to the time they become exercisable, are subject to redemption
in whole, but not in part, at a price of $.01 per purchase right payable in
cash, Common Shares or any other form of consideration determined by our Board
of Trustees. In addition, we have the right under certain circumstances to
exchange each purchase right that has become exercisable for one newly issued
Common Share.
Restrictions on Transfer
To qualify as a REIT under the Tax Code, the Company must meet certain
requirements concerning the ownership of our outstanding shares of beneficial
interest. Specifically, not more than 50% in value of our outstanding shares of
beneficial interest may be owned, directly or indirectly (taking into account
certain attribution rules), by five or fewer individuals (as defined in the Tax
Code to include certain entities) at any time during the last half of a taxable
year (other than the first year we elected to be taxed as a REIT), and 100 or
more persons must be beneficial owners of our shares during at least 335 days
of a taxable year of twelve months or during a proportionate part of a shorter
taxable year.
To assist us in meeting the above requirements, the Declaration of Trust
provides, subject to certain exceptions described below, that no person may
own, or be deemed to own by virtue of the ownership attribution or "deemed
ownership" provisions of the Tax Code, more than 9.8% of our issued and
outstanding shares or 9.8% of the total value of such shares (the "Ownership
Limit"). Any transfer of Common Shares or Preferred Shares that would result in
any person owning, directly or indirectly (taking into account the applicable
attribution rules), more Common Shares or Preferred Shares than permitted by
the Ownership Limit, or would result in our Common Shares and Preferred Shares
being owned by fewer than 100 persons (determined without reference to any
special rules of attribution or "deemed ownership" under the Tax Code), or
would result in the Company being "closely held" within the meaning of Section
856(h) of the Tax Code, will be null and void, and the intended transferee will
acquire no rights in such Common or Preferred Shares.
Subject to certain exceptions described below, if any purported transfer of
Common or Preferred Shares would result in any person owning, directly or
indirectly (taking into account the applicable attribution rules), more Common
or Preferred Shares than permitted by the Ownership Limit, would result in our
Common Shares being owned by fewer than 100 persons, or would result in the
Company being "closely held" within the meaning of Section 856(h) of the Tax
Code, the Common or Preferred Shares exceeding the Ownership Limit will be
designated as "excess shares" and will be deemed to be automatically
transferred to a trust (the "Share Trust") effective as of the close of
business on the business day before the purported transfer of such excess
Common or Preferred Shares. The record holder of the Common or Preferred Shares
that are designated as excess shares (the "Purported Transferee") will have no
rights in such shares except as described below. We will designate the trustee
of the Share Trust (the "Share Trustee"), but the designee will not be
affiliated with us. We will name one or more charitable organizations as
beneficiaries of the Share Trust.
Excess shares will remain issued and outstanding Common or Preferred Shares
and will be entitled to the same rights and privileges as all other shares of
the same class or series. The Share Trust will receive all dividends and
distributions on the excess shares and will hold such dividends and
distributions in trust for the benefit of the Beneficiary. The Share Trustee
will vote all excess shares. At our direction, the Share Trustee must transfer
the shares held in the Excess Share Trust to a person whose ownership of the
shares will not violate the Ownership Limit. Such transfer must be made within
60 days after the latest of the date of the transfer that resulted in such
excess shares and the date that our Board of Trustees determines in good faith
that a transfer resulting in excess shares has occurred, if we do not receive
notice of such transfer. Upon such a transfer, which is subject to our waiving
our purchase right described below, the Purported Transferee generally will
receive from the Share Trustee the lesser of the price per share such Purported
Transferee paid for the Common or Preferred Shares that were designated as
excess shares (or, in the case of a gift or devise, the market price (as
defined below) per share on the date of such transfer) and the price per share
received by the Share Trustee from the sale of such excess shares. Any amounts
received by the Share Trustee in excess of the amounts to be paid to the
Purported Transferee will be distributed to the Beneficiary.
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The excess shares will be deemed to have been offered for sale to us, or our
designee, at a price per share equal to the lesser of the price per share in
the transaction that created such excess shares (or, in the case of a gift or
devise, the market price per share on the date of such transfer) and the market
price per share on the date that we accept, or our designee accepts, such
offer. We have the right to accept such offer for a period of 90 days after the
later of the date of the purported transfer which resulted in such excess
shares and the date we determine in good faith that a transfer resulting in
such excess shares occurred.
"Market price" means the last sales price reported on the New York Stock
Exchange for a particular class of shares on the trading day immediately
preceding the relevant date, or if not then traded on the New York Stock
Exchange, the last reported sales price for such class of shares on the trading
day immediately preceding the relevant date as reported on any exchange or
quotation system on or through which such class of shares may be traded, or if
not then traded on or through any exchange or quotation system, then the market
price of such class of shares on the relevant date as determined in good faith
by our Board of Trustees.
Any person who acquires or attempts to acquire Common Shares or Preferred
Shares in violation of the foregoing restrictions, or any person who owned
Common or Preferred Shares that were transferred to a Share Trust, will be
required to give us immediate written notice of such event or, in the event of
a proposed or attempted transfer, must give at least 15 days prior written
notice of such event, and will be further required to provide to us such other
information as we may request in order to determine the effect, if any, of such
transfer on our REIT status.
The Declaration of Trust requires all persons who own, directly or
indirectly, more than 5% (or such lower percentage as may be required pursuant
to the regulations adopted under the Tax Code) of the number or value of the
outstanding Common and Preferred Shares, within 30 days after January 1 of each
year, to provide to us a written statement of the name and address of such
direct or indirect owner, the number of Common and Preferred Shares owned
directly or indirectly by such person and a description of how such shares are
held. In addition, each direct or indirect shareholder must provide to us such
additional information as we may request in order to determine the effect, if
any, of such ownership on our REIT status and to ensure compliance with the
Ownership Limit.
The Ownership Limit generally will not apply to the acquisition of Common
Shares or Preferred Shares by an underwriter that participates in a public
offering of such shares. In addition, the Board of Trustees, upon receipt of a
ruling from the Internal Revenue Service or an opinion of counsel and upon such
other conditions as the Board may direct, may exempt a person from the
Ownership Limit under certain circumstances. However, the Board may not grant
an exemption from the Ownership Limit to any proposed transferee whose
ownership, direct or indirect (taking into account certain attribution rules),
of shares of beneficial interest in excess of the Ownership Limit would result
in the termination of our REIT status. The foregoing restrictions will continue
to apply until the Board determines that it is no longer in our best interest
to attempt to qualify, or to continue to qualify, as a REIT.
The Ownership Limit could have the effect of delaying, deferring or
preventing a transaction or a change in control that might involve a premium
price for the Common Shares or that might for other reasons be considered by
shareholders to be in their best interest.
All certificates representing our Common or Preferred Shares are required to
bear a legend referring to the restrictions described above.
Shareholder Liability
Both Maryland statutory law governing real estate investment trusts
organized under the laws of that state and the Declaration of Trust provide
that no shareholder of the Company will be personally liable for any
obligations of the Company (other than the obligation to pay to the Company the
consideration for which shares were or are to be issued) solely by virtue of
his status as a shareholder. The Declaration of Trust further provides that the
Company shall indemnify each shareholder against claims or liabilities to which
the
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shareholder may become subject by reason of his being or having been a
shareholder, and that the Company shall reimburse each shareholder for all
legal and other expenses reasonably incurred by him in connection with any such
claim or liability, unless, in either case, such claim or liability arises out
of the shareholder's bad faith, willful misconduct or gross negligence, and
provided that the shareholder gives prompt notice as to any such claims or
liabilities and takes such action as will permit the Company to conduct the
defense thereof. In addition, it is the Company's policy to include a clause in
its contracts which provides that shareholders assume no personal liability for
obligations entered into on behalf of the Company. However, with respect to
tort claims, contractual claims where shareholder liability is not so negated,
claims for taxes and certain statutory liability, a shareholder may, in some
jurisdictions, be personally liable to the extent that such claims are not
satisfied by the Company. The Company carries public liability insurance which
it considers adequate. For this reason, the Company believes that any risk of
personal liability to shareholders is limited to situations in which the
Company's assets plus its insurance coverage are not sufficient to satisfy the
claims against the Company and its shareholders.
Indemnification of Trustees and Officers
Maryland statutory law permits a Maryland REIT to include in its declaration
of trust a provision limiting the liability of its trustees and officers to the
trust and its shareholders for money damages except for liability resulting
from actual receipt of an improper benefit or profit in money, property or
services or from active and deliberate dishonesty established by a final
judgment and that is material to the cause of action. Under the Declaration of
Trust, the Company is required to indemnify each Trustee, officer, employee and
agent to the fullest extent permitted by Maryland law, as amended from time to
time, in connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that he or she was a Trustee, officer, employee or agent of the
Company or is or was serving at the request of the Company as a director,
trustee, officer, partner, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust, other enterprise or employee
benefit plan, from all claims and liabilities to which such person may become
subject by reason of service in such capacity and to pay or reimburse
reasonable expenses, as such expenses are incurred, of each Trustee in
connection with any such proceedings. The Board believes that the
indemnification provision will enhance the Company's ability to attract and
retain superior Trustees and officers for the Company and subsidiaries of the
Company.
Additionally, the Company has entered into indemnity agreements with each of
its executive officers and Trustees that require the Company to indemnify such
persons to the fullest extent permitted by Maryland law in connection with any
threatened, pending or completed litigation to which they may become subject as
a result of their positions with the Company.
Transfer Agent and Registrar
BankBoston, N.A. has been appointed as transfer agent and registrar for the
Common Shares and we will specify in the applicable prospectus supplement the
transfer agent and registrar for any other of the Offered Securities.
DESCRIPTION OF SECURITYHOLDER PURCHASE RIGHTS
As set forth under "Plan of Distribution" below, the Company may sell
Offered Securities directly through Securityholder Purchase Rights. If Offered
Securities are to be sold through Securityholder Purchase Rights, such
Securityholder Purchase Rights will be distributed as a dividend to
securityholders of the Company or the Operating Partnership, for which the
securityholders will not be required to pay any separate consideration. The
prospectus supplement relating to any offer by the Company of Offered
Securities pursuant to Securityholder Purchase Rights will describe the
specific terms of the Securityholder Purchase Rights, including, where
applicable:
(1) the type and terms, and the number or amount of Offered Securities
which will be offered pursuant to the Securityholder Purchase
Rights;
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(2) the period during which and the price at which the Securityholder
Purchase Rights will be exercisable;
(3) the number of Securityholder Purchase Rights then outstanding;
(4) any provisions for changes to or adjustments in the exercise price
of the Securityholder Purchase Rights; and
(5) any other material terms of the Securityholder Purchase Rights.
DESCRIPTION OF PREFERRED SHARES
The Declaration of Trust provides that the Company may issue up to
150,000,000 Shares, consisting of Common Shares and such other types or classes
of securities, including Preferred Shares, as the Trustees may create and
authorize from time to time and designate as representing a beneficial interest
in the Company. At December 31, 1998, we had no outstanding Preferred Shares
but the Board had authorized the issuance of a class of Series A Junior
Participating Preferred Shares pursuant to the Shareholders Rights Plan
described under "Description of Common Shares--Shareholders Rights Plan" below.
The Company will contribute proceeds of issuances of each series of Preferred
Shares to the Operating Partnership in exchange for "mirror" preferred
partnership units having terms that are substantially similar to those of such
Preferred Shares.
The following description summarizes general terms and provisions of the
Preferred Shares to which any prospectus supplement may relate. The statements
below describing the Preferred Shares and the summary included in the
applicable prospectus supplement are not complete and for more detail you
should refer to the applicable provisions of the Declaration of Trust and
Bylaws and any applicable amendment to the Declaration of Trust or Articles
Supplementary designating terms of a series of Preferred Shares (a "Designating
Amendment"). Each Designating Amendment will be filed as an exhibit to the
registration statement relating to this prospectus or incorporated by reference
into such registration statement by the filing of a Current Report on Form 8-K.
Terms
Subject to the limitations prescribed by the Declaration of Trust, the Board
of Trustees is authorized to fix the number of shares constituting each series
of Preferred Shares and the designations and powers, preferences and relative,
participating, optional or other special rights and qualifications, limitations
or restrictions thereof, including such provisions as may be desired concerning
voting, redemption, dividends, dissolution or the distribution of assets,
conversion or exchange, and such other subjects or matters as may be fixed by
resolution of the Board of Trustees. The Board may provide to holder of
Preferred Shares preferences, powers and rights that are senior to those of
holders of Common Shares which could have the effect of delaying, deferring or
preventing a transaction or a change in control of the Company. The Preferred
Shares will, when issued, be fully paid and nonassessable by the Company
(except as described under "--Shareholder Liability" below) and will have no
preemptive rights.
The prospectus supplement relating to any series of Preferred Shares offered
by the Company will describe the specific terms thereof, including, where
applicable:
(1) the title and stated value of such Preferred Shares;
(2) the number of such Preferred Shares offered, the liquidation
preference per share and the offering price of such Preferred
Shares;
(3) the dividend rate(s), period(s) and/or payment date(s) or method(s)
of calculation thereof applicable to such Preferred Shares;
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(4) the date from which dividends on such Preferred Shares shall
accumulate, if applicable;
(5) the procedures for any auction and remarketing, if any, for such
Preferred Shares;
(6) the provisions for a sinking fund, if any, for such Preferred
Shares;
(7) the provisions for redemption, if applicable, of such Preferred
Shares;
(8) any listing of such Preferred Shares on any securities exchange;
(9) the terms and conditions, if applicable, upon which such Preferred
Shares will be convertible into Common Shares of the Company,
including the conversion price (or manner of calculation thereof);
(10) any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Shares;
(11) a discussion of federal income tax considerations applicable to
such Preferred Shares;
(12) the relative ranking and preferences of such Preferred Shares as
to dividend rights and rights upon liquidation, dissolution or
winding up of the affairs of the Company;
(13) any limitations on issuance of any series of Preferred Shares
ranking senior to or on a parity with such series of Preferred
Shares as to dividend rights and rights upon liquidation,
dissolution or winding up of the affairs of the Company; and
(14) any limitations on direct or indirect or constructive beneficial
ownership and restrictions on transfer, in each case as may be
appropriate to preserve the status of the Company as a REIT.
Rank
Unless otherwise specified in the applicable prospectus supplement, the
Preferred Shares will, with respect to dividend rights and rights upon
liquidations, dissolution or winding up of the Company, rank (i) senior to all
classes or series of Common Shares of the Company, and to all equity securities
ranking junior to such Preferred Shares, (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 Shares 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
Shares. The term "equity securities" does not include convertible debt
securities.
Dividends
Holders of the Preferred Shares of each series will be entitled to receive,
when, as and if declared by the Board of Trustees, out of assets of the Company
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 or record as they appear on the share
transfer books of the Company on such record dates as shall be fixed by the
Board of Trustees.
Dividends on any series of the Preferred Shares may be cumulative or non-
cumulative, 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 Board of Trustees fails to declare a
dividend payable on a dividend payment date on any series of the Preferred
Shares for which dividends are non-cumulative, then the holders of such series
of the Preferred Shares 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 are declared payable on any future dividend payment
date.
If Preferred Shares of any series are outstanding, no dividends will be
declared or paid or set apart for payment on any capital stock of the Company
of any other series ranking, as to dividends, on a parity with or
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junior to the Preferred Shares of such series for any period. However,
dividends may be so declared or paid or set apart for payment on such capital
stock of the Company if:
(1) such series of Preferred Shares has a cumulative dividend, full
cumulative dividends have been or contemporaneously are declared
and paid or declared and a sum sufficient for the payment thereof
set apart for such payment on the Preferred Shares of such series
for all past dividend periods and the then current dividend period;
or
(2) such series of Preferred Shares does not have a cumulative
dividend, full dividends for the then current dividend period have
been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof set apart for such payment
on the Preferred Shares of such series.
When dividends are not paid in full (or a sum sufficient for such full payment
is not so set apart) upon Preferred Shares of any series and the shares of any
other series of Preferred Shares ranking on a parity as to dividends with the
Preferred Shares of such series (the "Equally Ranked Series"), all dividends
declared upon Preferred Shares of such series and any Equally Ranked Series
shall be declared "pro rata." As used in the preceding sentence, "pro rata"
means that the amount of dividends declared per Preferred Share of such series
and the other Equally Ranked Series shall bear to each other the same ratio
that accrued dividends per share on the Preferred Shares of such series (not
including any accumulation in respect of unpaid dividends if such Preferred
Shares do not have a cumulative dividend) and such other Equally Ranked Series
bear to each other. No interest, or sum or money in lieu of interest, shall be
payable in respect of any dividend payment or payments on Preferred Shares of
such series which may be in arrears.
Except as provided in the immediately preceding paragraph, no dividends
(other than in Common Shares or other capital shares ranking junior to the
Preferred Shares of such series as to dividends and upon liquidation) shall be
declared or paid or set aside for payment (or other distribution declared or
made) upon the Common Shares, or any other capital shares of the Company
ranking junior to or on a parity with the Preferred Shares of such series as to
dividends or upon liquidation unless:
(1) if such series of Preferred Shares has a cumulative dividend, full
cumulative dividends on the Preferred Shares of such series have
been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof set apart for payment for
all past dividend periods and the then current dividend period, and
(2) if such series of Preferred Shares does not have a cumulative
dividend, full dividends on the Preferred Shares of such series
have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for payment
for the then current dividend period.
Also, no Common Shares, or any other capital shares of the Company ranking
junior to or on a parity with the Preferred Shares of such series as to
dividends or upon liquidation, shall be redeemed, purchased or otherwise
acquired for any consideration (or any moneys paid to or made available for a
sinking fund for the redemption of any such shares) by the Company. However,
such a redemption, purchase or other acquisition is allowed if it is a
conversion into or an exchange for other capital shares of the Company ranking
junior to the Preferred Shares of such series as to dividends and upon
liquidation.
Redemption
Individual series of Preferred Shares may be made subject to mandatory
redemption or redemption at the option of the Company, as a whole or in part.
The terms, the times and the redemption prices thereof will be described in the
applicable prospectus supplement.
The prospectus supplement relating to a series of Preferred Shares that is
subject to mandatory redemption will specify the number of such Preferred
Shares that shall be redeemed by the Company in each year
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commencing after a date to be specified, at a redemption price per share to be
specified, together with an amount equal to all accrued and unpaid dividends
thereon (which shall not, if such Preferred Shares do 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 Shares of any series is
payable only from the net proceeds of the issuance of capital shares of the
Company, the terms of such Preferred Shares may provide that, if no such
capital shares 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 Shares shall automatically and mandatorily be
converted into the applicable capital shares of the Company pursuant to the
conversion provisions specified in the applicable prospectus supplement.
However, no shares of any series of Preferred Shares shall be redeemed
unless all outstanding Preferred Shares of such series are simultaneously
redeemed unless:
(1) if such series of Preferred Shares has a cumulative dividend, full
cumulative dividends on all shares of any series of Preferred
Shares shall have been or contemporaneously are declared and paid
or declared and a sum sufficient for the payment thereof set apart
for payment for all past dividend periods and the then current
dividend period, or
(2) if such series of Preferred Shares does not have a cumulative
dividend, full dividends of the Preferred Shares of any series have
been or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof set apart for payment for
the then current dividend period.
Also, the Company shall not purchase or otherwise acquire directly or
indirectly any Preferred Shares of such series (except by conversion into or
exchange for capital shares of the Company ranking junior to the Preferred
Shares of such series as to dividends and upon liquidation) unless the
conditions described in clauses (1) and (2) above are satisfied.
The restrictions stated in the foregoing paragraph, however, shall not
prevent the purchase or acquisition of Preferred Shares of such series to
preserve the REIT status of the Company or pursuant to a purchase or exchange
offer made on the same terms to holders of all outstanding Preferred Shares of
such series.
If fewer than all of the outstanding Preferred Shares of any series 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 or for which
redemption is requested by such holder (with adjustments to avoid redemption of
fractional shares) or by lot in a manner determined by the Company.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of Preferred Shares of
any series to be redeemed at the address shown on the share transfer books of
the Company. Each notice shall state:
(1) the redemption date;
(2) the number of shares and series of the Preferred Shares to be
redeemed;
(3) the redemption price;
(4) the place or places where certificates for such Preferred Shares
are to be surrendered for payment of the redemption price;
(5) that dividends on the shares to be redeemed will cease to accrue on
such redemption date; and
(6) the date upon which the holder's conversion rights, if any, as to
such shares shall terminate.
If fewer than all the Preferred Shares of any series are to be redeemed, the
notice mailed to each such holder thereof shall also specify the number of
Preferred Shares to be redeemed from each such holder. If notice of
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redemption of any Preferred Shares 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 holder of any Preferred Shares so call for redemption, then from and
after the redemption date dividends will cease to accrue on such Preferred
Stock, and all rights of the holders of such shares will terminate, except the
right to receive the redemption price.
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 any Common Shares or any other class or series of
capital shares of the Company ranking junior to the Preferred Shares in the
distribution of assets upon any liquidation, dissolution or winding up of the
Company, the holders of each series of Preferred Shares 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 Shares do not have a cumulative dividend). After
payment of the full amount of the liquidating distributions to which they are
entitled, the holder of Preferred Shares will have no right or claim to any of
the remaining assets of the Company. In the event that, upon any such voluntary
or involuntary liquidation, dissolution or winding up, the available assets of
the Company are insufficient to pay the amount of the liquidating distributions
on all outstanding Preferred Shares and the corresponding amounts payable on
all shares of other classes or series of capital shares of the Company ranking
on a parity with the Preferred Shares in the distribution of assets, then the
holders of the Preferred Shares and all other such classes or series of capital
shares 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
Preferred Shares, the remaining assets of the Company shall be distributed
among the holders of any other classes or series of capital shares ranking
junior to the Preferred Shares 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 corporation, trust or entity, or
the sale, lease or conveyance of all or substantially all of the property or
business of the Company, shall not be deemed to constitute a liquidation,
dissolution or winding up of the Company.
Voting Rights
Holders of the Preferred Shares of each series will not have any voting
rights, except as set forth below or in the applicable prospectus supplement or
as required by applicable law. The following is a summary of the voting rights
that, unless provided otherwise in the applicable prospectus supplement or as
required by applicable law, will apply to each series of Preferred Shares.
If six quarterly dividends (whether or not consecutive) payable on the
Preferred Shares of such series or any other series of Preferred Shares ranking
on a parity with such series of Preferred Shares with respect in each case to
the payment of dividends, amounts upon liquidation, dissolution and winding up
("Parity Shares") are in arrears, whether or not earned or declared, the number
of Trustees then constituting the Board will be increased by two, and the
holders of Preferred Shares of such series, voting together as a class with the
holders of any other series of Parity Shares (any such other series, the
"Voting Preferred Shares"), will have the right to elect two additional
trustees to serve on the Board at any annual meeting of shareholders or a
properly called special meeting of the holders of Preferred Shares of such
series and such Voting Preferred Shares and at each subsequent annual meeting
of shareholders until all such dividends and dividends for the current
quarterly period on the Preferred Shares of such series and such other Voting
Preferred Shares have been paid or declared and set aside for payment. Such
voting rights will terminate when all such accrued and unpaid dividends have
been declared and paid or set aside for payment. The term of office of all
trustees so elected will terminate with the termination of such voting rights.
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The approval of two-thirds of the outstanding Preferred Shares of such
series and all other series of Voting Preferred Shares similarly affected,
voting as a single class, will be required in order to:
(1) amend the Declaration of Trust to affect materially and adversely
the rights, preferences or voting power of the holders of the
Preferred Shares of such series or the Voting Preferred Shares;
(2) enter into a share exchange that affects the Preferred Shares of
such series, consolidate with or merge into another entity, or
permit another entity to consolidate with or merge into the
Company, unless in each such case each Preferred Share of such
series remains outstanding without a material and adverse change to
its terms and rights or is converted into or exchanged for
preferred shares of the surviving entity having preferences,
conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms or conditions
of redemption thereof identical to that of a Preferred Share of
such series (except for changes that do not materially and
adversely affect the holders of the Preferred Shares of such
series); or
(3) authorize, reclassify, create, or increase the authorized amount of
any class of shares having rights senior to the Preferred Shares of
such series with respect to the payment of dividends or amounts
upon liquidation, dissolution or winding up.
However, the Company may create additional classes of Parity Shares and series
of Preferred Shares ranking junior to such series of Preferred Shares with
respect in each case to the payment of dividends, amounts upon liquidation,
dissolution and winding up ("Junior Shares"), increase the authorized number of
Parity Shares and Junior Shares and issue additional series of Parity Shares
and Junior Shares without the consent of any holder of Preferred Shares of such
series.
Except as provided above and as required by law, the holders of Preferred
Shares of each series will not be entitled to vote on any merger or
consolidation involving the Company or a sale of all or substantially all of
the assets of the Company.
Conversion Rights
The terms and conditions, if any, upon which any series of Preferred Shares
is convertible into Common Shares will be set forth in the applicable
prospectus supplement relating to such Preferred Shares. The terms will
include:
(1) the number of Common Shares into which the Preferred Shares are
convertible and the conversion price (or manner of calculation
thereof);
(2) the conversion period and provisions as to whether conversion will
be at the option of the holders of the Preferred Shares or the
Company; and
(3) the events requiring an adjustment of the conversion price, the
manner of determining any such adjustment and provisions affecting
conversion in the event of the redemption of such series of
Preferred Shares.
Restrictions on Ownership
The Designating Amendment for each series of Preferred Shares may contain
provisions restricting the ownership and transfer of the Preferred Shares
similar to those described under "Description of Common Shares--Restrictions on
Transfer." The applicable prospectus supplement will specify any additional
ownership limitations relating to a series of Preferred Shares and all
certificates representing Preferred Shares will bear a legend referring to any
such restrictions.
Registrar and Transfer Agent
The registrar and transfer agent for the Preferred Shares will be set forth
in the applicable prospectus Supplement.
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DESCRIPTION OF DEPOSITARY SHARES
General
The Company may issue Depositary Shares, each of which will represent a
fractional interest in a Preferred Share of a particular series of Preferred
Shares, as described in the applicable prospectus supplement. The Company will
deposit Preferred Shares represented by Depositary Shares with a depositary
(the "Preferred Shares Depositary") pursuant to a separate deposit agreement
(the "Deposit Agreement") among the Company, the Preferred Shares Depositary
and the holders from time to time of the depositary receipts issued by the
Preferred Shares 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 of Preferred Shares represented by
the Depositary Shares evidenced by the Depositary Receipt, to all the rights
and preferences of the class of the Preferred Shares represented by the
Depositary Shares (including dividend, voting, conversion, redemption and
liquidation rights).
Immediately after the Company issues and delivers the Preferred Shares to a
Preferred Shares Depositary, it will cause the Preferred Shares Depositary to
issue the Depositary Receipts evidencing the Depositary Shares on its behalf.
The statements made in this section relating to the Deposit Agreements and the
Depositary Receipts are summaries of certain anticipated provisions. These
summaries are not complete and may be modified by the applicable prospectus
supplement. For more detail you should refer to the Deposit Agreement itself,
which will be included with or incorporated by reference in the prospectus
supplement relating to any offer of Depositary Shares.
Dividends and Other Distributions
The Preferred Shares Depositary will distribute all cash dividends or other
cash distributions received in respect of a series of Preferred Shares to the
record holders of Depositary Receipts evidencing the related Depositary Shares
in proportion to the number of 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 the Preferred
Shares Depositary.
In the event of a distribution other than in cash, the Preferred Shares
Depositary will distribute property that it receives to the record holders of
Depositary Receipts entitled to the property, subject to certain obligations of
holders to file proofs, certificates and other information and to pay certain
charges and expenses to the Preferred Shares Depositary, unless the Preferred
Shares Depositary determines that it is not feasible to make the distribution,
in which case the Preferred Shares Depositary may, with our approval, sell the
property and distribute the net proceeds from the sale to the holders.
No distribution will be made in respect of any Depositary Share to the
extent that it represents any Preferred Shares converted into Excess Shares (as
defined above in "Description of Common Shares--Restrictions on Transfer") or
otherwise converted or exchanged.
Withdrawal of Stock
Upon surrender of the Depositary Receipts at the corporate trust office of
the Preferred Shares Depositary (unless the related Depositary Shares have
previously been called for redemption or converted, or converted into Excess
Shares or otherwise), the holders will be entitled to delivery at the corporate
trust office, or upon each such holder's order, of the number of whole or
fractional shares of the series of Preferred Shares 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 series of Preferred Shares on the basis of the
proportion of Preferred Shares represented by each Depositary Share as
specified in the applicable prospectus supplement, but holders of such
Preferred Shares 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 Preferred Shares to
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be withdrawn, the Preferred Shares Depositary will deliver to such holder at
the same time a new Depositary Receipt evidencing the excess number of
Depositary Shares.
Redemption of Depositary Shares
Whenever the Company redeems Preferred Shares held by the Preferred Shares
Depositary, the Preferred Shares Depositary will redeem as of the same
redemption date the number of the Depositary Shares representing such series of
Preferred Shares so redeemed, provided the Company has paid in full to the
Preferred Shares Depositary the redemption price of the Preferred Shares to be
redeemed plus an amount equal to any accrued and unpaid dividends on the
Preferred Shares 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 series of
Preferred Shares. If the Company redeems fewer than all the Depositary Shares,
the Depositary Shares selected will be redeemed pro rata (as nearly as may be
practicable without creating fractional Depositary Shares), by lot or by any
other equitable method that the Company determines will not result in the
issuance of any Excess Shares.
From and after the date fixed for redemption, all dividends in respect of a
series of Preferred Shares so called for redemption will cease to accrue, the
Depositary Shares 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 redemption and any money or other property to
which the holders of the Depositary Receipts were entitled upon redemption upon
surrender of the Depositary Receipts to the Preferred Shares Depositary.
Voting of the Preferred Shares
Upon receipt of notice of any meeting at which the holders of a series of
Preferred Shares deposited with the Preferred Shares Depositary are entitled to
vote, the Preferred Shares Depositary will mail the information contained in
the notice of meeting to the record holders of the Depositary Receipts
evidencing the Depositary Shares which represent such series of Preferred
Shares. 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
series of Preferred Shares) will be entitled to instruct the Preferred Shares
Depositary as to the exercise of the voting rights pertaining to the amount of
Preferred Shares represented by the holder's Depositary Shares. The Preferred
Shares Depositary will vote the amount of such series of Preferred Shares
represented by the Depositary Shares in accordance with such instructions, and
the Company will agree to take all reasonable action which the Preferred Shares
Depositary may deem necessary in order to enable the Preferred Shares
Depositary to do so. The Preferred Shares Depositary will abstain from voting
the amount of Preferred Shares represented by the Depositary Shares to the
extent it does not receive specific instructions from the holders of Depositary
Receipts evidencing the Depositary Shares. The Preferred Shares Depositary will
not be responsible for any failure to carry 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 the Preferred Shares
Depositary's negligence or willful misconduct.
Liquidation Preference
In the event that the Company voluntarily or involuntarily liquidates,
dissolves or wind ups, the holders of each Depositary Receipt will be entitled
to the fraction of the liquidation preference accorded each Preferred Share
represented by the Depositary Share evidenced by the Depositary Receipt as set
forth in the applicable prospectus Supplement.
Conversion of Preferred Shares
Unless, and to the extent, otherwise provided in the applicable prospectus
supplement, the Depositary Shares, as such, will not be convertible into Common
Shares or any other securities or property. See "Description of Common Shares--
Restrictions on Transfer."
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Amendment and Termination of a Deposit Agreement
The form of Depositary Receipt evidencing Depositary Shares which represent
Preferred Shares and any provision of the Deposit Agreement may at any time be
amended by agreement between the Company and the Preferred Shares Depositary.
However, any amendment that materially and adversely alters the rights of the
holders of Depositary Receipts or that would be inconsistent in any material
adverse respect with the rights granted to the holders of the related Preferred
Shares 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
will 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 of
Preferred Shares and all money and other property, if any, represented by the
Depositary Receipt, except in order to comply with applicable law. Every holder
of an outstanding Depositary Receipt at the time any such amendment becomes
effective will 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.
The Company may terminate a Deposit Agreement upon not less than 30 days'
prior written notice to the Preferred Shares Depositary if such termination is
necessary to preserve the Company's status as a REIT or a majority of each
series of Preferred Shares subject to the Deposit Agreement consents to
termination, at which time the Preferred Shares Depositary will deliver or make
available to each holder of Depositary Receipts, upon surrender of the
Depositary Receipts held by the holder, the number of whole or fractional
Preferred Shares as are represented by the Depositary Shares evidenced by the
Depositary Receipts, together with any other property held by the Preferred
Shares Depositary with respect to the Depositary Receipts. The Company will
agree that if a Deposit Agreement is terminated to preserve its status as a
REIT, then it will use its best efforts to list each series of Preferred Shares
issued upon surrender of the related Depositary Shares. In addition, a Deposit
Agreement will automatically terminate if:
(1) the Company has redeemed all outstanding Depositary Shares;
(2) there shall have been a final distribution in respect of each
series of Preferred Shares in connection with the Company's
liquidation, dissolution or winding up and such distribution shall
have been distributed to the holders of the Depositary Receipts
evidencing the Depositary Shares representing such series of
Preferred Shares; or
(3) each related Preferred Share shall have been converted into a
security of the Company which is not represented by Depositary
Shares.
Charges of Preferred Shares 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 Shares 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 Shares Depositary for any duties requested by the holders to be
performed which are outside of those expressly provided for in the Deposit
Agreement.
Resignation and Removal of Preferred Shares Depositary
A Preferred Shares 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 Shares Depositary, any such resignation or removal to take effect
upon the appointment of a successor Preferred Shares Depositary. A successor
Preferred Shares Depositary must be appointed within 60 days after delivery of
the notice of resignation or removal and must be a bank or trust company with
its principal office in the United States and a combined capital and surplus of
at least $50,000,000.
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Miscellaneous
The Preferred Shares Depositary will forward to holders of Depositary
Receipts any reports and communications from the Company which are received by
the Preferred Shares Depositary with respect to the related Preferred Shares.
The Company will not be liable, and the Preferred Shares Depositary will not
be liable, if either is prevented from or delayed in, by law or any
circumstances beyond its control, performing the obligations under the Deposit
Agreement. The Company's obligations and the obligations of the Preferred
Shares Depositary under the Deposit Agreement will be limited to performing
their respective duties in good faith and without negligence (in the case of
any action or inaction in the voting of a series of Preferred Shares
represented by the Depositary Shares), and without gross negligence or willful
misconduct (in the case of any other action or inaction). The Company will not
be obligated, and the Preferred Shares Depositary will not be obligated, to
prosecute or defend any legal proceeding in respect of any Depositary Receipts,
Depositary Shares or a series of Preferred Shares represented thereby unless
satisfactory indemnity is furnished. The Company and the Preferred Shares
Depositary may rely on written advice of counsel or accountants, or information
provided by persons presenting shares of Preferred Shares represented thereby
for deposit, holders of Depositary Receipts or other persons that the Company
believes in good faith to be competent to give such information, and on
documents that each believes in good faith to be genuine and signed by a proper
party.
If a Preferred Shares Depositary receives conflicting claims, requests or
instructions from any holders of Depositary Receipts, on the one hand, and from
the Company, on the other hand, the Preferred Shares Depositary will be
entitled to act on such claims, requests or instructions received from the
Company.
DESCRIPTION OF WARRANTS
We may issue Warrants for the purchase of Common Shares or Preferred Shares.
Warrants may be issued independently or together with any other Offered
Securities that are offered pursuant to any prospectus supplement and the
Warrants may be attached to or may be transferable separately from such Offered
Securities. We will issue each series of Warrants under a separate warrant
agreement that we will enter into with a warrant agent specified in the
applicable prospectus supplement. The warrant agent will act solely as the
Company's agent in connection with the Warrants of such series and will not
assume any obligation or relationship of agency or trust for or with respect to
any provisions of the Warrants.
The prospectus supplement relating to any Warrants offered by the Company
will describe the specific terms thereof, including, where applicable:
(1) the title of the Warrants;
(2) the aggregate number of the Warrants;
(3) the price or prices at which the Warrants will be issued;
(4) the designation, terms and number of Common Shares or Preferred
Shares purchasable upon exercise of the Warrants;
(5) the designation and terms of any securities with which the Warrants
are issued and the number of any Warrants issued with each such
security;
(6) the date, if any, on and after which the Warrants and the related
Common Shares or Preferred Shares will be separately transferable,
including any limitations on ownership and transfer of the Warrants
as may be appropriate to preserve the Company's status as a REIT;
(7) the price at which each Common Share or Preferred Share purchasable
upon exercise of the Warrants may be purchased;
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(8) the date on which the right to exercise the Warrants will commence
and the date on which the right will expire;
(9) the minimum or maximum amount of the Warrants which may be
exercised at any one time;
(10) information with respect to book-entry procedures, if any;
(11) a discussion of federal income tax considerations relevant to the
Warrants; and
(12) any other terms of the Warrants, including terms, procedures and
limitations relating to the exchange and exercise of the Warrants.
CERTAIN PROVISIONS OF MARYLAND LAW AND OF
THE COMPANY'S DECLARATION OF TRUST AND BYLAWS
We have summarized in the following paragraphs provisions of Maryland law,
the Declaration of Trust and the Bylaws that we consider to be significant.
This summary is not complete and reference is made to Maryland law as well as
the Declaration of Trust and the Bylaws, which are filed as exhibits to the
Registration Statement of which this prospectus is a part. See "Where You Can
Find More Information."
Board of Trustees
The Declaration of Trust and the Bylaws provide that the number of Trustees
of the Company may be established by a majority of a quorum of the entire Board
of Trustees but may not be fewer than three nor more than fifteen. As of
December 31, 1998, there are seven Trustees. The Declaration of Trust also
provides that a majority of the Trustees must be "Independent Trustees." An
"Independent Trustee" is a person who is not an officer or employee of Cabot
Industrial Trust. Any vacancy on the Board of Trustees arising for any cause
other than an increase in the number of Trustees may be filled by a majority of
the remaining Trustees, even if less than a quorum, or by a sole remaining
Trustee. Any vacancy created by an increase in the number of Trustees may be
filled by a majority of the entire Board. Only the Independent Trustees may
nominate a replacement for a vacancy in an Independent Trustee position. In the
event a majority of the Board are not Independent Trustees, the remaining
Independent Trustees (or, if there are no Independent Trustees, the remaining
members of the Board) shall elect that number of Independent Trustees necessary
to cause the Board to include a majority of Independent Trustees.
The Trustees are divided into three classes, holding office initially for
one-year, two-year and three-year terms, respectively. As these initial terms
expire, Trustees in each class are elected for terms of three years and until
their successors are duly elected and qualified. At least two annual meetings
of shareholders, instead of one, will thus generally be required to effect a
change in a majority of the Board of Trustees. The Company believes that
classification of the Board of Trustees in this manner helps to assure the
continuity and stability of the Company's business strategies and policies as
determined by the Board of Trustees. The classified Trustee provision could
have the effect of making the removal of incumbent Trustees 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 considered by some or many shareholders to be beneficial to
the Company and its shareholders.
Holders of Common Shares have no right to cumulative voting for the election
of Trustees. Consequently, at each annual meeting of shareholders, the holders
of a majority of Common Shares voting together as a single class will be able
to elect all of the successors of the Trustees whose terms expire at that
meeting. Trustees may be removed with or without cause upon the affirmative
vote of at least two-thirds of the votes entitled to be cast in the election of
Trustees, but only by a vote taken at a shareholder meeting. This provision has
the effect of limiting shareholders' power to remove incumbent Trustees to
cases in which a substantial majority of shareholders approve such removal.
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Business Combinations
Under the Maryland General Corporation Law, as amended from time to time
(the "MGCL"), as applicable to Maryland real estate investment trusts, certain
"business combinations" (including mergers, consolidations, share exchanges and
asset transfers and certain issuances or reclassifications of equity
securities) between a Maryland real estate investment trust and any person who
beneficially owns ten percent or more of the voting power of the trust's shares
or an affiliate or associate of the trust who, at any time within the two-year
period prior to the date in question, was the beneficial owner of ten percent
or more of the voting power of the then outstanding voting stock of the trust
(an "Interested Shareholder"), or an affiliate of such an Interested
Shareholder, are prohibited for five years after the most recent date on which
the Interested Shareholder became an Interested Shareholder. Thereafter, any
such business combination must be recommended by the board of trustees of such
trust and approved by the affirmative vote of at least (1) 80% of the votes
entitled to be cast by holders of outstanding voting shares of beneficial
interest of the trust and (2) two-thirds of the votes entitled to be cast by
holders of voting shares of the trust, other than shares held by the Interested
Shareholder with whom (or with whose affiliate) the business combination is to
be effected or held by an affiliate or associate of the Interested Shareholder,
voting together as a group, unless, among other conditions, the trust's common
shareholders receive at least a minimum price (as defined in the MGCL) for
their shares and the consideration is received in cash or in the same form as
previously paid by the Interested Shareholder for its shares. These provisions
of Maryland law do not apply, however, to business combinations that are
approved or exempted by the board of trustees of the trust prior to the time
that the Interested Shareholder becomes an Interested Shareholder.
Control Share Acquisitions
The MGCL, as applicable to Maryland real estate investment trusts, provides
that "control shares" (as defined below) of a Maryland real estate investment
trust acquired in a "Control Share Acquisition" (as defined below) 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 of beneficial
interest owned by the acquirer, by officers or by trustees who are employees of
the trust. "Control Shares" are voting shares of beneficial interest which, if
aggregated with all other such shares of beneficial interest previously
acquired by the acquirer or in respect of which the acquirer is able to
exercise or direct the exercise of voting power (except solely by virtue of a
revocable proxy), would entitle the acquirer to exercise voting power in
electing trustees within one of the following ranges of voting power: (1) one-
fifth or more but less than one-third; (2) one-third or more but less than a
majority, or (3) a majority or more of all voting power. Control Shares do not
include shares the acquiring person is then entitled to vote as a result of
having previously obtained shareholder approval. A "Control Share Acquisition"
means the acquisition of Control Shares, subject to certain exceptions. As
permitted under Maryland law we have elected in our Bylaws that these control
share provisions of Maryland law will not apply to Control Share Acquisitions
involving the Company, but such election could be changed in the future.
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 trustees of the trust to call a special meeting of
shareholders to be held within 50 days of demand to consider the voting rights
of the shares. If no request for a meeting is made, the trust may itself
present the question at any shareholders meeting.
If voting rights are not approved at the meeting or if the acquiring person
does not deliver an acquiring person statement as required by the statute,
then, subject to certain conditions and limitations, the trust may redeem any
or all of the Control Shares (except those for which voting rights have
previously been approved) at their 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 acquirer or of any meeting of shareholders at
which the voting rights of such shares are considered and not approved. If
voting rights for Control Shares are approved at a shareholders meeting and the
acquirer becomes entitled to vote a majority of the shares entitled to vote,
all other shareholders may exercise appraisal rights. The fair value of the
shares as determined for purposes of such appraisal rights may not be less than
the highest price per share paid by the acquirer in the control share
acquisition.
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The Control Share Acquisition statute does not apply to shares acquired in a
merger, consolidation or share exchange if the trust is a party to the
transaction or to acquisitions approved or exempted by the declaration of trust
or bylaws of the trust.
Amendment to the Declaration of Trust
The Trustees, by a two-thirds vote, may amend the provisions of the
Declaration of Trust, without shareholder approval, to qualify the Company as a
REIT. The Board of Trustees may also amend the Declaration of Trust, without
shareholder approval, to increase or decrease the aggregate number of Shares
that the Company has the authority to issue. Otherwise, the Company's
Declaration of Trust generally may be amended only by the affirmative vote or
written consent of the holders of not less than a majority of the outstanding
Shares then entitled to vote, except with respect to: (1) the election of
Trustees (which, under our Bylaws, requires a plurality of all the votes cast
at a shareholders' meeting at which a quorum is present), (2) the removal of
Trustees (which requires the affirmative vote of the holders of two-thirds of
our outstanding shares of beneficial interest entitled to vote generally in the
election of Trustees, which action can only be taken by vote at a shareholder
meeting), (3) our merger with or into another entity, consolidation or sale (or
other disposition) of all or substantially all of our assets (which each
requires the affirmative vote of the holders of two-thirds of our outstanding
shares entitled to vote on the matter, which action can only be taken by vote
at a shareholder meeting), and (4) our dissolution (which requires the
affirmative vote of two-thirds of our outstanding shares).
Termination of the Company and REIT Status
The Declaration of Trust permits (1) the termination of the Company and the
discontinuation of the operations of the Company by the affirmative vote or
written consent of the holders of not less than two-thirds of the Company's
outstanding Shares of all classes and (2) the termination of the Company's
qualification as a REIT if such qualification, in the opinion of the Board of
Trustees, is no longer advantageous to the shareholders.
Advance Notice of Trustee Nominations and New Business
The Bylaws provide that with respect to an annual meeting of shareholders,
nominations of persons for election to the Board of Trustees and the proposal
of business to be considered by shareholders may be made only:
(1) pursuant to the Company's notice of the meeting;
(2) by or at the direction of the Board of Trustees, or
(3) by a shareholder who was a shareholder of record at the time of
giving advance notice of such nomination or proposal and is
entitled to vote at the meeting and has complied with the advance
notice procedures contained in the Bylaws.
The Bylaws also provide that, with respect to special meetings of
shareholders, only the business specified in the Company's notice of meeting
may be brought before the meeting of shareholders.
Anti-takeover Effect of Certain Provisions of Maryland Law and of the
Declaration of Trust and Bylaws
The business combination provisions of the MGCL, the provisions of the
Declaration of Trust on classification of the Board of Trustees and removal of
Trustees and the advance notice provisions of the Bylaws could delay, defer or
prevent a transaction or a change in control of the Company that might involve
a premium price for holders of Common Shares or which shareholders might
otherwise consider to be in their best interest.
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OPERATING PARTNERSHIP AGREEMENT
General
Substantially all of the Company's assets, including its interests in its
properties, are held by, and its operations are conducted through, the
Operating Partnership. At December 31, 1998, the Company held Units equal to
42.7% of the economic interest in the Operating Partnership and the Company
controls the Operating Partnership in its capacity as the sole general partner.
The Company's interest in the Operating Partnership entitles it to share in
cash distributions from, and in the profits and losses of, the Operating
Partnership in proportion to the Company's percentage ownership of the
Operating Partnership (apart from tax allocations of profits and losses to take
into account pre-contribution property appreciation). The Operating
Partnership's limited partners (the "Limited Partners") own the economic
interest in the Operating Partnership not held by the Company.
The Company holds one Unit in the Operating Partnership for each Common
Share that it has issued. The net proceeds from issuances of Common Shares are
contributed by the Company to the Operating Partnership in exchange for an
equivalent number of Units.
As the general partner of the Operating Partnership, the Company has the
exclusive power under the Operating Partnership's limited partnership agreement
(the "Operating Partnership Agreement") to manage and conduct the business of
the Operating Partnership. The Board of Trustees of the Company manages the
affairs of the Company by directing the affairs of the Operating Partnership.
The Operating Partnership is responsible for, and pays when due, its share of
all administrative and operating expenses of the properties.
The following summary of the Operating Partnership Agreement, including the
descriptions of certain provisions set forth elsewhere in this prospectus, is
not complete and for more detail you should refer to the Operating Partnership
Agreement, which was filed as an exhibit to a Registration Statement previously
filed and is available as described under "Where You Can Find More
Information."
Management
The Operating Partnership has been organized as a Delaware limited
partnership pursuant to the terms of the Operating Partnership Agreement. The
Company, as the sole general partner of the Operating Partnership, generally
has full, exclusive and complete discretion in managing and controlling the
Operating Partnership. The limited partners of the Operating Partnership have
no authority to transact business for, or to participate in the management
activities or decisions of, the Operating Partnership, except as provided in
the Operating Partnership Agreement and as provided by applicable law. However,
the consent of all the limited partners is required to (1) take any action that
would make it impossible to carry on the ordinary business of the Operating
Partnership, except as otherwise provided in the Operating Partnership
Agreement; (2) possess Operating Partnership property, or assign any rights to
specific Operating Partnership property for other than an Operating Partnership
purpose, except as otherwise provided in the Operating Partnership Agreement;
(3) admit a person as a partner, except as otherwise provided in the Operating
Partnership Agreement; or (4) perform any act that would subject a limited
partner to liability as a general partner in any jurisdiction or any other
liability except as provided in the Operating Partnership Agreement or under
Delaware law.
Indemnification
The Operating Partnership Agreement provides that each individual made a
party to a proceeding by reason of his status as a general partner or an
officer of the Operating Partnership or a trustee or officer of the Company or
any other person as the Company may designate from time to time in its sole and
absolute discretion (each, an "Indemnitee") will be indemnified and held
harmless by the Operating Partnership for any act relating to the operation of
the Operating Partnership unless it is established that (1) the act or omission
of the Indemnitee was material to the matter giving rise to the proceeding and
either was committed in bad faith
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or was the result of active and deliberate dishonesty; (2) the Indemnitee
actually received an improper personal benefit of money, property or services;
or (3) in the case of any criminal proceeding, the Indemnitee had reasonable
cause to believe that the act or omission was unlawful. The Operating
Partnership Agreement further provides that the termination of any proceeding
by judgment, order or settlement does not create a presumption that the
Indemnitee did not meet the requisite standard of conduct set forth above. The
termination of any proceeding by conviction or upon a plea of nolo contendere
or its equivalent, or an entry of an order of probation prior to judgment,
would, under the Operating Partnership Agreement, create a rebuttable
presumption that the individual acted in a manner contrary to that specified
above. Any indemnification so made shall be made only out of the assets of the
Operating Partnership.
Capital Contributions
When the Company contributes additional capital to the Operating Partnership
from the proceeds of Common Shares (or preferred shares of beneficial interest)
issued by the Company, the Company's interest in the Operating Partnership will
be increased on a proportionate basis based upon the number of Common Shares
(or Preferred Shares) issued to the extent the net proceeds from, or the
property received in consideration for, the issuance thereof are used to fund
the contribution.
Tax Matters
Pursuant to the Operating Partnership Agreement, the Company is the tax
matters partner of the Operating Partnership and, as such, has authority to
make certain tax related decisions and tax elections under the Code on behalf
of the Operating Partnership.
Operations
The Operating Partnership Agreement allows the Company to operate the
Operating Partnership in a manner that enables the Company to satisfy the
requirements for being classified as a REIT. The Operating Partnership
Agreement also requires the distribution of cash available for distribution of
the Operating Partnership quarterly on a basis in accordance with the Operating
Partnership Agreement.
Duties and Conflicts
The Operating Partnership Agreement provides that the Company shall not
enter into or conduct any business other than in connection with its ownership,
acquisition and disposition of partnership interests in the Operating
Partnership and the management of the business and incidental activities of the
Operating Partnership. Therefore, all activities pertaining to the acquisition,
development, management and operation of any properties, must be conducted
through the Operating Partnership.
Term
The Operating Partnership will continue in full force and effect until
December 31, 2097 or until sooner dissolved upon (1) the withdrawal of the
Company as a general partner (unless all of the limited partners elect to
continue the Operating Partnership), or (2) by the election of the Company,
with the consent of a majority in interest of Limited Partners, or (3) in
connection with a merger or other combination of the Operating Partnership, or
(4) by the sale or other disposition of all or substantially all of the assets
of the Operating Partnership, or (5) entry of a decree of judicial dissolution
of the Operating Partnership, or (6) bankruptcy or insolvency of the Company.
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FEDERAL INCOME TAX CONSEQUENCES
We intend to operate in a manner that permits us to satisfy the requirements
for taxation as a REIT under the applicable provisions of the Tax Code. We can
give no assurance, however, that such requirements will be met. The following
summarizes the federal income tax considerations for the Company and our
shareholders with respect to our treatment as a REIT. The information below, to
the extent that it constitutes matters of law, summaries of legal matters or
legal conclusions, is based on the opinion of Mayer, Brown & Platt. Mayer,
Brown & Platt has served as counsel to the Company regarding the material
federal income tax consequences relevant to purchasers of the Common Shares.
Based on the matters described below, in the opinion of Mayer, Brown &
Platt, we have been organized in conformity with the requirements for
qualification as a REIT, beginning with our taxable year ended December 31,
1998, and our actual and proposed method of operation (as we represented to
Mayer, Brown & Platt) will enable us to continue to satisfy the requirements
for such qualification. Their opinion is based on certain assumptions relating
to the organization and operation of the Company, the Operating Partnership and
the Management Company. These assumptions include: (1) that the Formation
Transactions were consummated in accordance with the operative documents
therefor, (2) that such documents accurately reflect the material facts of such
transactions, (3) that the Company, the Operating Partnership and the
Management Company will each be operated in the manner described in their
applicable organizational documents and in representations we have given to
Mayer, Brown & Platt, and (4) that all terms and provisions of such documents
will be complied with by all parties involved. Their opinion is also
conditioned upon certain representations made to them in reference to certain
factual matters relating to our organization. In addition, this opinion is
based on the law existing and in effect on this date. Our qualification and
taxation as a REIT will depend on compliance with such law existing and in
effect on this date and as the same may be later amended. Our qualification and
taxation as a REIT will further depend upon our ability to meet, on a
continuing basis through actual operating results, asset composition,
distribution levels and diversity of share ownership, the various qualification
tests imposed under the Tax Code discussed below. Counsel will not review
compliance with these tests on a continuing basis and no assurance can be given
that we will satisfy such tests on a continuing basis.
In brief, a corporation that invests primarily in real estate can claim a
tax deduction for the dividends it pays to its shareholders as long as it meets
the REIT provisions of the Tax Code described below. Such a corporation
generally is not taxed on its "REIT taxable income" to the extent such income
is currently distributed to shareholders. This substantially eliminates the
"double taxation" (i.e., at both the corporate and shareholder levels) that
generally results from an investment in a corporation. However, as discussed in
greater detail below, such an entity remains subject to tax in certain
circumstances even if it qualifies as a REIT. Further, if the entity fails to
qualify as a REIT in any year, it will not be able to deduct any portion of the
dividends it paid to its shareholders. Thus it would be subject to full federal
income taxation on its earnings, thereby significantly reducing or eliminating
the cash available for distribution to its shareholders. See "--Taxation of the
Company--General" and "--Taxation of the Company--Failure to Qualify."
Our Board of Trustees currently believes that we have operated and will
operate in a manner that permits us to elect (and that we will timely and
effectively elect) REIT status for our taxable year ended December 31, 1998 and
in each taxable year after that. There can be no assurance, however, that this
expectation will be fulfilled for the following reasons. Qualification as a
REIT depends on our continuing to satisfy the numerous asset, income and
distribution tests described below, which in turn will depend on our operating
results.
The following summary is based on the Tax Code, its legislative history,
administrative pronouncements, judicial decisions and United States Treasury
Department ("Treasury") regulations. Subsequent changes to any of these may
affect the tax consequences described here, possibly on a retroactive basis.
The following summary neither exhausts all possible tax considerations, nor
gives a detailed discussion of any state, local, or foreign tax considerations,
nor discusses all of the aspects of federal income taxation that may be
relevant to a prospective shareholder in light of his or her particular
circumstances or to certain types of shareholders
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(including insurance companies, tax-exempt entities, financial institutions,
broker- dealers, foreign corporations and persons who are not citizens or
residents of the United States) subject to special treatment under the federal
income tax laws.
Taxation of Company
General. In any year in which we qualify as a REIT, we will generally not be
subject to federal income tax on that portion of our REIT taxable income or
capital gain which is distributed to shareholders. We may, however, be subject
to tax at normal corporate rates upon any taxable income or capital gain not
distributed. Under recently enacted legislation and to the extent we elect to
retain and pay income tax on our net long-term capital gains, shareholders are
required to include their proportionate share of the Company's undistributed
long-term capital gain in income. However, they receive a credit for their
share of any taxes paid on such gain by the Company.
Notwithstanding our qualification as a REIT, we may also be subject to
taxation in certain other circumstances. If we should fail to satisfy either
the 75% or the 95% gross income test (discussed below), but maintain our
qualification as a REIT (because certain other requirements are met), we will
be subject to a 100% tax on the greater of the amount by which the Company
fails either the 75% or the 95% test, multiplied by a fraction intended to
reflect the Company's profitability. We will also be subject to a tax of 100%
on net income from any "prohibited transaction" (as described below). If we
have net income from the sale or other disposition of "foreclosure property,"
which is held primarily for sale to customers in the ordinary course of
business, or other non-qualifying income from foreclosure property, we will be
subject to tax on such income from foreclosure property at the highest
corporate rate. In addition, if we should fail to distribute during each
calendar year at least the sum of (1) 85% of our REIT ordinary income for such
year, (2) 95% of our REIT capital gain net income for such year and (3) any
undistributed taxable income from prior years, we would be subject to a 4%
excise tax on the excess of such required distribution over the amounts
actually distributed. To the extent that we elect to retain and pay income tax
on our net long-term capital gains, such retained amounts will be treated as
distributed for purposes of the 4% excise tax. We may also be subject to the
corporate alternative minimum tax, as well as to tax in certain situations not
presently contemplated. Our Management Company will be taxed on its income at
regular corporate rates. We will use the calendar year both for federal income
tax purposes, as is required of a newly organized REIT, and for financial
reporting purposes.
REIT Qualification Requirements. In order to qualify as a REIT, we must
meet, among others, the following requirements:
Share Ownership Tests. Our shares of beneficial interest (which term, in our
case, currently means the Common Shares) must be held by a minimum of 100
persons for at least 335 days in each taxable year (or a proportional number of
days in any short taxable year). In addition, at all times during the second
half of each taxable year, no more than 50% in value of our outstanding shares
of beneficial interest may be owned, directly or indirectly and including the
effects of certain constructive ownership rules, by five or fewer individuals,
which for this purpose includes certain tax-exempt entities. However, for
purposes of this test, any shares of beneficial interest held by a qualified
domestic pension or other retirement trust will be treated as held directly by
its beneficiaries in proportion to their actuarial interest in such trust
rather than by such trust. These share ownership requirements need not be met
until the second taxable year of the Company for which a REIT election is made.
As we have represented to Mayer, Brown & Platt, we have satisfied and will
continue to satisfy these requirements.
In order to attempt to ensure compliance with the foregoing share ownership
tests, we have placed certain restrictions on the ownership and transfer of the
shares of beneficial interest. This should prevent additional concentration of
stock ownership. Moreover, to show evidence of compliance with these
requirements, Treasury regulations require us to maintain records which
disclose the actual ownership of our outstanding
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shares of beneficial interest and such regulations impose penalties against us
for failing to do so. In fulfilling our obligations to maintain records, we
must and will demand written statements each year from the record holders of
designated percentages of our shares of beneficial interest. The statements
must disclose the actual owners of such shares of beneficial interest (as
prescribed by Treasury regulations). A list of those persons failing or
refusing to comply with such demand must be maintained as part of our records.
A shareholder failing or refusing to comply with the written demand must submit
with his tax return a similar statement, disclosing the actual ownership of
shares of beneficial interest and certain other information. In addition, our
Declaration of Trust provides restrictions regarding the ownership and transfer
of its shares of beneficial interest that are intended to assist us in
continuing to satisfy the share ownership requirements. See "Description of
Common Shares--Restrictions on Transfer."
Asset Tests. At the close of each quarter of our taxable year, we must
satisfy two tests, which relate to the nature of our assets (determined in
accordance with generally accepted accounting principles). First, at least 75%
of the value of our total assets must be represented by interests in real
property, interests in mortgages on real property, shares in other REITs, cash,
cash items, government securities and qualified temporary investments. Second,
although the remaining 25% of our assets generally may be invested without
restriction, securities in this class may not exceed:
(1) in the case of securities of any one non-government issuer, 5% of
the value of our total assets (the "Value Test"); or
(2) 10% of the outstanding voting securities of any one such issuer (the
"Voting Stock Test").
As we have represented to Mayer, Brown & Platt, we have and will satisfy the
75% asset test, the Value Test, and the Voting Test at the close of each
quarter of our taxable years ended 1998 and afterwards. Where we invest in a
partnership (such as the Operating Partnership), we will be deemed to own a
proportionate share of the partnership's assets. The partnership interest does
not constitute a security for purposes of these tests. See "--Tax Aspects of
the Company's Investments in Partnerships--General." Accordingly, our
investment in the properties through our interest in the Operating Partnership
is intended to constitute an investment in qualified assets for purposes of the
75% asset test.
The Operating Partnership owns 100% of the non-voting preferred stock of the
Management Company. By virtue of our partnership interest in the Operating
Partnership, we are deemed to own initially a pro rata share of such non-voting
preferred stock. Because the Operating Partnership owns none of the voting
common stock of the Management Company, and because the non-voting preferred
stock's approval right is limited to certain fundamental corporate actions that
could adversely affect the preferred stock as a class, we believe the Voting
Stock Test should be satisfied.
Based upon the analysis of the estimated value of the stock of the
Management Company (owned by the Operating Partnership) relative to the
estimated value of the total assets (owned by the Operating Partnership), we
believe that our pro rata share of the stock of the Management Company (held by
the Operating Partnership) does not exceed on the date of this prospectus 5% of
the value of our total assets. In rendering its opinion as to our qualification
as a REIT, Mayer, Brown & Platt is relying on our representations to such
effect with respect to the value of such stock and assets.
The Value Test must be satisfied at the end of any quarter in which we
increase our interest in the Management Company or acquire other property. If
any Limited Partner exercises its conversion option to exchange Units for
common shares, we will thereby increase our proportionate (indirect) ownership
interest in the Management Company. This will require us to meet the Value Test
in any quarter in which such conversion option is exercised. A similar result
will follow in the case of any exchange of Units by employees of the Operating
Partnership or the Management Company that they received pursuant to our Long
Term Incentive Plan. We plan to take steps to ensure that the Value Test is
satisfied for any quarter in which retesting is to occur. However, we cannot
give assurance that such steps will always be successful and will not require a
reduction in the Operating Partnership's overall interest in the Management
Company.
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Gross Income Tests. There are two separate percentage tests relating to the
sources of our gross income which must be satisfied for each taxable year. For
purposes of these tests, where we invest in a partnership, we will be treated
as receiving our share of the income and loss of the partnership. The gross
income of the partnership will retain the same character in our hands as it has
in the hands of the partnership. See "--Tax Aspects of the Company's
Investments in Partnerships--General" below. The two tests are separately
described below:
The 75% Test. At least 75% of our gross income for the taxable year must be
"qualifying income." Qualifying income generally includes:
(1) rents from real property (except as modified below);
(2) interest on obligations secured by mortgages on, or interests in,
real property;
(3) gains from the sale or other disposition of interests in real
property and real estate mortgages, other than gain from property
bought primarily for sale to customers in the ordinary course of
our trade or business ("dealer property");
(4) dividends or other distributions on shares in other REITs, as well
as gain from the sale of such shares;
(5) abatements and refunds of real property taxes;
(6) income from the operation, and gain from the sale, of property
acquired at or in lieu of a foreclosure of the mortgage secured by
such property ("foreclosure property"); and
(7) commitment fees received for agreeing to make loans secured by
mortgages on real property or to purchase or lease real property.
Rents received from a customer will not, however, qualify as rents from real
property in satisfying the 75% gross income test (or the 95% gross income test
described below) if we own or are deemed to own, or an owner or deemed owner of
10% or more of the Company owns, directly or constructively 10% or more of such
customer. If the portion of any 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, such portion of the rent will not qualify as
rents from real property. Moreover, an amount received or accrued will not
qualify as rents from real property (or as interest income) for the 75% and 95%
gross income tests, if it is 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 "rents from real property" solely by reason of being based
on a fixed percentage, or percentages, of receipts or sales. Finally, for rents
received to qualify as rents from real property for the 75% and 95% gross
income tests, we generally must not operate or manage the property, or furnish
or render services to customers other than through an "independent contractor"
from whom we derive no income, except that the "independent contractor"
requirement does not apply to the extent that the services provided by us are
"usually or customarily rendered" in connection with the rental of space for
occupancy only, or are not otherwise considered "rendered to the occupant for
his convenience" of the amounts received with respect to such services do not
exceed 1% of all amounts received or accrued, directly or indirectly, by us
during the taxable year with respect to such property.
We monitor our operations in the context of these standards so as to satisfy
the 75% and 95% gross income tests and have represented to Mayer, Brown & Platt
that we have and will satisfy these tests for our taxable years ended 1998 and
afterwards. The Operating Partnership provides certain services at the
properties that it owns and may provide such services at any newly acquired
properties of the Operating Partnership. We believe that for purposes of the
75% and 95% gross income tests, the services provided at such properties (and
any other services and amenities provided by the Operating Partnership or its
agents) are or will be of the type, which is usually or customarily rendered in
connection with the rental of space for occupancy only and not those rendered
to the occupant for his convenience. Mayer, Brown & Platt, in rendering its
opinion as to our qualification as a REIT, is relying on our representations to
that effect. We intend that independent contractors will perform services that
cannot be provided directly by the Operating Partnership, the Management
Company or other agents. We anticipate that the dividend income on our indirect
investment in the Management Company will not cause us to fail the 75% gross
income test.
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The 95% Test. In addition to deriving 75% of our gross income from the
sources above, at least 95% of our gross income for the taxable year must be
derived from the above-described qualifying income or from dividends, interest,
or gains from the sale or other disposition of stock or other securities that
are not dealer property. Dividends and interest on any obligations (not
collateralized by an interest in real property) are included for purposes of
the 95% test, but not for purposes of the 75% gross income test. In addition,
payments to us under an interest rate swap, cap agreement, option, futures
contract, forward rate agreement or any similar financial instrument entered
into by us to hedge our indebtedness incurred or to be incurred (and any gain
from the sale or other disposition of these instruments) are treated as
qualifying income for purposes of the 95% gross income test, but not for
purposes of the 75% gross income test. We closely monitor our non-qualifying
income and anticipate that non-qualifying income from other activities will not
result in our failing to satisfy either the 75% or 95% gross income test.
To determine whether we comply with the 75% and the 95% gross income tests,
gross income does not include income from prohibited transactions. A sale of
dealer property (excluding foreclosure property) is a "prohibited transaction",
except that a sale of property will not be a prohibited transaction if we hold
such property for at least four years, and certain other requirements (relating
to the number of properties sold in a year, their tax bases, and the cost of
improvements made thereto) are satisfied. See "--Taxation of the Company--
General" and "--Tax Aspects of the Company's Investments in Partnerships--Sale
of Properties."
We believe that, for purposes of both the 75% and the 95% gross income
tests, our investment in properties through the Operating Partnership in major
part gives rise to qualifying income in the form of rents. We also believe that
gains on sales of the properties, or of our interest in the Operating
Partnership, generally will also constitute qualifying income.
Even if we fail to satisfy one or both of the 75% and 95% gross income tests
for any taxable year, we may still qualify as a REIT for such year if we are
entitled to relief under certain provisions of the Tax Code. These relief
provisions will generally be available if:
(1) our failure to comply is due to reasonable cause and not to willful
neglect;
(2) we report the nature and amount of each item of our income included
in the tests on a schedule attached to our tax return; and
(3) any incorrect information on this schedule is not due to fraud with
intent to evade tax.
If these relief provisions apply, however, we will nonetheless be subject to a
100% tax on the greater of the amount by which it fails either the 75% or 95%
gross income test, multiplied by a fraction intended to reflect our
profitability.
Annual Distribution Requirements. In order to qualify as a REIT, we are
required to distribute dividends to our shareholders each year in an amount at
least equal to:
(1) the sum of (x) 95% of our REIT taxable income (computed without
regard to the dividends paid deduction and the Company's net capital
gain) and (y) 95% of the net income (after tax), if any, from
foreclosure property, minus
(2) the sum of certain items of non-cash income.
We must pay such distributions in the taxable year to which they relate, or in
the following taxable year, if they are declared before we timely file our tax
return for such year and if they are paid on or before the first regular
dividend payment after the declaration. To the extent that we do not distribute
all of our net capital gain or distribute at least 95%, but less than 100%, of
our REIT taxable income, as adjusted, we will be subject to tax on the
undistributed amount at regular capital gain or ordinary corporate tax rates,
as the case may be.
We intend to make timely distributions sufficient to satisfy the annual
distribution requirements, as described in the first sentence of the preceding
paragraph. We have represented to Mayer, Brown & Platt that
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we have and will satisfy these distribution requirements for our taxable years
ended 1998 and afterwards. In this regard, the Operating Partnership Agreement
authorizes us in our capacity as general partner to take such steps as may be
necessary to cause the Operating Partnership to distribute to its partners an
amount sufficient to permit us to meet the distribution requirements. It is
possible that we may not have sufficient cash or other liquid assets to meet
the 95% distribution requirement. This may be due to timing differences between
the actual receipt of income and actual payment of expenses on the one hand and
the inclusion of such income and deduction of such expense (in computing our
REIT taxable income) on the other hand. Additionally, this may be due to the
Operating Partnership's inability to control cash distributions (relating to
any properties over which it does not have decision making control), or for
other reasons. We will closely monitor the relationship between our REIT
taxable income and cash flow and, if necessary, borrow funds (or cause the
Operating Partnership or other affiliates to borrow funds) to satisfy the
distribution requirement. However, we cannot assure that such borrowing would
be available at such time.
If we fail to meet the 95% distribution requirement as a result of an
adjustment to our tax return by the Internal Revenue Service, we may
retroactively cure the failure by paying a "deficiency dividend" (plus
applicable penalties and interest) within a specified period.
Failure to Qualify. If we fail to qualify for taxation as a REIT in any
taxable year, and the relief provisions do not apply, we will be subject to tax
(including any applicable alternative minimum tax) on our taxable income at
regular corporate rates. Distributions to shareholders in any year in which we
fail to qualify as a REIT will not be deductible by us, nor will they generally
be required to be made under the Tax Code. In such event, to the extent of
current and accumulated earnings and profits, all distributions to shareholders
will be taxable as ordinary income and subject to certain limitations in the
Tax Code. Also, corporate distributees may be eligible for the dividends
received deduction. Unless entitled to relief under specific statutory
provisions, we also will be disqualified from re-electing taxation as a REIT
for the four taxable years following the year during which qualification was
lost.
Tax Aspects of Our Investments in Partnerships
General. We hold a partnership interest in the Operating Partnership. In
general, a partnership is a "pass-through" entity which is not subject to
federal income tax. Rather, partners are allocated their proportionate shares
of the items of income, gain, loss, deduction and credit of a partnership, and
are potentially subject to tax thereon, without regard to whether the partner
received a distribution from the partnership. We will include our proportionate
share of the foregoing partnership items for purposes of the various REIT gross
income tests and in the computation of our REIT taxable income. See "--Taxation
of the Company--General" and "--Gross Income Tests."
Each partner's share of a partnership's tax attributes is determined in
accordance with the partnership agreement although, the allocations will be
adjusted for tax purposes if they do not comply with the technical provisions
of Tax Code Section 704(b) and the regulations under Tax Code Section 704(b).
The Operating Partnership's allocation of tax attributes are intended to comply
with these provisions. Notwithstanding these allocation provisions, for
purposes of complying with the gross income and asset tests discussed above, we
will be deemed to own our proportionate share of each of the assets of the
partnership and will be deemed to have received a share of the income of the
Partnership based on our capital interest in the Operating Partnership.
Accordingly, any resultant increase in our REIT taxable income from our
interest in the Operating Partnership (whether or not a corresponding cash
distribution is also received from the Operating Partnership) will increase our
distribution requirements (see "--Taxation of the Company--Annual Distribution
Requirements"), but will not be subject to federal income tax in our hands
provided that we distribute an amount equal to such income to our shareholders.
Moreover, for purposes of the REIT asset tests (see "--Taxation of the
Company--Asset Tests"), we will include our proportionate share of assets held
by the Operating Partnership.
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Entity Classification. Based on our representations that the Operating
Partnership will satisfy certain conditions to avoid classification as a
"publicly traded partnership" under the Tax Code, in the opinion of Mayer,
Brown & Platt under existing federal income tax law and regulations, the
Operating Partnership will be treated for federal income tax purposes as a
partnership, and not as an association taxable as a corporation. Such opinion,
however, is not binding on the Internal Revenue Service.
Tax Allocations with Respect to the Properties. Pursuant to Section 704(c)
of the Tax Code, income, gain, loss and deductions attributable to appreciated
or depreciated property that is contributed to a partnership in exchange for an
interest in the partnership (such as certain of the properties or interests
therein) must be allocated in a manner such that the contributing partner is
charged with, or benefits from, respectively, the unrealized gain or unrealized
loss associated with the property at the time of the contribution. The amount
of such unrealized gain or unrealized loss is generally equal to the difference
between the fair market value of the contributed property at the time of
contribution, and the adjusted tax basis of such property at the time of
contribution (a "Book-Tax Difference"). Such allocations are solely for federal
income tax purposes and do not affect the book capital accounts or other
economic arrangements among the partners. The formation of the Operating
Partnership included contributions of appreciated property (including certain
of the properties or interests therein). Consequently, the Operating
Partnership Agreement requires certain allocations to be made in a manner
consistent with Section 704(c) of the Tax Code.
In general, certain of the Limited Partners as contributors of certain of
the properties or interests therein will be allocated lower amounts of
depreciation deductions for tax purposes and increased taxable income and gain
on sale by the Operating Partnership on the contributed assets (including
certain of such properties). This will tend to eliminate the Book-Tax
Difference over the life of the Operating Partnership. However, the special
allocation rules of Section 704(c) do not always entirely rectify the Book-Tax
Difference on an annual basis or with respect to a specific taxable transaction
such as a sale, and accordingly variations from normal Section 704(c)
principles may arise, which could result in the allocation of additional
taxable income to us in excess of corresponding cash proceeds in certain
circumstances.
Treasury regulations under Section 704(c) of the Tax Code provide
partnerships with a choice of several methods of accounting for Book-Tax
Differences. Such determinations could have differing timing and other effects
on us.
Properties acquired by the Operating Partnership in taxable transactions
will in general have a tax basis equal to their fair market value. Section
704(c) of the Tax Code will not apply in such cases.
Sale of Properties. Our share of any gain realized by the Operating
Partnership on the sale of any "dealer property" generally will be treated as
income from a prohibited transaction that is subject to 100% penalty tax. See
"--Taxation of the Company--General" and "--Gross Income Tests--The 95% Test."
Under existing law, whether property is dealer property is a question of fact
that depends on all the facts and circumstances with respect to the particular
transaction. We intend to hold (and, to the extent within our control, to have
any joint venture to which the Operating Partnership is a partner hold)
properties for investment with a view to long-term appreciation, to engage in
the business of acquiring, owning, operating and developing the properties, and
to make such occasional sales of our properties and other properties acquired
subsequent to the date hereof as are consistent with our investment objectives.
Based upon our investment objectives, we believe that overall, our properties
should not be considered dealer property and that the amount of income from
prohibited transactions, if any, will not be material.
Taxation of Shareholders
Taxation of Taxable Domestic Shareholders. As long as we qualify as a REIT,
distributions made to our taxable domestic shareholders out of current or
accumulated earnings and profits (and not designated as capital gain dividends)
generally will be taxed to such shareholders as ordinary dividend income and
will not be eligible for the dividends received deduction for corporations.
Distributions of net capital gain that we
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designate as capital gain dividends will be taxed to such shareholders as long-
term capital gain (to the extent they do not exceed our actual net capital gain
for the fiscal year) without regard to the period for which the shareholder has
held its shares of beneficial interest. However, corporate shareholders may be
required to treat up to 20% of capital gain dividends as ordinary income. To
the extent that we make distributions in excess of current and accumulated
earnings and profits, such distributions will be treated first as a tax-free
return of capital to the shareholder, reducing the tax basis of a shareholder's
common shares by the amount of such excess distribution (but not below zero),
with distributions in excess of the shareholder's tax basis being taxed as
capital gains (if the Common Shares are held by the shareholder as a capital
asset). See "Distribution Policy." In addition, any dividend that we declare in
October, November or December of any year, which is payable to a shareholder of
record on a specific date in any such month, shall be treated as both paid by
us and received by the shareholder on December 31 of such year as long as we
actually pay the dividend during January of the following calendar year.
Shareholders may not include our net operating losses in their individual
income tax returns. Federal income tax rules may also require that certain
minimum tax adjustments and preferences be apportioned to our shareholders.
We are permitted under the Tax Code to elect to retain and pay income tax on
our net capital gain for any taxable year. If we so elect, a shareholder must
include in income such shareholder's proportionate share of our undistributed
capital gain for the taxable year. The shareholder also will be deemed to have
paid such shareholder's proportionate share of the income tax we pay with
respect to such undistributed capital gain. Such tax would be credited against
the shareholder's tax liability and subject to normal refund procedures. In
addition, each shareholder's basis in such shareholder's shares would be
increased by the amount of undistributed capital gain (less the tax we paid)
included in the shareholder's income.
The Internal Revenue Service Restructuring and Reform Act of 1998 provides
that gain from the sale or exchange of certain investments held for more than
one year is taxed at a maximum capital gain rate of 20%. Pursuant to Internal
Revenue Service guidance, we may classify portions of our capital gain
dividends as gains eligible for the 20% capital gains rate discussed above or
as unrecaptured Tax Code Section 1250 gain taxable at a maximum rate of 25%.
In general, any loss upon a sale or exchange of Common Shares by a
shareholder who has held such Common Shares for six months or less (after
applying certain holding period rules) will be treated as a long-term capital
loss, to the extent distributions from the Company were required to be treated
by such shareholders as long-term capital gains.
Backup Withholding. We will report to our domestic shareholders and to the
Internal Revenue Service the amount of dividends paid for each calendar year,
and the amount of tax withheld, if any, with respect thereto. Under the backup
withholding rules, a shareholder may be subject to backup withholding at a rate
of 31% with respect to dividends paid unless such shareholder is a corporation
or comes within certain other exempt categories and, when required,
demonstrates this fact or provides a taxpayer identification number, certifies
as to no loss of exemption from backup withholding, and otherwise complies with
applicable requirements of the backup withholding rules. A shareholder that
does not provide us with its correct taxpayer identification number may also be
subject to penalties imposed by the Internal Revenue Service. Any amount paid
as backup withholding is available as a credit against the shareholder's income
tax liability. In addition, we may be required to withhold a portion of capital
gain distributions made to any shareholders who fail to certify their non-
foreign status to us. See "--Taxation of the Shareholders--Taxation of Foreign
Shareholders" below.
Taxation of Tax-Exempt Shareholders. The Internal Revenue Service has issued
a revenue ruling in which it held that amounts distributed by a REIT to a tax-
exempt employees' pension trust do not constitute unrelated business taxable
income ("UBTI"). Subject to the discussion below regarding a "pension-held
REIT," based upon that ruling and the statutory framework of the Tax Code,
distributions by us to a shareholder that is a tax-exempt entity should not
constitute UBTI, provided that the tax-exempt entity has not
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financed the acquisition of its shares with "acquisition indebtedness" within
the meaning of the Tax Code, that the shares are not otherwise used in an
unrelated trade or business of the tax-exempt entity, and that we, consistent
with our present intent, do not hold a residual interest in a real estate
mortgage investment conduit ("REMIC") that is an entity or arrangement that
satisfies the standards set forth in Section 860D of the Tax Code.
If any pension or other retirement trust that qualifies under Section 401(a)
of the Tax Code (a "qualified pension trust") holds more than 10% by value of
the interests in a "pension-held REIT" at any time during a taxable year, a
portion of the dividends paid to the qualified pension trust by such REIT may
constitute UBTI. For these purposes, a "pension-held REIT" is defined as a REIT
which would not have qualified as a REIT but for the provisions of the Tax Code
which look through such a qualified pension trust in determining ownership of
shares of the REIT and as to which at least one qualified pension trust holds
more than 25% by value of the interests of such REIT or one or more qualified
pension trusts (each owning more than a 10% interest by value in the REIT) hold
in the aggregate more than 50% by value of the interests in such REIT.
We do not believe we are currently a pension-held REIT. However, pension
funds hold significant amounts of Operating Partnership Units, which may,
subject to certain limitations, be exchanged for Common Shares. In addition,
pension funds may purchase Common Shares in the market. As a result, we may in
the future be deemed to constitute a pension-held REIT as a result of exchanges
of Units for Common Shares or market purchases of Common Shares by pension
funds.
Taxation of Foreign Shareholders. The rules governing United States federal
income taxation of non-resident alien individuals, foreign corporations,
foreign partnerships and other foreign shareholders (collectively, "Non-U.S.
Shareholders") are highly complex and may be affected by other considerations.
The following is only a summary of such rules. Prospective Non-U.S.
Shareholders should consult with their own tax advisors to determine the impact
of federal, state and local income tax laws with regard to an investment in our
Common Shares, including any reporting requirements.
We will qualify as a "domestically-controlled REIT" so long as less than 50%
in value of our shares of beneficial interest are held by foreign persons
(i.e., non-resident aliens, foreign corporations, partnerships, trusts and
estates). We currently anticipate that we will qualify as a domestically-
controlled REIT. Under these circumstances, gain from the sale of our Common
Shares by a foreign person should not be subject to United States taxation,
unless such gain is effectively connected with such person's United States
trade or business or, in the case of an individual foreign person, such person
is present within the United States for more than 182 days during the taxable
year. However, notwithstanding our current anticipation that we will qualify as
a domestically-controlled REIT, because our Common Shares will be publicly
traded no assurance can be given that we will so qualify.
Distributions of cash generated by our real estate operations (but not by
the sale or exchange of properties) that are paid to foreign persons generally
will be subject to United States withholding tax at a rate of 30%, unless an
applicable tax treaty reduces that tax and the foreign shareholder files with
us the required form evidencing such lower rate, or the foreign shareholder
files an Internal Revenue Service Form 4224 with us claiming that the
distribution is "effectively connected" income.
Distributions of proceeds attributable to the sale or exchange of United
States real property interests by us are subject to income and withholding
taxes pursuant to the Foreign Investment in Real Property Tax Act of 1980
("FIRPTA"), and may also be subject to branch profits tax in the hands of a
shareholder which is a foreign corporation if it is not entitled to treaty
relief or exemption. We are required by applicable Treasury regulations to
withhold 35% of any distribution to a foreign person that could be designated
as a capital gain dividend. This amount is creditable against the foreign
shareholder's FIRPTA tax liability.
60
<PAGE>
Other Tax Considerations
Management Company. The income of the Management Company will be subject to
federal and state income tax at full corporate rates. The Management Company
cannot claim a deduction for the dividends it pays to its shareholders,
including the Operating Partnership. To the extent that the Management Company
pays federal, state or local taxes, it will have less cash available to
distribute to its shareholders, thereby reducing cash available for us to
distribute to our shareholders. The Management Company will attempt to minimize
the amount of such taxes, but there can be no assurance whether or the extent
to which the measures it takes to minimize taxes will be successful.
Possible Legislative or Other Actions Affecting Tax Consequences. You should
recognize that the present federal income tax treatment of an investment in the
Company may be modified by legislative, judicial or administrative action at
any time and that any such action may affect investments and commitments
previously made. The rules dealing with federal income taxation are constantly
in review by persons involved in the legislative process and by the Internal
Revenue Service and the Treasury Department resulting in revisions of
regulations and revised interpretations of established concepts as well as
statutory changes. No assurance can be given as to the form or content
(including with respect to effective dates) of any tax legislation which may be
enacted. Revisions in federal tax laws and interpretations thereof can
adversely affect the tax consequences of your investment in our Company.
State and Local Taxes. Both the Company and our shareholders may be subject
to state or local taxation, and the Company and the Operating Partnership may
be subject to state or local tax withholding requirements in various
jurisdictions, including those in which we or they transact business or reside.
The state and local tax treatment of the Company and our shareholders may not
conform to the federal income tax consequences discussed above. Consequently,
you should consult your tax advisor regarding the effect of state and local tax
laws on an investment in Common Shares.
You should consult the applicable prospectus supplement, as well as your tax
advisor, regarding the specific tax consequences to you of the purchase,
ownership and sale of any Offered Securities, including the federal, state,
local, foreign and other tax consequences of such purchase, ownership, sale and
election and of potential changes in applicable tax laws.
PLAN OF DISTRIBUTION
The Company and the Operating Partnership may offer and sell the Offered
Securities to one or more underwriters for public offering and sale by such
underwriters or they may offer and sell the Offered Securities to investors
directly or through agents. The Company or the Operating Partnership may also
offer and sell the Offered Securities to existing securityholders of either of
them through distributions, without consideration, of rights to purchase such
securities. Such rights, if distributed, may, but will not necessarily, be
transferable in accordance with such terms as the Company or the Operating
Partnership may determine. See "Description of Securityholder Purchase Rights."
Any such underwriter or agent involved in the offer and sale of the Offered
Securities will be named in the applicable prospectus supplement.
The distribution of the Offered Securities may be effected from time to time
in one or more transactions at fixed prices, which may be changed, or at prices
related to the prevailing market prices at the time of sale or at negotiated
prices (any of which may represent a discount from the prevailing market
prices). The Offered Securities may also be offered in exchange for one or more
of the classes of outstanding securities of the Company or the Operating
Partnership. The Company and the Operating Partnership may, from time to time,
authorize underwriters acting as their agents to offer and sell the Offered
Securities upon the terms and conditions set forth in the applicable prospectus
supplement. In connection with the sale of Offered Securities, underwriters may
receive compensation from the Company or the Operating Partnership in the form
of underwriting discounts or commissions and may also receive commissions from
purchasers of Offered
61
<PAGE>
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 and the Operating
Partnership 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. 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 and the Operating Partnership,
to indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act.
If so indicated in the applicable prospectus supplement, the Company and the
Operating Partnership will authorize dealers acting as their agents to solicit
offers by certain institutions to purchase Offered Securities from the Company
and the Operating 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
will 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
and the Operating Partnership. Contracts will not be subject to any conditions
except that 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
if the Offered Securities are being sold to underwriters, the Company and the
Operating Partnership shall have sold to such underwriters the total principal
amount of the Offered Securities less the principal amount thereof covered by
the Contracts.
Certain of the underwriters and their affiliates engage in transactions with
or perform services for the Company and the Operating Partnership in the
ordinary course of business.
LEGAL MATTERS
The validity of the Offered Securities will be passed upon for the Company
and the Operating Partnership by Mayer, Brown & Platt, and the validity of the
Common Shares, Preferred Shares, Depositary Shares and Warrants under Maryland
law will also be passed upon for us by Ballard Spahr Andrews & Ingersoll, LLP.
Mayer, Brown & Platt will rely upon the opinion of Ballard Spahr Andrews &
Ingersoll, LLP, as to certain matters of Maryland law. The description of
federal income tax consequences contained in this prospectus under the heading
"Federal Income Tax Considerations" is based upon the opinion of Mayer, Brown &
Platt.
62
<PAGE>
EXPERTS
The audited financial statements and schedules (if applicable) of Cabot
Industrial Trust, Cabot Industrial Properties, L.P., Cabot Partners Limited
Partnership, Existing Investors Property Group, Knickerbocker Properties, Inc.
II, Prudential Properties Group, West Coast Industrial, LLC, The 4B's, Seefried
Properties Group, Prudential Properties Group II, DFW Trade Center I, L.P.,
Buildings 1, 2 and 3, 1055 Dornoch Court, San Diego, CA, Hampden I and II
Properties Group, South Royal Associates Properties Group, Joseph A. Leroy
Family LP Property, Raco/Melaver, L.L.C., TLI/Cahill Partnership--Spiral Drive,
Terraden/Ontario, I L.P., Kojo Building Property Group, Everest Investments
Limited Partnership Property Group, The Phoenix Group, Arizona Property and
Hemmer Properties Group included or incorporated by reference in this
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as of and for the periods indicated in their reports and
are included or incorporated by reference herein in reliance upon the authority
of that firm as experts in accounting and auditing in giving said reports.
The financial statements and related schedule of Pennsylvania Public School
Employes' Retirement System Industrial Properties Portfolio incorporated by
reference in this prospectus have been audited by KPMG LLP, independent
certified public accountants, to the extent and for the periods indicated in
their report thereon also incorporated herein by reference. Such financial
statements and related schedule have been incorporated by reference herein in
reliance upon such report given upon the authority of that firm as experts in
accounting and auditing.
The historical cost basis combined statements of assets and liabilities of
Orlando Central Park and 500 Memorial Drive as of December 31, 1997 and 1996
and the related historical cost basis combined statements of income, changes in
net assets, and cash flows for each of the three years in the period ended
December 31, 1997, incorporated by reference in this prospectus, have been
incorporated by reference herein in reliance on the report of
PricewaterhouseCoopers LLP, independent auditors, given on the authority of
that firm as experts in accounting and auditing.
The historical cost basis balance sheet of Knickerbocker Properties, Inc. II
as of December 31, 1996 and the related historical cost basis statements of
operations, stockholder's equity and cash flows for each of the two years in
the period ended December 31, 1996 incorporated by reference in this
prospectus, have been incorporated by reference herein in reliance on the
report of PricewaterhouseCoopers LLP, independent auditors, given on the
authority of that firm as experts in accounting and auditing.
[The following pages 63 through 66 and F-1 through F-15 are alternate pages to
be included in the prospectus if securities of the Operating Partnership are
offered.]
INFORMATION CONCERNING THE OPERATING PARTNERSHIP
Substantially all of the Company's assets and interests in industrial
properties and other assets are held by, and substantially all of its
operations are conducted through, the Operating Partnership. Accordingly, the
business of the Operating Partnership, the properties owned by the Operating
Partnership and the management of the Operating Partnership and their
compensation are substantially the same as those included in "Item 1.
Business," "Item 2. Properties," "Item 10. "Directors and Executive Officers of
the Registrant," and "Item 11. "Executive Compensation" in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997, which Form 10-K has
been incorporated by reference into this prospectus.
The address of the Operating Partnership is the same as that for the
Company: Two Center Plaza, Suite 200, Boston, MA, 02108, and its telephone
number is (617) 723-0900.
63
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF OPERATING PARTNERSHIP
The statements contained in this discussion and elsewhere in this report
that are not historical facts are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. For a description of the limitations and other
considerations with respect to such forward-looking statements, see "Forward-
Looking Statements." The Operating Partnership's operating results depend
primarily on income from industrial properties, which may be affected by
various factors, including changes in national and local economic conditions,
competitive market conditions, uncertainties and costs related to and the
imposition of conditions on receipt of governmental approvals and costs of
material and labor, all of which may cause actual results to differ materially
from what is expressed herein. Capital and credit market conditions which
affect the Operating Partnership's cost of capital also influence its operating
results.
General
The following discussions should be read in conjunction with the financial
statements and notes appearing or incorporated by reference elsewhere herein.
The Operating Partnership is an internally managed, fully integrated real
estate company, focused on serving a variety of industrial space users in the
country's principal commercial markets. The Operating Partnership owns and
operates a diversified portfolio of bulk distribution, multitenant distribution
and "workspace" (light assembly and flex/R & D) properties throughout the
United States. At September 30, 1998 the Operating Partnership owned 202
properties, 122 of which properties were acquired in connection with the
Formation Transactions described in Note 2 to the consolidated financial
statements herein, and 80 of which properties were acquired during the period
from February 4, 1998 through September 30, 1998 (21 of the 80 properties were
identified in the prospectus for the Company's initial public offering dated
January 30, 1998). The Operating Partnership was formed on October 10, 1997,
but did not begin operations until the completion of the Formation Transactions
on February 4, 1998, the date of the Company's initial public offering.
Results of Operations
Since the Operating Partnership was formed in October 1997 and did not begin
operations until February 4, 1998, the results for the nine months ended
September 30, 1998 represent activity for 239 days (or approximately 8 months),
and no comparison of results to prior periods are available.
Three Months Ended September 30, 1998
Net income attributable to Unitholders for the quarter ended September 30,
1998 totaled $14.1 million, or $.32 per Unit.
Rental revenues for the quarter ended September 30, 1998 were $28.4 million,
including tenant reimbursements of $3.5 million. Total rental revenue of $20.4
million was generated by the 122 properties (the "Baseline Properties") owned
as of February 4, 1998 as a result of the Formation Transactions and
$8.0 million was generated by the 80 properties acquired after February 4,
1998. The ratio of tenant reimbursements to property operating and real estate
tax expenses for the quarter was approximately 73%. Depreciation and
amortization related to real estate investments for the quarter totaled $5.9
million.
Interest and other income of $392,000 consisted primarily of interest earned
on the Operating Partnership's invested cash balances and earnings of the
Management Company of $173,000. Interest expense represents interest incurred
on $48.6 million of mortgage indebtedness outstanding at September 30, 1998 and
interest on outstanding borrowings under the Acquisition Facility, net of
interest capitalized to development projects.
64
<PAGE>
Nine Months Ended September 30, 1998
Net income attributable to Unitholders for the nine months ended September
30, 1998 totaled $36.4 million, or $.83 per Unit on a diluted basis.
Rental revenues for the nine months were $69.3 million, including tenant
reimbursements of $8.7 million. Total rental revenue of $53.6 million was
generated by the Baseline Properties and $15.7 million was generated by the 80
properties acquired after February 4, 1998. The ratio of tenant reimbursements
to operating and real estate tax expenses was approximately 72%. Depreciation
and amortization related to real estate investments totaled $14.1 million.
Interest and other income for the nine months included $333,000 of earnings
from the Management Company. The remainder consisted primarily of interest
income earned on the Operating Partnership's invested cash balances. Interest
expense represented $1.0 million of interest incurred on $48.6 million of
mortgage indebtedness outstanding and also included interest expense of $2.3
million related to borrowings under the Acquisition Facility, net of amounts
capitalized to development projects.
Liquidity and Capital Resources
As a result of the completion of the Company's initial public offering in
February 1998, the Company issued 8,625,000 Common Shares to the public and
1,000,000 Common Shares in a private offering. All of the Common Shares were
sold at a price of $20.00 per share. The proceeds from these offerings, net of
offering costs, were $176.7 million, and were contributed to the Operating
Partnership.
The Operating Partnership intends to rely on cash provided by operations,
unsecured and secured borrowings from institutional sources and public debt as
its primary sources of funding for acquisition, development, expansion and
renovation of properties. The Operating Partnership may also consider equity
financing when such financing is available on attractive terms. In March 1998
the Operating Partnership executed a $325 million unsecured revolving line of
credit (the "Acquisition Facility") with Morgan Guaranty Trust Company of New
York as lead agent to a syndicate of banks. The Acquisition Facility will be
used to fund property acquisitions, development activities, building
expansions, tenant leasing costs and other general business purposes. The
Acquisition Facility contains certain restrictions and requirements, such as
total debt-to-assets, debt service coverage, and minimum unencumbered assets to
unsecured debt ratios, and other operating limitations. The Operating
Partnership believes cash flow from operations not distributed to Unitholders
will be sufficient to cover tenant allowances and costs associated with renewal
or replacement of current tenants as their leases expire and recurring non-
incremental revenue generating capital expenditures.
In the normal course of operations through November 12, 1998, the Operating
Partnership has purchased approximately $12 million of real estate assets since
September 30, 1998. The real estate assets acquired were primarily funded
through Acquisition Facility borrowings.
As of September 30, 1998, the Operating Partnership had $48.6 million of
fixed rate debt secured by properties, $169.0 million of unsecured borrowings
under its Acquisition Facility and a 19% debt-to-total market capitalization
ratio. The debt-to-total market capitalization ratio is calculated based on the
Operating Partnership's total consolidated debt as a percentage of the market
value of outstanding Units of the Operating Partnership (which is based on the
market price of the Common Shares into which the Units are convertible) plus
total debt.
The Operating Partnership has entered into an interest rate collar
arrangement, having a notional amount of $65 million, relating to its LIBOR-
based Acquisition Facility for the period August 1, 1998 through December 31,
1998. The arrangement is intended to have the effect of limiting the LIBOR
component of the Operating Partnership's interest rate on an equivalent amount
of borrowings to the range of 5.64% to 5.9% per annum. The Operating
Partnership has also entered into an interest rate hedge transaction involving
the notional
65
<PAGE>
future sale of $100 million of Treasury Securities based on a rate of 5.541%
for such securities in anticipation of a future debt issuance with a maturity
of 10 years. Based on the rate for 10-year Treasury Securities as of close of
business on November 12, 1998, the hedge transaction would have the effect of
increasing the Operating Partnership's borrowing rate on $100 million of
anticipated borrowings by approximately .5%.
Liquidity
Cash and cash equivalents totaled $4.9 million at September 30, 1998. Cash
provided by operating activities for the nine months ended September 30, 1998
was $61.5 million.
Information Systems and Year 2000 Compliance
The Operating Partnership has assessed its Year 2000 readiness with respect
to its internal accounting and information systems. The Operating Partnership
also has contacted its significant vendors, including banks and software
providers, to determine whether such vendors are satisfactorily addressing the
Year 2000 problem with respect to the products and services they provide the
Operating Partnership. Based on the Operating Partnership's review, no
significant issues or costs of remediation were identified with respect to such
systems or vendors. The Operating Partnership is in the process of identifying
Year 2000 issues related to other internal systems (primarily property related
equipment with date-sensitive controls). No significant issues have been
identified with respect to such systems. The Operating Partnership has
completed its review of these other internal systems and has developed a Year
2000 remedial plan to address issues identified in such review. Remediation
costs to date have been immaterial, and the Operating Partnership does not
expect any significant issues or remediation costs as a result of completion of
this plan due to the nature of its real estate assets (industrial properties)
and the general nature of its leases, which in many instances provide for the
pass through of costs to its tenants. Although the Operating Partnership
believes that there will be no direct material effects on its operating
performance or results of operations from the Year 2000 problem as it relates
to the Operating Partnership's internal systems and significant vendors, it is
not possible to quantify any potential indirect effects that may result from
the lack of Year 2000 readiness on the part of other third parties, including
tenants, with whom the Operating Partnership conducts its business.
Seasonality
Management does not expect seasonality to materially affect distributions to
Unitholders. The Operating Partnership believes that its geographic diversity,
tenant mix, and rental and expense structures provide adequate protection
against significant fluctuations in cash flows and net income due to
seasonality.
66
<PAGE>
INDEX TO FINANCIAL STATEMENTS
CABOT INDUSTRIAL PROPERTIES, L.P.
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Consolidated Balance Sheet as of September 30, 1998 (unaudited).......... F-2
Consolidated Statement of Operations for the Nine Months Ended September
30, 1998 (unaudited).................................................... F-3
Consolidated Statement of Operations for the Three Months Ended September
30, 1998 (unaudited).................................................... F-4
Consolidated Statement of Cash Flows for the Nine Months Ended September
30, 1998 (unaudited).................................................... F-5
Notes to Consolidated Financial Statements............................... F-6
Report of Independent Public Accountants................................. F-11
Balance Sheet as of December 31, 1997.................................... F-12
Notes to Balance Sheet................................................... F-13
</TABLE>
F-1
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
CONSOLIDATED BALANCE SHEET
(in thousands)
<TABLE>
<CAPTION>
September 30,
1998
-------------
(unaudited)
<S> <C>
ASSETS:
-------
INVESTMENT IN REAL ESTATE:
Rental Properties................................................. $1,051,650
Less: Accumulated Depreciation.................................... (11,836)
Properties under Development...................................... 11,522
----------
$1,051,336
----------
OTHER ASSETS:
Cash and Cash Equivalents......................................... $ 4,864
Rents and Other Receivables....................................... 1,159
Deferred Rent Receivable.......................................... 1,738
Deferred Lease Acquisition Costs, Net............................. 15,435
Deferred Financing Costs, Net..................................... 1,360
Due from Related Party............................................ 121
Other Assets...................................................... 1,624
----------
TOTAL ASSETS...................................................... $1,077,637
==========
LIABILITIES AND PARTNERS' EQUITY:
---------------------------------
LIABILITIES:
Mortgage Debt..................................................... $ 48,648
Line of Credit Borrowings......................................... 169,000
Accounts Payable.................................................. 658
Distributions Payable............................................. 14,143
Accrued Real Estate Taxes......................................... 7,924
Other Liabilities................................................. 19,520
----------
TOTAL LIABILITIES................................................. $ 259,893
----------
TOTAL PARTNERS' EQUITY............................................ $ 817,744
----------
TOTAL LIABILITIES AND PARTNERS' EQUITY............................ $1,077,637
==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-2
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per unit data)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1998
-----------------
(unaudited)
<S> <C>
REVENUES:
Rental Income................................................. $60,569
Tenant Reimbursements......................................... 8,740
-------
69,309
EXPENSES:
Property Operating............................................ 4,079
Property Taxes................................................ 7,982
Depreciation and Amortization................................. 14,108
General and Administrative.................................... 4,514
Interest...................................................... 3,317
-------
Total Expenses............................................ 34,000
Interest and Other Income..................................... 1,114
-------
Net Income.................................................... $36,423
=======
Earnings per Unit:
Basic....................................................... $ 0.84
=======
Diluted..................................................... $ 0.83
=======
Weighted Average Units:
Basic....................................................... 43,490
=======
Diluted..................................................... 43,706
=======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-3
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per unit data)
<TABLE>
<CAPTION>
Three Months Ended
September 30, 1998
------------------
(unaudited)
<S> <C>
REVENUES:
Rental Income................................................ $24,914
Tenant Reimbursements........................................ 3,503
-------
28,417
EXPENSES:
Property Operating........................................... 1,563
Property Taxes............................................... 3,240
Depreciation and Amortization................................ 5,862
General and Administrative................................... 1,724
Interest..................................................... 2,365
-------
Total Expenses........................................... 14,754
Interest and Other Income.................................... 392
-------
Net Income................................................... $14,055
=======
Earnings per Unit:
Basic...................................................... $ 0.32
=======
Diluted.................................................... $ 0.32
=======
Weighted Average Units:
Basic...................................................... 43,515
=======
Diluted.................................................... 43,516
=======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-4
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1998
-----------------
(unaudited)
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income................................................... $ 36,423
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation and Amortization............................ 14,108
Straight Line Rent Adjustment............................ (1,738)
Amortization of Deferred Financing Costs................. 308
Increase in Rents and Other Receivables.................. (1,159)
Increase in Accounts Payable............................. 494
Increase in Other Assets................................. (1,692)
Increase in Accrued Real Estate Taxes.................... 7,924
Increase in Other Liabilities............................ 6,812
---------
Net Cash Provided by Operating Activities.................... 61,480
---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and Lease Acquisition Costs......................... (362,921)
Improvements to Property..................................... (973)
---------
Net Cash Used in Investing Activities........................ (363,894)
---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in Deferred Financing Costs......................... (1,668)
Debt Principal Repayments.................................... (13,790)
Line of Credit Advances, net................................. 169,000
Proceeds from the Issuance of Units, net..................... 177,885
Repurchase of Partnership Units.............................. (1,217)
Distributions paid to Unitholders............................ (22,933)
---------
Net Cash Provided by Financing Activities.................... 307,277
---------
Net Increase in Cash and Cash Equivalents.................... 4,863
---------
CASH AND CASH EQUIVALENTS--BEGINNING OF PERIOD............... 1
---------
CASH AND CASH EQUIVALENTS--END OF PERIOD..................... $ 4,864
=========
Cash paid for interest, net of amounts capitalized .......... $ 1,242
=========
</TABLE>
DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
In conjunction with the Offerings and the Formation Transactions, the
Operating Partnership assumed $18,413 of indebtedness and issued 33,850
Partnership Units in exchange for real estate assets and the advisory business
of Cabot Partners valued at $659,072 and $77, respectively.
In conjunction with the acquisition of certain real estate, the Operating
Partnership assumed $44,025 of indebtedness and issued Units valued at $2,268.
At September 30, 1998, accrued capital expenditures (including amounts
included in accounts payable) totaled $11,597 and accrued offering costs
totaled $1,224.
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1998
(in thousands, except square footage, and per unit data)
1. General
Consolidated Financial Statements
The accompanying unaudited consolidated condensed financial statements of
Cabot Industrial Properties, L.P. (the "Operating Partnership") should be read
in conjunction with the 1997 audited financial statements of the Operating
Partnership. These consolidated condensed statements have been prepared in
accordance with the instructions of the Securities and Exchange Commission for
Form 10-Q and do not include all the information and footnotes required by
generally accepted accounting principles for complete financial statements.
In the opinion of the Operating Partnership's management, all material
adjustments (consisting solely of items of a normal, recurring nature)
considered necessary for a fair presentation of results of operations for the
interim period have been included. The results of consolidated operations for
the period from January 1, 1998 through September 30, 1998 are not necessarily
indicative of the results that may be expected for the period from January 1,
1998 through December 31, 1998.
Organization
The Operating Partnership, a Delaware limited partnership, was formed on
October 10, 1997. The general partner of the Operating Partnership is Cabot
Industrial Trust (the Company), a Maryland real estate investment trust which
was also formed on October 10, 1997. As the general partner of the Operating
Partnership, the Company has the exclusive power under the agreement of limited
partnership to manage and conduct the business of the Operating Partnership.
The Company is a fully integrated, internally managed real estate company
formed to continue and expand the national real estate business of Cabot
Partners Limited Partnership (Cabot Partners). The Company expects to qualify
as a real estate investment trust (a REIT) for federal income tax purposes.
Since the Operating Partnership was formed on October 10, 1997 and did not
begin operations until February 4, 1998 (see note 2), the results for the nine
months ended September 30, 1998 represent activity for 239 days, or
approximately 8 months.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash Equivalents
The Operating Partnership considers all short-term investments with an
original maturity of three months or less to be cash equivalents.
Rental Income
All leases are classified as operating leases. Certain leases provide for
tenant occupancy during periods for which no rent is due and minimum rent
payments that increase during the term of the lease. The Operating
F-6
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
Partnership records rental income for the full term of each lease on a
straight-line basis. The resulting Deferred Rent represents the receivables
from tenants, net of reserves, which the Operating Partnership expects to
collect over the remaining life of the leases rather than currently. Deferred
Rent is not recognized for income tax purposes until received.
2. The Formation Transactions, The Offerings and Ownership
The Formation Transactions
On February 4, 1998, under a Contribution Agreement executed by the Company,
the Operating Partnership, Cabot Partners, and various other contributors, 122
real estate properties, certain real estate advisory contracts and other assets
were (i) contributed to the Operating Partnership in exchange for Units in the
Operating Partnership that may, subject to certain restrictions, be exchanged
for common shares of the Company or (ii) contributed to the Company in exchange
for common shares. The properties contributed to the Company were contributed
to the Operating Partnership in exchange for the number of general partnership
Units in the Operating Partnership equal to the number of common shares
exchanged for the property.
The Operating Partnership contributed the real estate advisory contracts to
Cabot Advisors, Inc. (the Management Company) and received 100% of the non-
voting preferred stock of the Management Company, which entitles it to 95% of
the Management Company's net operating cash flow. All of the common stock of
the Management Company is owned by an officer of the Company.
At September 30, 1998, the Company owned 42.7% of the Operating Partnership.
The Offerings
On February 4, 1998, the Company completed the offering of 8,625,000 common
shares of beneficial interest (Common Shares) at an offering price of $20.00
per share. In addition, the Company issued 1,000,000 Common Shares to a single
investor in a private offering at $20.00 per share (collectively, the
Offerings). The Company contributed the net proceeds of the Offerings to the
Operating Partnership in exchange for the number of general partnership
interests in the Operating Partnership equal to the number of Common Shares
sold in the Offerings.
Distributions
On April 8, 1998 the Company and the Operating Partnership declared
distributions payable on April 30, 1998 to Shareholders or Unitholders of
record as of April 22, 1998, of $.202 per Share/Unit; on June 11, 1998 the
Company and the Operating Partnership declared distributions payable on July
30, 1998 to Shareholders or Unitholders of record as of July 10, 1998, of $.325
per Share/Unit and on September 10, 1998 the Company and the Operating
Partnership declared distributions payable on October 28, 1998 to Shareholders
or Unitholders of record as of October 9, 1998, of $.325 per Share/Unit.
F-7
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
3. Investment in Real Estate
In accordance with generally accepted accounting principles, the Operating
Partnership has accounted for the Formation Transactions using the purchase
method of accounting. As such, the assets and liabilities acquired in
connection with the Formation Transactions are recorded at the fair value of
the consideration surrendered and liabilities assumed, except for the net
assets contributed by Cabot Partners, the sponsor and organizer, which were
recorded at carryover historical cost basis. The acquisition cost was then
allocated to all identifiable assets based upon their individual estimated fair
market values. The following is a summary of the acquisition cost recorded in
connection with the Formation Transactions:
<TABLE>
<S> <C>
Fair value of the Company's Common Shares and the Operating
Partnership's Units, based on the February 4, 1998 value of $20
per Share/Unit, issued to the Contributing Investors (except
Cabot Partners).................................................. $640,608
Value of Partnership Units issued to Cabot Partners, recorded at
carryover historical cost basis.................................. 77
Mortgage debt assumed............................................. 18,413
Other acquisition costs and liabilities assumed................... 8,713
--------
Acquisition cost basis............................................ $667,811
========
Acquisition cost basis allocated to:
Land............................................................ $125,850
Buildings....................................................... 529,498
Lease Acquisition Costs......................................... 12,412
--------
Acquisition cost basis allocated to Real Estate as a result of the
Formation Transactions........................................... $667,760
Acquisition cost basis allocated to Other Net Assets.............. 51
--------
Total cost basis allocated........................................ $667,811
========
</TABLE>
Investments in real estate are depreciated over 40 years using the straight-
line method. Expenditures for ordinary maintenance and repairs are charged to
operations as incurred. Significant building renovations and improvements that
improve or extend the useful life of the assets are capitalized. Tenant
improvements and leasing commissions are capitalized and amortized on the
straight-line method over the terms of the related lease.
F-8
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
4. Property Acquisitions
During the period from July 1, through September 30, 1998 the Operating
Partnership acquired the following industrial properties:
<TABLE>
<CAPTION>
Property Location Property Type Square Feet Acquisition Cost
- ----------------- ------------------------ ----------- ----------------
<S> <C> <C> <C>
Bensenville, IL........... Workspace 76,737 $ 4,769
Orlando, FL............... Multitenant Distribution 115,728 3,572
Baltimore, MD............. Workspace 96,686 23,513
Workspace 73,071
Workspace 49,100
Workspace 39,041
Workspace 47,434
Workspace 61,320
Jessup, MD................ Multitenant Distribution 94,381 4,948
Batavia, IL............... Bulk Distribution 170,462 7,122
City of Industry, CA...... Bulk Distribution 181,635 8,865
Atlanta, GA............... Multitenant Distribution 216,074 8,565
Multitenant Distribution 130,722
Atlanta, GA............... Multitenant Distribution 161,965 4,045
Erlanger, KY.............. Workspace 67,749 4,569
Phoenix, AZ............... Multitenant Distribution 159,450 36,005
Multitenant Distribution 126,701
Multitenant Distribution 126,701
Bulk Distribution 223,740
Multitenant Distribution 161,230
Bulk Distribution 114,871
Multitenant Distribution 127,680
Tempe, AZ................. Workspace 30,606 5,643
Workspace 30,606
Workspace 30,606
Workspace 30,606
Tempe, AZ................. Workspace 54,900 4,083
St. Charles, IL........... Multitenant Distribution 81,110 3,148
Chino, CA................. Multitenant Distribution 88,134 15,565
Rancho Cucamonga, CA...... Multitenant Distribution 104,600
Corona, CA................ Multitenant Distribution 162,900
--------- --------
3,236,546 $134,412
========= ========
</TABLE>
F-9
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
5. Earnings per Unit
In accordance with Statement of Financial Accounting Standards No. 128,
"Earnings per Share", basic earnings per unit have been computed by dividing
net income by the weighted average number of units outstanding during the
period. Diluted earnings per unit have been computed considering the dilutive
effect of the exercise of Unit options granted by the Operating Partnership.
Basic and diluted earnings per unit were calculated as follows:
<TABLE>
<CAPTION>
Nine months ended Three months ended
September 30, 1998 September 30, 1998
------------------ ------------------
<S> <C> <C>
Basic:
Net Income.............................. $36,423 $14,055
------- -------
Weighted Average Units.................. 43,490 43,515
------- -------
Basic Earnings per Unit................. $ .84 $ .32
======= =======
Diluted:
Net Income.............................. $36,423 $14,005
------- -------
Income available to Unitholders......... $36,423 $14,005
------- -------
Weighted Average Units, including
incremental shares from Unit options... 43,706 43,516
------- -------
Diluted Earnings per Unit............... $ .83 $ .32
======= =======
</TABLE>
F-10
<PAGE>
Report of Independent Public Accountants
To the Partners of Cabot Industrial Properties, L.P.:
We have audited the accompanying balance sheet of Cabot Industrial
Properties, L.P. (the Operating Partnership), a Delaware limited partnership,
as of December 31, 1997. This balance sheet is the responsibility of the
Operating Partnership's management. Our responsibility is to express an opinion
on this balance sheet based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet presentation. We
believe that our audit of the balance sheet provides a reasonable basis for our
opinion.
In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of Cabot Industrial Properties, L.P.
as of December 31, 1997, in conformity with generally accepted accounting
principles.
Arthur Andersen LLP
Boston, Massachusetts
March 27, 1998
F-11
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
BALANCE SHEET
<TABLE>
<CAPTION>
December 31,
1997
------------
<S> <C>
ASSETS
------
Cash............................................................... $ 1,000
Deferred offering and acquisition costs............................ 3,480,000
----------
Total Assets....................................................... $3,481,000
==========
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
Accounts payable................................................... $2,255,000
Due to related party............................................... 1,225,000
----------
Total Liabilities.................................................. $3,480,000
----------
Commitments (Note 4)
Partners' Equity................................................... 1,000
----------
Total Liabilities and Partners' Equity............................. $3,481,000
==========
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-12
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO BALANCE SHEET
1. Organization
Cabot Industrial Properties, L.P. (the Operating Partnership), a Delaware
limited partnership, was formed on October 10, 1997. The general partner of the
Operating Partnership is Cabot Industrial Trust (the Company), a Maryland real
estate investment trust which was also formed on October 10, 1997. As the
general partner of the Operating Partnership, the Company has the exclusive
power under the agreement of limited partnership to manage and conduct the
business of the Operating Partnership. The Company is a fully integrated,
internally managed real estate company formed to continue and expand the
national real estate business of Cabot Partners Limited Partnership. The
Company expects to qualify as a real estate investment trust (a REIT) for
federal income tax purposes.
The Company and the Operating Partnership have had no operations from
inception through December 31, 1997.
2. The Formation Transactions, The Offerings and the Acquisition Facility
The Formation Transactions
On February 4, 1998, under a Contribution Agreement executed by the Company,
the Operating Partnership, Cabot Partners, L.P. and various other contributors,
122 real estate properties, real estate advisory contracts and other assets
were i) contributed to the Operating Partnership in exchange for Units in the
Operating Partnership that may, subject to certain restrictions, be exchanged
for common shares of the Company or ii) contributed to the Company in exchange
for common shares. The properties contributed to the Company were contributed
to the Operating Partnership in exchange for the number of general partnership
Units in the Operating Partnership equal to the number of common shares
exchanged for the property.
The Operating Partnership contributed the real estate investment advisory
contracts to Cabot Advisors, Inc. (the Management Company) and received 100% of
the non-voting preferred stock of the Management Company, which entitles it to
95% of the Management Company's net operating cash flow. All of the common
stock of the Management Company is owned by an officer of the Company.
The Offerings
On February 4, 1998, the Company completed the offering of 8,625,000 common
shares of beneficial interest (Common Shares) at an offering price of $20.00
per share. In addition, the Company issued 1,000,000 Common Shares to a single
investor in a private offering at $20.00 per share (collectively, the
Offerings). The Company contributed the net proceeds of the Offerings to the
Operating Partnership in exchange for the number of general partnership
interests in the Operating Partnership equal to the number of Common Shares
sold in the Offerings.
As of December 31, 1997, the Operating Partnership has incurred costs
related to the Formation Transactions and the Offerings totaling $3.5 million.
Approximately $1.2 million of these costs are payable to Cabot Partners, L.P.
as direct reimbursement for costs paid to third parties relating to the
transactions.
The Acquisition Facility
On March 16, 1998, the Operating Partnership entered into a $325 million
unsecured revolving line of credit (the Acquisition Facility). The Acquisition
Facility matures on March 16, 2001. The interest rate ranges from LIBOR plus 75
basis points to LIBOR plus 125 basis points depending on the Operating
Partnership's loan-to-value ratio. The Acquisition Facility is intended to be
used to acquire and develop properties and for working capital purposes.
F-13
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO BALANCE SHEET--(Continued)
3. Income Taxes
No provision for federal and state income taxes has been recorded relating
to the Operating Partnership, as the partners report their respective shares of
the net taxable income on their individual tax returns.
The Company intends to make an election to be taxed as a REIT under Sections
856 through 860 of the Internal Revenue Code of 1986, as amended (the Code). As
a REIT, the Company generally will not be subject to federal income tax if it
distributes at least 95% of its taxable income for each tax year to its
shareholders. REITs are subject to a number of organizational and operational
requirements. If the Company fails to qualify as a REIT in any taxable year,
the Company will be subject to federal income tax (including any applicable
alternative minimum tax) on its taxable income at regular corporate tax rates.
Even if the Company qualifies for taxation as a REIT, the Company may be
subject to state and local income taxes and to federal income tax and excise
tax on its undistributed income and certain other items.
4. Commitments
Subsequent to December 31, 1997, the Operating Partnership acquired the
following industrial properties with proceeds from the Offerings:
<TABLE>
<CAPTION>
Property Location Building Type Square Feet Acquisition Cost
- ----------------- ------------- ----------- ----------------
(000's)
<S> <C> <C> <C>
Grapevine, TX.......... Bulk Distribution/Workspace 1,182,361 $ 52,207
Mira Loma, CA, Dacula,
GA,
Mechanicsburg, PA..... Bulk Distribution 916,603 34,621
Mechanicsburg, PA...... Bulk Distribution 494,400 17,102
San Diego, CA.......... Bulk Distribution 220,000 10,905
Orlando, FL............ Workspace Properties 213,430 11,027
Tucker, GA............. Workspace Properties 134,163 5,560
Atlanta, GA............ Workspace Properties 128,000 5,370
Florence, KY........... Workspace Properties 61,555 4,050
Tempe, AZ.............. Workspace Properties 81,817 3,295
Phoenix, AZ............ Multitenant Distribution 144,602 4,035
Tolleson, AZ........... Bulk Distribution 278,142 6,730
--------- --------
Total square
feet/acquisition
cost.............. 3,855,073 154,902
=========
Less: Debt assumed..... 8,392
--------
Proceeds used to fund
acquisitions.......... $146,510
========
</TABLE>
As of March 24, 1998, the Operating Partnership has entered into separate
agreements to acquire four additional properties with an estimated total
acquisition cost of $39.8 million. The acquisitions are expected to close
within 30 days.
5. Long Term Incentive Plan
The Company has adopted the Cabot Industrial Trust Long Term Incentive Plan
(the Plan) for the purpose of attracting and retaining highly qualified
executive officers, Trustees and employees. The Plan will be administered by
the Compensation Committee of the Board of Trustees, except that the Board of
Directors of the Management Company or a committee thereof will select those
employees of the Management Company who are eligible for awards under the Plan
(in either case, the Administrator). Officers and other employees of
F-14
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO BALANCE SHEET--(Continued)
the Company, the Operating Partnership and designated subsidiaries and members
of the Board of Trustees who are not employees of the Company will also be
eligible to participate.
Options will be awarded to Trustees or employees of the Company in the form
of Common Shares and to employees of the Operating Partnership or the
Management Company in the form of Units. The Plan currently authorizes the
issuance of up to 4,347,500 Common Shares and Units. The number of Common
Shares and Units available may increase each January 1 to an amount equal to
10% of the aggregate number of outstanding Common Shares and Units on such
date. The Plan provides for the grant of (i) Common Share options intended to
qualify as incentive options under Section 422 of the Code, (ii) Common Share
options and Unit options not intended to qualify as incentive options under
Section 422 of the Code and (iii) dividend equivalent rights and distribution
equivalent rights which entitle a Participant to be credited with additional
Common Share or Unit Rights.
In connection with the grant of options under the Plan, other than options
to Non-employee Trustees, the Administrator will determine the terms of the
option, including the option exercise price, any vesting requirements and
whether a dividend equivalent right or a distribution equivalent right shall be
awarded. The Administrator has authority to award options at less than fair
market value (as defined in the Plan) but at this time has no intention of
doing so.
Effective as of the closing of the Offering, options for a total of
2,188,500 Common Shares and Units have been granted to employees, officers and
Non-employee Trustees with an exercise price of $20 per share. The initial
options granted under the Plan have ten-year terms and become exercisable in
four equal annual installments commencing on the first anniversary of the date
of grant, subject to acceleration of vesting upon a change in control of the
Company (as defined in the Plan).
To the extent an option has not become exercisable at the time of the
holder's termination of employment, it will be forfeited unless the
Administrator has previously exercised its reasonable discretion to make such
option exercisable, and all vested options which are not exercised by the
expiration date described in the Plan will be forfeited. Any Common Shares or
Units subject to an option which is forfeited (or which expires without
exercise) will again be available for grant under the Plan.
F-15
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses to be paid in connection with the issuance and distribution of
the securities being registered are estimated as follows and will be borne by
the registrants:
<TABLE>
<S> <C>
SEC Registration Fee............................................. $ 278,000
Accounting fees and expenses..................................... 150,000
Legal fees and expenses (other than Blue Sky).................... 300,000
Blue sky fees and expenses....................................... 20,000
Printing and engraving expenses.................................. 250,000
Rating agencies fees............................................. 250,000
Trustee and transfer agent fees (including counsel fees)......... 10,000
NASD fee......................................................... 30,500
Miscellaneous expenses........................................... 125,000
----------
Total.......................................................... $1,413,500
==========
</TABLE>
Item 15. Indemnification of Directors and Officers.
Article 9, Section 1 of the Company's Declaration of Trust provides as
follows with respect to the limitation of liability for Trustees and officers
and indemnification:
"To the maximum extent that Maryland law in effect from time to time
permits limitation of the liability of trustees and officers of a REIT, no
trustee or officer of the Trust shall be liable to the Trust or to any
shareholder for money damages. Neither the amendment nor the repeal of this
Section 1, nor the adoption or amendment of any other provision of this
Declaration of Trust inconsistent with this Section 1, shall apply to or
affect in any respect the applicability of the preceding sentence with
respect to any act or failure to act which occurred prior to such
amendment, repeal or adoption. In the absence of any Maryland statute
limiting the liability of trustees or officers of a Maryland REIT for money
damages in a suit by or on behalf of the Trust or by any shareholder, no
trustee or officer of the Trust shall be liable to the Trust or to any
shareholder for money damages except to the extent that (a) the trustee or
officer actually received an improper benefit or profit in money, property
or services, for the amount of the benefit or profit in money, property or
services actually received or (b) a judgment or other final adjudication
adverse to the trustee or officer is entered in a proceeding based on a
finding in the proceeding that the trustee's or officer's action or failure
to act was the result of active and deliberate dishonesty and was material
to the cause of the action adjudicated in the proceeding."
Article 9, Section 3 of the Registrant's Declaration of Trust provides as
follows with respect to the indemnification of Trustees and officers:
"Notwithstanding any other provisions of this Declaration of Trust, the
Trust, for the purpose of providing indemnification for its Trustees and
officers, shall have the authority, without specific shareholder approval,
to enter into insurance or other arrangements to indemnify all Trustees and
officers of the Trust against any and all liabilities and expenses incurred
by them by reason of their being Trustees or officers of the Trust, whether
or not the Trust would otherwise have the power under this Declaration of
Trust or under Maryland law to indemnify such persons against such
liability. Without limiting the power of the Trust to procure or maintain
any kind of insurance or other arrangement, the Trust may, for the benefit
of persons indemnified by it, (a) create a trust fund, (b) establish any
form of self-insurance, (c) secure its indemnity obligation by grant of any
security interest or other lien on the assets of the Trust, or (d)
establish a letter of credit, guaranty or surety arrangement. Any such
insurance or other arrangement may be procured, maintained or established
within the Trust or with any insurer or other person deemed appropriate by
the Board regardless of whether all or part of the stock or other
securities thereof are owned in whole or in part by the Trust.
II-1
<PAGE>
In the absence of fraud, the judgment of the Board as to the terms and
conditions of insurance or other arrangement and the identity of the
insurer or other person participating in any arrangement shall be
conclusive, and such insurance or other arrangement shall not be subject to
voidability, nor subject the Trustees approving such insurance or other
arrangement to liability on any ground, regardless of whether Trustees
participating and approving such insurance or other arrangement shall be
beneficiaries thereof."
The Company has entered into indemnity agreements with each of its officers
and Trustees which provide for reimbursement of all expenses and liabilities
of such officer or Trustee, arising out of any lawsuit or claim against such
officer or Trustee due to the fact that such person was or is serving as an
officer or Trustee, except for such liabilities and expenses (a) the payment
of which is judicially determined to be unlawful, (b) relating to claims under
Section 16(b) of the Securities Exchange Act of 1934 or (c) relating to
judicially determined criminal violations.
It is expected that forms of underwriting agreements that may be filed in
connection with this Registration Statement will provide for reciprocal
indemnification by the underwriters, and their respective directors, officers
and controlling persons, against certain liabilities under the Securities Act.
Item 16. Exhibits.
See the Exhibit Index which is hereby incorporated herein by reference.
Item 17. Undertakings.
The undersigned Registrants hereby undertake:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the SEC pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement;
(b) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(c) 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.
II-2
<PAGE>
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
The undersigned registrants hereby undertake to supplement the prospectus,
after the expiration of any subscription period, to set forth the results of
the subscription offer, the transactions by the underwriters during the
subscription period, the amount of unsubscribed securities to be purchased by
the underwriters, and the terms of any subsequent offering thereof. If any
public offering by the underwriters is to be made on terms differing from
those set forth on the cover page of the prospectus, a post-effective
amendment will be filed to set forth the terms of such offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act of 1933 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 trustee, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
The undersigned registrants hereby undertake that:
(a) or purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the 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; and
(b) for the purposes of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
The undersigned registrants hereby undertake to file an application for the
purpose of determining the eligibility of the trustee to act under section (a)
of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the SEC under Section 305(b)(2) of the Act.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrants
certify that they have reasonable grounds to believe that they meet all the
requirements for filing on Form S-3 and have duly caused this Registration
Statement to be signed on their behalf by the undersigned, thereunto duly
authorized, in the City of Boston, State of Massachusetts, on the 29th day of
January, 1999.
CABOT INDUSTRIAL TRUST
/s/ Robert E. Patterson
By: _________________________________
Robert E. Patterson
President
CABOT INDUSTRIAL PROPERTIES, L.P.
By: Cabot Industrial Trust, as
general partner
/s/ Robert E. Patterson
By: _________________________________
Robert E. Patterson
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints jointly and severally, Ferdinand
Colloredo-Mansfeld, Robert E. Patterson, Franz Colloredo-Mansfeld, and Neil E.
Waisnor and each of them, his true and lawful attorney-in-fact and agent, each
with the power of substitution, for him in any and all capacities, to sign any
and all amendments to this Registration Statement (including post-effective
amendments), and to sign any registration statement for the same offering
covered by this Registration Statement that is to be effective upon filing
pursuant to Rule 462(b) promulgated under the Securities Act of 1933, and all
post-effective amendments thereto, and to file the same, with all exhibits
thereto, and any and all other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact and agents, or his substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dated indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Ferdinand Colloredo-Mansfeld Chairman of the Board, Chief January 29,
____________________________________ Executive Officer, Trustee 1999
Ferdinand Colloredo-Mansfeld (Principal Executive
Officer)
/s/ Robert E. Patterson President, Trustee January 29,
____________________________________ 1999
Robert E. Patterson
/s/ Franz Colloredo-Mansfeld Chief Financial Officer, January 29,
____________________________________ (Principal Financial 1999
Franz Colloredo-Mansfeld Officer)
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Neil E. Waisnor Senior Vice President-- January 29,
____________________________________ Finance, Treasurer, 1999
Neil E. Waisnor Secretary (Principal
Accounting Officer)
/s/ Christopher C. Milliken Trustee January 26,
____________________________________ 1999
Christopher C. Milliken
/s/ Maurice Segall Trustee January 29,
____________________________________ 1999
Maurice Segall
/s/ W. Nicholas Thorndike Trustee January 29,
____________________________________ 1999
W. Nicholas Thorndike
/s/ Ronald L. Skates Trustee January 29,
____________________________________ 1999
</TABLE> Ronald L. Skates
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Document Description
------- --------------------
<C> <S>
1.1 Form of Underwriting Agreement for Debt Securities.*
1.2 Form of Underwriting Agreement for Preferred Shares.*
1.3 Form of Underwriting Agreement for Common Shares.*
4.1 Amended and Restated Declaration of Trust of the Company, dated
January 26, 1998 (incorporated by reference to Exhibit 3.1 to the
Company's Form S-11 Registration Statement No. 333-38383 (the "Form S-
11")).
4.2 Amended and Restated Bylaws (incorporated by reference to Exhibit 2 to
the Company's Form 8-K filed on September 16, 1998).
4.3 Second Amended and Restated Agreement of Limited Partnership of Cabot
Industrial Properties, L.P., dated February 4, 1998 (incorporated by
reference to Exhibit 3.5 to the Form S-11).
4.4 Form of Common Share Certificate (incorporated by reference to Exhibit
3.4 to the Form S-11).
4.5 Form of Preferred Share Certificate.*
4.6 Form of Warrant Agreement.*
4.7 Form of Deposit Agreement.*
4.8 Form of Registration Rights and Lock-Up Agreement, between the Company
and the persons listed on the signature page thereto (incorporated by
reference to Exhibit 3.3 to the Form S-11).
4.9 Form of Registration Rights and Lock-Up Agreement, between the Company
and Morgan Stanley Asset Management, Inc., on behalf of certain of its
institutional investors (incorporated by reference to Exhibit 10.3 to
the Form S-11).
4.10 Contribution Agreement relating to the Capitalization of Cabot
Industrial Trust, dated as of October 10, 1997, among the Company, the
Operating Partnership, Cabot Partners and Various Contributors and
Title Holding Entities Identified Therein (incorporated by reference
to Exhibit 4.1 to the Form S-11).
4.11 Form of Indenture by and among the Operating Partnership, the Company
and , as trustee.
5.1 Opinion of Mayer, Brown & Platt as to the validity of the Offered
Securities.
5.2 Opinion of Ballard Spahr Andrews & Ingersoll, LLP regarding the
validity of certain securities being registered.
8.1 Opinion of Mayer, Brown & Platt as to certain tax matters.
12.1 Statement re: Computation of Ratio of Earnings to Fixed Charges and
Preferred Distributions (Company).
12.2 Statement re: Computation of Ratio of Earnings to Combined Fixed
Charges (Operating Partnership).
12.3 Statement re: Computation of Ratio of Earnings to Combined Fixed
Charges (Existing Investors Property Group)
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Arthur Andersen LLP
23.3 Consent of KPMG LLP
23.4.1 Consent of PricewaterhouseCoopers LLP
23.4.2 Consent of PricewaterhouseCoopers LLP
23.5 Consent of Mayer, Brown & Platt (included in the opinions filed as
Exhibit 5.1 and 8.1 to this Registration Statement).
23.5 Consent of Ballard Spahr Andrews & Ingersoll, LLP (included in the
opinions filed as Exhibit 5.2).
24.1 Power of Attorney pursuant to which amendments to this Registration
Statement may be filed (included on page II-4 of this Registration
Statement).
25.1 Statement of Eligibility of Trustee on Form T-1.*
</TABLE>
- --------
* To be filed by an amendment or incorporated by reference in connection with
the offering of the Offered Securities.
<PAGE>
Exhibit 4.11
================================================================================
CABOT INDUSTRIAL PROPERTIES, L.P.,
Issuer
AND
CABOT INDUSTRIAL TRUST,
Guarantor
TO
-------------------------------,
Trustee
INDENTURE
Dated as of _____ __, 1999
------------------
Senior Debt Securities
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE ONE
<S> <C>
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION..................... 1
SECTION 101. Definitions................................................ 1
Act.................................................................. 2
Additional Amounts................................................... 2
Affiliate............................................................ 2
Authenticating Agent................................................. 2
Authorized Newspaper................................................. 2
Bankruptcy Law....................................................... 2
Bearer Security...................................................... 2
Board of Trustees.................................................... 3
Board Resolution..................................................... 3
Business Day......................................................... 3
CEDEL................................................................ 3
Commission3
Common Depository.................................................... 3
Company.............................................................. 3
Company Certificate.................................................. 3
Company Request and Company Order.................................... 3
Conversion Event..................................................... 3
Corporate Trust Office............................................... 4
corporation.......................................................... 4
coupon............................................................... 4
covenant defeasance.................................................. 4
Custodian............................................................ 4
Defaulted Interest................................................... 4
defeasance........................................................... 4
Dollar or $.......................................................... 4
DTC.................................................................. 4
Euro................................................................. 4
Euroclear............................................................ 4
Event of Default..................................................... 4
Exchange Act......................................................... 4
Exchange Date........................................................ 4
Financial Statements................................................. 4
Foreign Currency..................................................... 4
GAAP................................................................. 5
Government Obligations............................................... 5
Guarantee............................................................ 5
Guaranteed Securities................................................ 5
Holder............................................................... 5
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Indenture............................................................ 5
Indexed Security..................................................... 6
interest............................................................. 6
Interest Payment Date................................................ 6
Make-Whole Amount.................................................... 6
mandatory sinking fund payment....................................... 6
Maturity............................................................. 6
Notice of Default.................................................... 6
Operating Partnership................................................ 6
Operating Partnership Certificate.................................... 6
Operating Partnership Reques or Operating Partnership Order.......... 7
Opinion of Counsel................................................... 7
optional sinking fund payment........................................ 7
Original Issue Discount Security..................................... 7
Outstanding.......................................................... 7
Paying Agent......................................................... 8
Person............................................................... 8
Place of Payment..................................................... 8
Predecessor Security................................................. 9
Redemption Date...................................................... 9
Redemption Price..................................................... 9
Registered Security.................................................. 9
Regular Record Date.................................................. 9
Repayment Date....................................................... 9
Repayment Price...................................................... 9
Required Filing Dates................................................ 9
Responsible Officer.................................................. 9
Securities Act....................................................... 9
Security............................................................. 9
Security Register and Security Registrar............................. 10
Significant Subsidiary............................................... 10
Special Record Date.................................................. 10
Stated Maturity...................................................... 10
Subsidiary........................................................... 10
Trust Indenture Act.................................................. 10
Trustee.............................................................. 10
United States........................................................ 10
United States person................................................. 11
Yield to Maturity.................................................... 11
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 102. Compliance Certificates and Opinions..................... 11
SECTION 103. Form of Documents Delivered to Trustee................... 11
SECTION 104. Acts of Holders.......................................... 12
SECTION 105. Notices to Trustee, Operating Partnership and Company.... 14
SECTION 106. Notice to Holders; Waiver................................ 14
SECTION 107. Effect of Headings and Table of Contents................. 15
SECTION 108. Successors and Assigns................................... 16
SECTION 109. Separability Clause...................................... 16
SECTION 110. Benefits of Indenture.................................... 16
SECTION 111. No Personal Liability.................................... 16
SECTION 112. Governing Law............................................ 16
SECTION 113. Legal Holidays........................................... 16
SECTION 114. Counterparts............................................. 17
ARTICLE TWO
SECURITIES FORMS............................................................ 17
SECTION 201. Forms of Securities...................................... 17
SECTION 202. Form of Trustee's Certificate of Authentication.......... 17
SECTION 203. Securities Issuable in Global Form....................... 18
ARTICLE THREE
THE SECURITIES.............................................................. 19
SECTION 301. Amount Unlimited; Issuable in Series..................... 19
SECTION 302. Denominations............................................ 23
SECTION 303. Execution, Authentication, Delivery and Dating........... 23
SECTION 304. Temporary Securities..................................... 26
SECTION 305. Registration, Registration of Transfer and Exchange...... 28
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities......... 32
SECTION 307. Payment of Interest; Interest Rights Preserved........... 33
SECTION 308. Persons Deemed Owners.................................... 36
SECTION 309. Cancellation............................................. 36
SECTION 310. Computation of Interest.................................. 37
ARTICLE FOUR
SATISFACTION AND DISCHARGE.................................................. 37
SECTION 401. Satisfaction and Discharge of Indenture.................. 37
SECTION 402. Application of Trust Funds............................... 39
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE FIVE
REMEDIES.................................................................... 39
SECTION 501. Events of Default........................................ 39
SECTION 502. Acceleration of Maturity; Rescission and Annulment....... 42
SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee.............................................. 43
SECTION 504. Trustee May File Proofs of Claim......................... 44
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or Coupons.................................... 45
SECTION 506. Application of Money Collected........................... 45
SECTION 507. Limitation on Suits...................................... 45
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium or Make-Whole Amount, Interest and
Additional Amounts....................................... 46
SECTION 509. Restoration of Rights and Remedies....................... 46
SECTION 510. Rights and Remedies Cumulative........................... 46
SECTION 511. Delay or Omission Not Waiver............................. 47
SECTION 512. Control by Holders of Securities......................... 47
SECTION 513. Waiver of Past Defaults.................................. 47
SECTION 514. Waiver of Usury, Stay or Extension Laws.................. 48
SECTION 515. Undertaking for Costs.................................... 48
ARTICLE SIX
THE TRUSTEE................................................................. 48
SECTION 601. Notice of Defaults....................................... 48
SECTION 602. Certain Rights of Trustee................................ 49
SECTION 603. Not Responsible for Recitals or Issuance of Securities... 50
SECTION 604. May Hold Securities...................................... 51
SECTION 605. Money Held in Trust...................................... 51
SECTION 606. Compensation and Reimbursement........................... 51
SECTION 607. Trustee Eligibility; Conflicting Interests............... 52
SECTION 608. Resignation and Removal; Appointment of Successor........ 52
SECTION 609. Acceptance of Appointment by Successor................... 54
SECTION 610. Merger, Conversion, Consolidation or Succession
to Business.............................................. 55
SECTION 611. Appointment of Authenticating Agent...................... 55
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE,OPERATING PARTNERSHIP AND
COMPANY..................................................................... 57
SECTION 701. Disclosure of Names and Addresses of Holders............. 57
SECTION 702. Reports by Trustee....................................... 57
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 703. Reports by Operating Partnership and Company............. 57
SECTION 704. Operating Partnership and Company to Furnish Trustee
Names and Addresses of Holders........................... 58
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE............................ 58
SECTION 801. Consolidations, Mergers, Sales, Leases and Conveyances
of Operating Partnership Permitted Subject
to Certain Conditions.................................... 58
SECTION 802. Rights and Duties of Successor Entity.................... 59
SECTION 803. Operating Partnership Certificate and Opinion of Counsel. 59
SECTION 804. Consolidations, Mergers, Sales, Leases and Conveyances
of Company Permitted Subject to Certain Conditions...... 60
SECTION 805. Rights and Duties of Successor Corporation............... 60
SECTION 806. Company Certificate and Opinion of Counsel............... 60
SECTION 807. Assumption by Company.................................... 60
ARTICLE NINE
SUPPLEMENTAL INDENTURES..................................................... 61
SECTION 901. Supplemental Indentures Without Consent of Holders....... 61
SECTION 902. Supplemental Indentures with Consent of Holders.......... 63
SECTION 903. Execution of Supplemental Indentures..................... 64
SECTION 904. Effect of Supplemental Indentures........................ 64
SECTION 905. Conformity with Trust Indenture Act...................... 64
SECTION 906. Reference in Securities to Supplemental Indentures....... 64
SECTION 907. Notice of Supplemental Indentures........................ 65
ARTICLE TEN
COVENANTS................................................................... 65
SECTION 1001. Payment of Principal, Premium or Make-Whole Amount,
Interest and Additional Amounts......................... 65
SECTION 1002. Maintenance of Office or Agency......................... 65
SECTION 1003. Money for Securities Payments to Be Held in Trust....... 67
SECTION 1004. Existence............................................... 69
SECTION 1005. Maintenance of Properties............................... 69
SECTION 1006. Insurance............................................... 69
SECTION 1007. Payment of Taxes and Other Claims....................... 69
SECTION 1008. Provision of Financial Information...................... 69
SECTION 1009. Statement as to Compliance.............................. 70
SECTION 1010. Additional Amounts...................................... 70
SECTION 1011. Waiver of Certain Covenants............................. 71
</TABLE>
v
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE ELEVEN
REDEMPTION OF SECURITIES.................................................... 72
SECTION 1101. Applicability of Article................................ 72
SECTION 1102. Election to Redeem; Notice to Trustee................... 72
SECTION 1103. Selection by Trustee of Securities to Be Redeemed....... 72
SECTION 1104. Notice of Redemption.................................... 73
SECTION 1105. Deposit of Redemption Price............................. 74
SECTION 1106. Securities Payable on Redemption Date................... 74
SECTION 1107. Securities Redeemed in Part............................. 75
ARTICLE TWELVE
SINKING FUNDS............................................................... 75
SECTION 1201. Applicability of Article................................ 75
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities... 76
SECTION 1203. Redemption of Securities for Sinking Fund............... 76
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS.......................................... 77
SECTION 1301. Applicability of Article................................ 77
SECTION 1302. Repayment of Securities................................. 77
SECTION 1303. Exercise of Option...................................... 77
SECTION 1304. When Securities Presented for Repayment Become Due
and Payable............................................. 78
SECTION 1305. Securities Repaid in Part............................... 79
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE.......................................... 79
SECTION 1401. Applicability of Article; Operating Partnership's Option
to Effect Defeasance or Covenant Defeasance............. 79
SECTION 1402. Defeasance and Discharge................................ 79
SECTION 1403. Covenant Defeasance..................................... 80
SECTION 1404. Conditions to Defeasance or Covenant Defeasance......... 80
SECTION 1405. Deposited Money and Government Obligations to Be
Held in Trust; Other Miscellaneous Provisions........... 83
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES........................................... 84
SECTION 1501. Purposes for Which Meetings May Be Called............... 84
SECTION 1502. Call, Notice and Place of Meetings...................... 84
SECTION 1503. Persons Entitled to Vote at Meetings.................... 84
</TABLE>
vi
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1504. Quorum; Action.......................................... 85
SECTION 1505. Determination of Voting Rights; Conduct and
Adjournment of Meetings................................. 86
SECTION 1506. Counting Votes and Recording Action of Meetings......... 87
SECTION 1507. Evidence of Action Taken by Holders..................... 87
SECTION 1508. Proof of Execution of Instruments....................... 87
ARTICLE SIXTEEN
GUARANTEE................................................................... 88
SECTION 1601. Guarantee............................................... 88
</TABLE>
TESTIMONIUM
SIGNATURES
ACKNOWLEDGMENTS
EXHIBIT A - FORMS OF CERTIFICATION
vii
<PAGE>
Reconciliation and tie between
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),
and Indenture
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
<S> <C>
310(a)(1), (2) and (5)............................................... 607(a)
310(a)(3) and (4).................................................... Not applicable
310(b)............................................................... 608(d)
310(c)............................................................... Not applicable
311.................................................................. Not applicable
312(a)............................................................... 704
312(b)............................................................... Not applicable
312(c)............................................................... 701
313(a) and (c)....................................................... 702
313(b) and (d)....................................................... Not applicable
314(a)(1), (2) and (3)............................................... 703
314(a)(4)............................................................ 1009
314(b)............................................................... Not applicable
314(c)............................................................... 102
314(d)............................................................... Not applicable
314(e)............................................................... 102
314(f)............................................................... Not applicable
315(a), (c), (d) and (e)............................................. Not applicable
315(b)............................................................... 601
316(a) (last sentence)............................................... 101 ("Outstanding")
316(a)(1)(A)......................................................... 512
316(a)(1)(B)......................................................... 513
316(a)(2)............................................................ Not applicable
316(b)............................................................... 508
316(c)............................................................... Not applicable
317(a)(1)............................................................ 503
317(a)(2)............................................................ 504
317(b)............................................................... Not applicable
318(a)............................................................... 112
</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 Trust
Indenture Act, which provides that the provisions of Sections 310 to and
including 317 of the Trust Indenture Act are a part of and govern every
qualified indenture, whether or not physically contained therein.
viii
<PAGE>
INDENTURE, dated as of ___________ __, 1999, among CABOT INDUSTRIAL
PROPERTIES, L.P., a Delaware limited partnership (hereinafter called the
"Operating Partnership"), CABOT INDUSTRIAL TRUST, a Maryland real estate
- ----------------------
investment trust (hereinafter called the "Company"), both the Company and the
-------
Operating Partnership having their principal office at Two Center Plaza, Suite
200, Boston, Massachusetts 02108 and [NAME OF TRUSTEE], a ______________
_____________________, as Trustee hereunder (hereinafter called the "Trustee"),
-------
having its Corporate Trust Office at
____________________________________________________________________________.
RECITALS
The Operating Partnership may deem it necessary to issue from time to time
for its lawful purposes senior debt securities (hereinafter called the
"Securities") evidencing its unsecured and unsubordinated indebtedness, and has
- -----------
duly authorized the execution and delivery of this Indenture to provide for the
issuance from time to time of the Securities, unlimited as to aggregate
principal amount, to bear interest at the rates or formulas, to mature at such
times and to have such other provisions as shall be fixed therefor as
hereinafter provided.
All things necessary to make this Indenture a valid agreement of the
Operating Partnership, in accordance with its terms, have been done.
For value received, the execution and delivery by the Company of this
Indenture to provide for the issuance of guarantees (herein called the
"Guarantees") from time to time as herein contemplated and the endorsement of
- -----------
such Guarantees on the Securities has been duly authorized. All things
necessary to make this Indenture a valid agreement of the Company, in accordance
with its terms, have been done.
This Indenture is subject to the provisions of the Trust Indenture Act (as
herein defined) and the rules and regulations of the Commission (as herein
defined) promulgated thereunder which are required to be part of this Indenture
and, to the extent applicable, shall be governed by such provisions.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof (as herein defined), it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders of the
Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101 Definitions. For all purposes of this Indenture, except as
-----------
otherwise expressly provided or the context otherwise requires:
1
<PAGE>
(1) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein, and the terms "cash transaction" and "self-
---------------- ----
liquidating paper," as used in Section 311 of the Trust Indenture Act,
-----------------
shall have the meanings assigned to them in the rules of the Commission
adopted under the Trust Indenture Act;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP (as herein defined); and
(4) the words "herein," "hereof" and "hereunder" and other words of
------ ------ ---------
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act" has the meaning specified in Section 104(a).
---
"Additional Amounts" means any additional amounts which are required by
------------------
the terms of a Security, under circumstances specified therein, to be paid by
the Operating Partnership in respect of certain taxes imposed on certain Holders
and which are owing to such Holders.
"Affiliate" when used with respect to any Person, means any other Person
---------
directly or indirectly controlling or controlled by or under direct or indirect
common control with such 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.
"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 a Security which is payable to bearer.
---------------
2
<PAGE>
"Board of Trustees" means the board of trustees of the Company, the
-----------------
executive committee or any other committee of such board duly authorized to act
for it in respect hereof.
"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 Trustees, and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" when used with respect to any Place of Payment or any other
------------
particular location referred to in this Indenture or in any Securities, means,
unless otherwise specified with respect to any Securities pursuant to Section
301, any day, other than a Saturday or Sunday, which is neither a legal holiday
nor a day on which banking institutions in such 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 Exchange Act, 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 Depository" has the meaning specified in Section 304(b).
-----------------
"Company" means the Person named as the "Company" in the first paragraph
-------
of this Indenture until a successor corporation has become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation, and any other guarantor on any Guarantee.
"Company Certificate" means a certificate signed by the Chairman of the
-------------------
Board of Trustees, the President or a Vice President of the Company and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company, and delivered to the Trustee.
"Company Request" and "Company Order" mean, respectively, a written
--------------- -------------
request or order signed in the name of the Company by the Chairman of the Board
of Trustees, the President or a Vice President of the Company and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company, and delivered to the Trustee.
"Conversion Event" means the cessation of use of (i) a Foreign Currency
----------------
(other than the Euro or other currency unit) both by the government of the
country which issued such currency and for the settlement of transactions by a
central bank or other public institutions of or within the international banking
community, (ii) the Euro or (iii) any currency unit (or composite currency)
other than the Euro for the purposes for which it was established.
3
<PAGE>
"Corporate Trust Office" means the office of the Trustee at which, at any
----------------------
particular time, its corporate trust business is principally administered, which
office at the date hereof is located at _______________________________________.
"corporation" includes corporations, associations, limited liability
-----------
companies, real estate investment trusts and business trusts.
"coupon" means any interest coupon appertaining to a Bearer Security.
------
"covenant defeasance" has the meaning specified in Section 1403.
-------------------
"Custodian" has the meaning specified in Section 501.
---------
"Defaulted Interest" has the meaning specified in Section 307.
------------------
"defeasance" has the meaning specified in Section 1402.
----------
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
------ -
currency of the United States of America as at the time is legal tender for the
payment of public and private debts.
"DTC" means The Depository Trust Company.
---
"Euro" means the single currency of the participating member states from
----
time to time of the European Union described in legislation of the European
Council for the operation of a single unified European currency (whether known
as the Euro or otherwise).
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
---------
Office, or its successor as operator of the Euroclear System.
"Event of Default" has the meaning specified in Section 501.
----------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
------------
the rules and regulations promulgated thereunder by the Commission.
"Exchange Date" has the meaning specified in Section 304(b).
-------------
"Financial Statements" has the meaning specified in Section 1008.
--------------------
"Foreign Currency" means any currency, currency unit or composite
----------------
currency, including, without limitation, the Euro 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.
4
<PAGE>
"GAAP" means generally accepted accounting principles as used in the
----
United States applied on a consistent basis as in effect from time to time;
provided that, solely for purposes of calculating the financial covenants
- --------
contained herein, "GAAP" shall mean generally accepted accounting principles as
used in the United States on the date hereof, applied on a consistent basis.
"Government Obligations" means securities which are (i) direct obligations
----------------------
of the United States of America or the government which issued the Foreign
Currency in which the Securities of a particular series are payable, for the
payment of which its full faith and credit is pledged or (ii) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality of
the United States of America or such government which issued the Foreign
Currency in which the Securities of such series are payable, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America or such other government, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and also
includes a depository receipt issued by a bank or trust company as custodian
with respect to any such Government Obligation or a specific payment of interest
on or principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
--------
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt.
"Guarantee" means the unconditional guarantee of the payment of the
---------
principal of (and premium and Make-Whole Amount, if any, on) and interest and
Additional Amounts, if any, on the Guaranteed Securities by the Company, as more
fully described in Article Sixteen.
"Guaranteed Securities" means a series of Securities made subject to a
---------------------
Guarantee (as set forth in Article Sixteen) pursuant to Section 301.
"Holder" when used with respect to a Registered Security, means the Person
------
in whose name such Registered Security is registered in the Security Register
and, when used with respect to a Bearer Security or any coupon, means the bearer
thereof.
"Indenture" means this instrument as originally executed or as it may from
---------
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, and includes
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" when used with respect to
any one or more series of Securities with respect to which such Person is acting
as Trustee, shall mean this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and shall
include the terms of the or those particular series of Securities with respect
to which such Person is acting as Trustee established as contemplated
5
<PAGE>
by Section 301, exclusive, however, of any provisions or terms which relate
solely to other series of Securities with respect to which such Person is not
acting as 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
face principal 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.
"Make-Whole Amount" means the amount, if any, in addition to principal
-----------------
which is required by a Security, under the terms and conditions specified
therein or as otherwise specified as contemplated by Section 301, to be paid by
the Operating Partnership to the Holder thereof in connection with any optional
redemption or accelerated payment of such Security.
"mandatory sinking fund payment" has the meaning specified in Section
------------------------------
1201.
"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, repurchase or otherwise.
"Notice of Default" has the meaning specified in Section 501.
-----------------
"Operating Partnership" means the Person named as the "Operating
---------------------
Partnership" in the first paragraph of this Indenture until a successor Person
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Operating Partnership" shall mean such successor Person, and any
other obligor upon the Securities.
"Operating Partnership Certificate" means a certificate signed in the name
---------------------------------
of the Operating Partnership by the Chairman of the Board of Trustees, the
President or a Vice President of the Company and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company, in the
Company's capacity as sole general partner of the Operating Partnership, and
delivered to the Trustee.
6
<PAGE>
"Operating Partnership Request" or "Operating Partnership Order" mean,
----------------------------- ---------------------------
respectively, a written request or order signed in the name of the Operating
Partnership by the Chairman of the Board of Trustees, the President or a Vice
President of the Company and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company, in the Company's capacity as
general partner of the Operating Partnership, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
------------------
employee of or counsel for the Operating Partnership or the Company or other
counsel satisfactory to the Trustee.
"optional sinking fund payment" has the meaning specified in Section 1201.
-----------------------------
"Original Issue Discount Security" means any Security which provides for
--------------------------------
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding" when used with respect to Securities, means, as of the date
-----------
of determination, all Securities theretofore authenticated and delivered under
this Indenture, exclusive of:
(1) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(2) Securities, or portions thereof, for whose payment or
redemption or repayment at the option of the Holder money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Operating Partnership or the Company) in trust or set aside
and segregated in trust by the Operating Partnership (if the Operating
Partnership shall act as its own Paying Agent) for the holders of such
Securities and any coupons appertaining thereto, provided that, if such
--------
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or other provision therefor satisfactory
to the Trustee has been made;
(3) Securities, except solely to the extent provided in Section
401, 1402 or 1403, as applicable, with respect to which the Operating
Partnership has effected defeasance and/or covenant defeasance as provided
in Article Four or Fourteen; and
(4) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there has 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 Operating Partnership;
7
<PAGE>
provided, however, that in determining whether the Holders of the required
- -------- -------
principal amount of the Outstanding Securities have concurred in any request,
demand, authorization, direction, notice, consent or waiver hereunder or are
present at a meeting of Holders for quorum purposes, and for the purpose of
making the calculations required by Section 313 of the Trust Indenture Act, (i)
the principal amount of an Original Issue Discount Security which may be counted
in making such determination or calculation and which shall be deemed
Outstanding for such purpose shall be equal to the amount of principal thereof
which would be (or has 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 which may be counted in making such determination or
calculation and which 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 Operating Partnership, 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 which may be counted in making such determination or
calculation and which shall be deemed Outstanding for such purpose shall be
equal to the face principal amount of such Indexed Security at original
issuance, unless otherwise provided with respect to such Indexed Security
pursuant to Section 301, and (iv) Securities owned by the Operating Partnership,
the Company or any other obligor on the Securities or any Affiliate of the
Operating Partnership, the Company or of such other obligor shall be disregarded
and deemed not Outstanding, except that, for the purposes of determining whether
the Trustee is protected in making such calculation or in relying on any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Operating Partnership, the Company or any other obligor on the
Securities or any Affiliate of the Operating Partnership, the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Operating Partnership to
------------
pay the principal of (and premium or Make-Whole Amount, if any, on) and interest
and Additional Amounts, if any, on any Securities or coupons on behalf of the
Operating Partnership, or if no such Person is authorized, the Operating
Partnership.
"Person" means any individual, corporation, partnership, limited liability
------
company, joint venture, association, joint-stock company, real estate investment
trust, business trust, unincorporated organization or government or any agency
or political subdivision thereof.
"Place of Payment" when used with respect to the Securities of or within
----------------
any series, means the Corporate Trust Office of the Trustee and any place or
places which the Operating Partnership may from time to time designate as the
place or places where the principal of (and premium or Make-Whole Amount, if
any, on) and interest and Additional Amounts, if any, on such Securities are
payable as specified as contemplated by Sections 301 and 1002 and
8
<PAGE>
presentations, surrenders, notices and demands with respect to such Securities
and this Indenture may be made.
"Predecessor Security" when used with respect to any particular Security,
--------------------
means every previous Security evidencing all or a portion of the same debt as
evidenced by such 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.
"Redemption Date" when used with respect to any Security to be redeemed,
---------------
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price" when used with respect to any Security to be redeemed,
----------------
means the price at which it is to be redeemed pursuant to this Indenture.
"Registered Security" means any Security which is registered in the
-------------------
Security Register.
"Regular Record Date" when used with respect to an installment of 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" when used with respect to any Security to be repaid or
--------------
repurchased at the option of the Holder, means the date fixed for such repayment
or repurchase by or pursuant to this Indenture.
"Repayment Price" when used with respect to any Security to be repaid or
---------------
repurchased at the option of the Holder, means the price at which it is to be
repaid or repurchased by or pursuant to this Indenture.
"Required Filing Dates" has the meaning specified in Section 1008.
---------------------
"Responsible Officer" when used with respect to the Trustee, means any
-------------------
officer of the Trustee in the corporate trust department or similar group of the
Trustee or, with respect to any particular matter arising hereunder, any officer
of the Trustee to whom such matter has been assigned.
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations promulgated thereunder by the Commission.
"Security" has the meaning specified 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
9
<PAGE>
this Indenture, "Securities" when used with respect to the Indenture with
respect to which such Person is acting as 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 or within any series with respect to which such Person is not
acting as Trustee.
"Security Register" and "Security Registrar" have the respective meanings
----------------- ------------------
specified in Section 305.
"Significant Subsidiary" means any Subsidiary which is a "significant
----------------------
subsidiary" (within the meaning of Regulation S-X promulgated under the
Securities Act.)
"Special Record Date" when used with respect to the payment of any
-------------------
Defaulted Interest on the Registered Securities of or within any series, means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity" when used with respect to any Security or any
---------------
installment of principal thereof or interest thereon or any Additional Amounts
with respect thereto, means the date specified in such Security 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, or
such Additional Amounts are, due and payable.
"Subsidiary" when used with respect to any Person, means any corporation
----------
or other entity of which a majority of (a) the voting power of the voting equity
securities or (b) in the case of a partnership or any other entity other than a
corporation, the outstanding equity interests of which are owned, directly or
indirectly, by such Person. For the purposes of this definition, "voting equity
securities" means equity securities having voting power for the election of
directors, whether at all times or only so long as no senior class of securities
has such voting power by reason of any contingency.
"Trust Indenture Act" 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 has become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then acting as a Trustee hereunder; provided,
--------
however, that if at any time there is more than one such Person, "Trustee" when
- -------
used with respect to the Securities of or within any series, shall mean only the
Trustee with respect to the Securities of such 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.
10
<PAGE>
"United States person" means, unless otherwise specified with respect to
--------------------
any Securities pursuant to Section 301, an individual who is a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source.
"Yield to Maturity" means the yield to maturity, computed at the time of
-----------------
issuance of a Security (or, if applicable, at the most recent redetermination of
interest on such Security) and as set forth in such Security in accordance with
generally accepted United States bond yield computation principles.
SECTION 102. Compliance Certificates and Opinions. Upon any application
------------------------------------
or request by the Operating Partnership or the Company to the Trustee to take
any action under any provision of this Indenture, the Operating Partnership or
the Company, as the case may be, shall furnish to the Trustee an Operating
Partnership Certificate or a Company Certificate, as the case may be, stating
that all conditions precedent, if any, provided for in this Indenture (including
any covenants compliance with which constitute conditions precedent) 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 (other than certificates provided
pursuant to Section 1009) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation on which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he or
she has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such
condition or covenant has been complied with; and
(4) a statement as to whether or not, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee. In any case in which
--------------------------------------
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is
11
<PAGE>
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 Operating Partnership or
the Company may be based, insofar as it relates to legal matters, on an Opinion
of Counsel, or a certificate or representations by counsel, unless such officer
knows, or in the exercise of reasonable care should know, that the opinion,
certificate or representations with respect to the matters on which his or her
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, on a certificate or opinion of, or representations by, an officer or
officers of the Operating Partnership or the Company, as the case may be,
stating that the information as to such factual matters is in the possession of
the Operating Partnership or the Company, as the case may be, unless such
counsel knows that the certificate or opinion or representations as to such
matters are erroneous.
If any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
---------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders of the Outstanding Securities of all series or one or more series,
as the case may be, may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person
or by agents duly appointed in writing. If Securities of a series are
issuable as Bearer Securities, any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this
Indenture to be given or taken by Holders of the Outstanding Securities of
such series may, alternatively, be embodied in and evidenced by the record
of such Holders voting in favor thereof, either in person or by proxies
duly appointed in writing, at any meeting of such Holders 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, if
expressly required herein, to the Operating Partnership or the Company.
Such instrument or instrument 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, the Operating Partnership and
12
<PAGE>
the Company and any agent of the Trustee, the Operating Partnership or the
Company, if made in the manner provided in this Section. The record of any
meeting of Holders of Securities shall be proved in the manner provided in
Section 1506.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him or her
the execution thereof. If such execution is by a signer acting in a
capacity other than his individual capacity, such certificate or affidavit
shall also constitute sufficient proof of his authority. The fact and date
of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other reasonable
manner which the Trustee deems sufficient.
(c) The ownership of Registered Securities shall be proved by the
Security Register.
(d) The ownership of Bearer Securities may be proved by the production
of such Bearer Securities or by a certificate executed, as depository, by
any trust company, bank, banker or other depository, wherever situated, if
such certificate is deemed by the Trustee to be satisfactory, showing that
at the date therein mentioned such Person had on deposit with such
depository, or exhibited to it, the Bearer Securities therein described; or
such facts may be proved by the certificate or affidavit of the Person
holding such Bearer Securities, if such certificate or affidavit is deemed
by the Trustee to be satisfactory. The Trustee, the Operating Partnership
and the Company may assume that such ownership of any Bearer Security
continues until (i) another certificate or affidavit bearing a later date
issued in respect of the same Bearer Security is produced, (ii) such Bearer
Security is produced to the Trustee by some other Person, (iii) such Bearer
Security is surrendered in exchange for a Registered Security or (iv) such
Bearer Security is no longer Outstanding. The ownership of Bearer
Securities may also be proved in any other manner which the Trustee deems
sufficient.
(e) If the Operating Partnership or the Company shall solicit from the
Holders of Registered Securities any request, demand, authorization,
direction, notice, consent, waiver or other Act, the Operating Partnership
or the Company, as the case may be, 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 neither the Operating Partnership
nor the Company shall be obligated to do so. Notwithstanding Section
316(c) of the Trust Indenture Act, such record date shall be the record
date specified in or pursuant to such Board Resolution, which shall be a
date not earlier than the date 30 days prior to the first solicitation of
Holders generally in connection therewith and not later than the date such
solicitation is completed. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may
be given before or
13
<PAGE>
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 purpose
of determining whether Holders of the requisite proportion of Outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the
--------
Holders on such record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later
than eleven months after the record date.
(f) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee, any Security Registrar, any Paying Agent, any Authenticating
Agent, the Operating Partnership or the Company in reliance thereon,
whether or not notation of such action is made on such Security.
SECTION 105. Notices to Trustee, Operating Partnership and Company. Any
-----------------------------------------------------
request, demand, authorization, direction, notice, consent, waiver or Act of
Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with:
(1) the Trustee by any Holder, the Operating Partnership or the
Company shall be sufficient for every purpose hereunder if in writing and
mailed, first class postage prepaid, to the Trustee addressed to it at the
address of its Corporate Trust Office specified in the first paragraph of
this Indenture, Attention: Corporate Trust Administration; or
(2) the Operating Partnership or the Company by the Trustee or 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 Operating Partnership or the Company, as the case may be,
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 Operating Partnership or the
Company, as the case may be.
SECTION 106. Notice to Holders; Waiver. When this Indenture provides for
-------------------------
notice of any event to Holders of Registered Securities by the Operating
Partnership, 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 such
Holder's address as it appears in the Security Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case in which 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
14
<PAGE>
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 is impracticable to give such notice
by mail, then such notification to Holders of Registered Securities as is made
with the approval of the Trustee shall constitute a sufficient notification to
such Holders for every purpose hereunder.
Except as otherwise expressly provided herein or otherwise specified with
respect to any Securities pursuant to Section 301, when this Indenture provides
for notice to Holders of Bearer Securities of any event, such notices 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
and, if the Securities of such series are listed on any securities exchange
outside the United States, in any place at which such Securities are listed on a
securities exchange to the extent that such securities exchange so requires, on
a Business Day, such publication to be not later than the latest date, and not
earlier than the earliest date, 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 is impracticable to
publish any notice to Holders of Bearer Securities as provided above, then such
notification to Holders of Bearer Securities as is 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.
When this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 107. Effect of Headings and Table of Contents. The Article and
----------------------------------------
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
15
<PAGE>
SECTION 108. Successors and Assigns. All covenants and agreements in this
----------------------
Indenture by the Operating Partnership or the Company shall bind their
respective successors and assigns, whether so expressed or not.
SECTION 109. Separability Clause. In case any provision in this Indenture
-------------------
or in any Security or Guarantee, if any, endorsed thereon or any coupon
appertaining thereto 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 110. Benefits of Indenture. Nothing in this Indenture or in the
---------------------
Securities or Guarantees, if any, endorsed thereon or any coupons appertaining
thereto, express or implied, shall give to any Person, other than the parties
hereto, any Security Registrar, any Paying Agent, any Authenticating Agent and
their successors hereunder and the Holders any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 111. No Personal Liability. No recourse under or on any
---------------------
obligation, covenant or agreement contained in this Indenture, or in any
Security or Guarantee, if any, endorsed thereon or any coupon appertaining
thereto, or because of any indebtedness evidenced thereby, shall be had against
any promoter, as such, or against any past, present or future trustee, officer,
employee or shareholder, as such, of the Operating Partnership, the Company or
any successor, either directly or through the Operating Partnership, the Company
or any successor, under any rule of law, statute or constitutional provision or
by the enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Securities and Guarantees, if any, endorsed thereon by the
Holders thereof and as part of the consideration for the issue of the Securities
and Guarantees, if any, endorsed thereon.
SECTION 112. Governing Law. This Indenture, the Securities and the
-------------
Guarantees, if any, endorsed thereon and any coupons appertaining thereto shall
be governed by and construed in accordance with the law of the State of
[Massachusetts]. This Indenture is subject to the provisions of the Trust
Indenture Act which are required to be part of this Indenture and shall, to the
extent applicable, be governed by such provisions. If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by operation of
Section 318(c) of the Trust Indenture Act, the imposed duties shall control.
SECTION 113. Legal Holidays. In any case in which any Interest Payment
--------------
Date, Redemption Date, Repayment Date, sinking fund payment date, Stated
Maturity or Maturity of any Security is not 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
the principal of (and premium or Make-Whole Amount, if any, on) or interest or
Additional Amounts, if any, on such Security need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date, Redemption Date, Repayment Date or
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<PAGE>
sinking fund payment date, or at the Stated Maturity or Maturity; provided,
--------
however, 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 114. Counterparts. This Indenture may be executed in several
------------
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
ARTICLE TWO
SECURITIES FORMS
SECTION 201. Forms of Securities. The Registered Securities, if any, of
-------------------
each series, the Bearer Securities, if any, of each series, the related
Guarantees, if any, endorsed thereon and any coupons of each series, shall be in
substantially such forms as are established in or pursuant to one or more
indentures supplemental hereto or Board Resolutions, shall have such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture or any indenture supplemental hereto, and may have
such letters, numbers or other marks of identification or designation and such
legends or endorsements placed thereon as the Operating Partnership or the
Company may deem appropriate and as are not inconsistent with the provisions of
this Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Securities may be listed, or to conform to usage.
Unless otherwise specified as contemplated by Section 301, Bearer
Securities shall have interest coupons attached.
The definitive Securities and coupons shall be printed, lithographed or
engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities or coupons, as evidenced by
their execution of such Securities or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication. Subject to
-----------------------------------------------
Section 611, the Trustee's certificate of authentication shall be in
substantially the following form:
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<PAGE>
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
[NAME OF TRUSTEE],
as Trustee
By:_________________________________
Authorized Officer
SECTION 203. Securities Issuable in Global Form. If Securities of or
----------------------------------
within a series are issuable in global form, as specified as contemplated by
Section 301, then, notwithstanding clause (8) of Section 301 and the provisions
of Section 302, any such Security shall represent such of the Outstanding
Securities of such series as are specified therein and may provide that it shall
represent the aggregate amount of Outstanding Securities of such series from
time to time endorsed thereon and 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 a Security in global form
to reflect the amount, or any increase or decrease in the amount, of Outstanding
Securities represented thereby shall be made by the Trustee in the manner and in
accordance with instructions given by such Person or Persons specified therein
or in the Operating Partnership 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 Security in
permanent global form in the manner and in accordance with instructions given by
the Person or Persons specified therein or in the applicable Operating
Partnership Order. If an Operating Partnership Order pursuant to Section 303 or
304 has been, or simultaneously is, delivered, any instructions by the Operating
Partnership with respect to endorsement or delivery or redelivery of a Security
in global form shall be in writing but need not comply with Section 102 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 Security in global form if such Security was never
issued and sold by the Operating Partnership and the Operating Partnership
delivers to the Trustee the Security in global form 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 premium or Make-
Whole Amount, if any, on) and interest and Additional Amounts, if any, on any
Security in permanent global form shall be made to the Person or Persons
specified therein.
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<PAGE>
Notwithstanding the provisions of Section 308 and except as provided in the
preceding paragraph, the Operating Partnership, the Company, the Trustee and any
agent of the Operating Partnership, the Company or the Trustee shall treat as
the Holder of such principal amount of Outstanding Securities represented by a
permanent global Security (i) in the case of a permanent global Security in
registered form, the Holder of such permanent global Security in registered
form, or (ii) in the case of a permanent global Security in bearer form,
Euroclear or CEDEL.
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series. The aggregate
------------------------------------
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to one or more Board Resolutions, or indentures
supplemental hereto, prior to the issuance of Securities of any series, any or
all of the following, as applicable (each of which (except for the matters set
forth in clauses (1), (2) and (15) below), if so provided, may be determined
from time to time by the Operating Partnership and the Company with respect to
unissued Securities of or within the series when issued from time to time):
(1) the title of the Securities of or within the series (which shall
distinguish the Securities of such series from all other series of
Securities);
(2) any limit on the aggregate principal amount of the Securities of
or within the series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of or within the series pursuant to Section 304, 305, 306, 906,
1107 or 1305);
(3) the date or dates, or the method by which such date or dates will
be determined, on which the principal of the Securities of or within the
series shall be payable and the amount of principal payable thereon;
(4) the rate or rates at which the Securities of or within 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 on which interest shall be calculated if
other than a 360-day year comprised of twelve 30-day months;
(5) the place or places, if any, other than or in addition to the
Corporate Trust Office where the principal of (and premium or Make-Whole
Amount, if any, on) and
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<PAGE>
interest and Additional Amounts, if any, on Securities of or within the
series shall be payable, any Registered Securities of or within the series
may be surrendered for registration of transfer or exchange and notices or
demands to or upon the Operating Partnership or the Company, as applicable,
in respect of the Securities of or within the series, any related
Guarantees and this Indenture may be served;
(6) the period or periods within which, the price or prices (including
the premium or Make-Whole Amount, if any) 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 or within
the series may be redeemed, in whole or in part, at the option of the
Operating Partnership, if the Operating Partnership is to have the option;
(7) the obligation, if any, of the Operating Partnership to redeem,
repay or purchase Securities of or within 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 or within the series shall be redeemed,
repaid or purchased, in whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Registered Securities of or within
the series shall be issuable and, if other than the denomination of $5,000,
the denomination or denominations in which any Bearer Securities of or
within the series shall be issuable;
(9) if other than the Trustee, the identity of each Security Registrar
and/or Paying Agent;
(10) the percentage of the principal amount at which Securities will
be issued and, if other than the principal amount thereof, the portion of
the principal amount of Securities of or within the series which shall be
payable upon declaration of acceleration of the Maturity thereof pursuant
to Section 502;
(11) if other than Dollars, the Foreign Currency or Currencies in
which payment of the principal of (and premium or Make-Whole Amount, if
any, on) or interest or Additional Amounts, if any, on the Securities of or
within the series shall be payable or in which the Securities of or within
the series shall be denominated;
(12) whether the amount of payments of the principal of (and premium
or Make-Whole Amount, if any, on) or interest or Additional Amounts, if
any, on the Securities of or within 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
20
<PAGE>
one or more currencies, currency units, composite currencies, commodities,
equity indices or other indices), and the manner in which such amounts
shall be determined;
(13) whether the principal of (and premium or Make-Whole Amount, if
any, on) or interest or Additional Amounts, if any, on the Securities of or
within the series are to be payable, at the election of the Operating
Partnership 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 (including the Election Date), and the terms and conditions
upon which, such election may be made, and the time and manner of, and
identity of the exchange rate agent with responsibility for, determining
the exchange rate between the currency or currencies, currency unit or
units or composite currency or currencies in which such Securities are
denominated or stated to be payable and the currency or currencies,
currency unit or units or composite currency or currencies in which such
Securities are to be so payable;
(14) provisions, if any, granting special rights to the Holders of
Securities of or within the series on the occurrence of such events as may
be specified;
(15) any deletions from, modifications of or additions to the Events
of Default or covenants of the Operating Partnership or the Company with
respect to Securities of or within the series, whether or not such Events
of Default or covenants are consistent with the Events of Default or
covenants set forth herein;
(16) whether Securities of or within 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 or within the
series may be exchanged for Registered Securities of or within the series
and vice versa (if permitted by applicable laws and regulations), whether
any Securities of or within the series are to be issuable initially in
temporary global form and whether any Securities of or within 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 or within the
series are to be issuable as a global Security, the identity of the
depository for such series, and the date as of which any Bearer Securities
of or within the series and any temporary global Security representing
Outstanding Securities of or within the series shall be dated if other than
the date of original issuance of the first Security of the series to be
issued;
(17) the Person to whom any interest on any Registered Security of the
series shall be payable, if other than the Person in whose name such
Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date
21
<PAGE>
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;
(18) the applicability, if any, of Sections 1402 and/or 1403 to the
Securities of or within the series and any provisions in modification of,
in addition to or in lieu of any of the provisions of Article Fourteen;
(19) 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;
(20) whether Securities of or within the series are to be Guaranteed
Securities and, if so, the terms of the Guarantees endorsed thereon;
(21) whether and under what circumstances the Operating Partnership
will pay Additional Amounts as contemplated by Section 1010 on the
Securities of or within 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 Operating Partnership will have the option to redeem such Securities
rather than pay such Additional Amounts (and the terms of any such option);
and
(22) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining to any Bearer
Securities of such series, if any, and the Guarantees, if any, endorsed on any
Bearer Securities of such series, if any, shall be substantially identical
except, in the case of Registered or Bearer Securities issued in global form, as
to denomination and except as may otherwise be provided in or pursuant to such
Board Resolution or in any such indenture supplemental hereto. All Securities
of any one series need not be issued at the same time and, unless otherwise
provided, a series may be reopened, without the consent of the Holders, for
issuances of additional Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions or supplemental
indentures, a copy of an appropriate record of such action(s) shall be certified
by the Secretary or an Assistant Secretary of the Company and delivered to the
Trustee at or prior to the delivery of the Operating Partnership Order for
authentication and delivery of such Securities.
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<PAGE>
SECTION 302. Denominations. The Securities of each series shall be
-------------
issuable as Bearer Securities, as Registered Securities or in any combination
thereof, and in such denominations and amounts as are specified as contemplated
by Section 301. With respect to any series denominated in Dollars, in the
absence of any such provisions with respect to the Securities of any series, the
Registered Securities of such series, other than Registered Securities issued in
global form (which may be of any denomination), shall be issuable in
denominations of $1,000 and any integral multiple thereof and the Bearer
Securities of such series, other than Bearer Securities issued in global form
(which may be of any denomination), shall be issuable in denominations of
$5,000.
SECTION 303. Execution, Authentication, Delivery and Dating. The
----------------------------------------------
Securities and any coupons appertaining thereto shall be executed on behalf of
the Operating Partnership by the Company in its capacity as general partner of
the Operating Partnership by the Chairman of the Board of Trustees, the
President, a Vice President or the Treasurer of the Company, under the Company's
corporate seal reproduced thereon, and attested by the Company's or one of its
Assistant Secretaries. The Company agrees to execute a Guarantee on each
Guaranteed Security authenticated and delivered by the Trustee. Guarantees
shall be executed on behalf of the Company by the Chairman of the Board of
Trustees, the President, a Vice President or the Treasurer of the Company, under
its corporate seal reproduced thereon, and attested by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers on the
Securities, any related Guarantees and any 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, any related Guarantees and
any coupons.
Any Securities, any related Guarantees or any coupons bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Company shall bind the Operating Partnership or the Company, as the case may
be, notwithstanding that such individuals or any of them have ceased to hold
such offices prior to the authentication and delivery of such Securities or any
related Guarantees or did not hold such offices at the date of such Securities,
any related Guarantees or any coupons.
At any time and from time to time after the execution and delivery of this
Indenture, the Operating Partnership may deliver Securities of any series,
together with any coupons, executed by the Operating Partnership, and together
with any related Guarantees, executed by the Company to the Trustee for
authentication, together with an Operating Partnership Order for the
authentication and delivery of such Securities, and the Trustee shall
authenticate and deliver such Securities in accordance with the Operating
Partnership Order; 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 received such Bearer Security has furnished a
certificate to Euroclear or CEDEL, as the case may be, in 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 prior to the
23
<PAGE>
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.
Except as permitted by Section 306, the Trustee shall not authenticate and
deliver any Bearer Security unless all appurtenant coupons for interest then
matured have been detached and canceled. If all of the Securities of any series
are not to be issued at one time and if the Board Resolution or supplemental
indenture establishing such series so permits, such Operating Partnership 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 the interest rate or formula, maturity date, date of issuance and date
from which interest shall accrue.
In authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, any
related Guarantees and any coupons appertaining thereto, the Trustee shall be
entitled to receive, and (subject to Section 315(a) through 315(d) of the Trust
Indenture Act) shall be fully protected in relying on:
(1) an Opinion of Counsel complying with Section 102 and stating that:
(A) the form or forms of such Securities, any related Guarantees
and any coupons appertaining thereto have been, or will have been upon
compliance with such procedures as may be specified therein,
established in conformity with the provisions of this Indenture;
(B) the terms of such Securities, any related Guarantees and any
coupons appertaining thereto have been, or will have been upon
compliance with such procedures as may be specified therein,
established in conformity with the provisions of this Indenture; and
(C) such Securities, together with any coupons appertaining
thereto, when executed by the Operating Partnership, together with any
related Guarantees, completed pursuant to such procedures as may be
specified therein and delivered by the Operating Partnership 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 Operating Partnership in the manner and
subject to any conditions specified in such Opinion of Counsel, and
any Guarantees endorsed on such Securities, when executed by the
Company and completed pursuant to such procedures as may be specified
therein and delivered together with such Securities as referred to
above, will constitute legal, valid and binding obligations of the
Operating Partnership and the Company, as the case may be, enforceable
in accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization and other similar laws of general
applicability relating to or affecting the enforcement of creditors'
rights generally
24
<PAGE>
and to general equitable principles and to such other matters as may
be specified therein; and
(2) an Operating Partnership Certificate and, if such Securities are
Guaranteed Securities, a Company Certificate, in each case complying with
Section 102 and stating that all conditions precedent provided for in this
Indenture relating to the issuance of such Securities have been, or will
have been upon compliance with such procedures as may be specified therein,
complied with and that, to the best of the knowledge of the signers of such
certificate, no Event of Default with respect to such Securities has
occurred and is continuing.
The Trustee shall not be required to authenticate such Securities if the issue
of such Securities pursuant to this Indenture will affect the Trustee's own
rights, duties, obligations or immunities under the Securities and this
Indenture or otherwise in a manner which is not reasonably acceptable to the
Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all the Securities of any series are not to be issued at one time,
it shall not be necessary to deliver an Operating Partnership Order, an Opinion
of Counsel, an Operating Partnership Certificate or a Company 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, related Guarantee 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 the 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 officer, and such
certificate on 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 has been authenticated and delivered hereunder but never issued and
sold by the Operating Partnership, and the Operating Partnership delivers 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 or sold by the Operating Partnership, for all purposes of this Indenture
such Security and any related Guarantee shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
25
<PAGE>
SECTION 304. Temporary Securities.
--------------------
(a) Pending the preparation of definitive Securities of any series,
the Operating Partnership may execute (and, if such Securities are
Guaranteed Securities, the Company may endorse Guarantees on); and upon an
Operating Partnership 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
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 in global form (which shall
be exchanged in accordance with Section 304(b) or as otherwise provided in
or pursuant to a Board Resolution), if temporary Securities of any series
are issued, the Operating Partnership will cause definitive Securities of
such 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 Operating Partnership in a Place of Payment for
such series, without charge to the Holder. Upon surrender for cancellation
of any one or more temporary Securities of any series, together with any
non-matured coupons appertaining thereto, the Operating Partnership shall
execute and the Trustee shall authenticate and deliver in exchange therefor
a like principal amount of definitive Securities (which, if such Securities
are Guaranteed Securities, shall have the related Guarantees endorsed
thereon) 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 and any related Guarantees or
coupons appertaining thereto of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities
and related Guarantees or coupons appertaining thereto of such series.
(b) Unless otherwise provided as contemplated in Section 301, this
Section 304(b) shall govern the exchange of temporary Securities issued in
global form other than through the facilities of DTC. If any such
temporary Security is issued in global form, then such temporary global
Security shall, unless otherwise provided therein, be delivered to the
London office of a depository or common depository (the "Common
------
Depository"), for the benefit of Euroclear and CEDEL.
----------
26
<PAGE>
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 Operating Partnership shall
-------------
deliver to the Trustee definitive Securities, in an aggregate principal
amount equal to the principal amount of such temporary global Security,
executed by the Operating Partnership (and, if such Securities are
Guaranteed Securities, with the related Guarantees endorsed thereon). On or
after the Exchange Date, such temporary global Security shall be
surrendered by the Common Depository to the Trustee, as the Operating
Partnership'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 the name of Euroclear or CEDEL,
as the case may be, in exchange for each portion of such temporary global
Security, an equal aggregate principal amount of definitive Securities
(which, if such Securities are Guaranteed Securities, shall have the
related Guarantees endorsed thereon) of or within 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 Common Depository; provided, however, that, unless
-------- -------
otherwise specified in such temporary global Security, upon such
presentation by the Common Depository, such temporary global Security shall
be accompanied by a certificate dated the Exchange Date or a subsequent
date and signed by Euroclear as to the portion of such temporary global
Security held for its account then to be exchanged and a certificate dated
the Exchange Date or a subsequent date and signed by CEDEL as to the
portion of such temporary global Security held for its account then to be
exchanged, each in the form set forth in Exhibit A-2 to this Indenture or
in such other form as may be established pursuant to Section 301; and
provided, further, that definitive Bearer Securities shall be delivered in
-------- -------
exchange for a portion of a temporary global Security only in compliance
with the requirements of Section 303.
Unless otherwise specified in such temporary global Security, the
interest of a beneficial owner of Securities of a series in a temporary
global Security shall be exchanged for definitive Securities (which, if
such Securities are Guaranteed Securities, shall have the related
Guarantees endorsed thereon) 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-1 to this Indenture (or in such other form as may be
established pursuant to Section 301), dated no earlier than 15 days prior
to the Exchange Date, copies of which certificate shall be available from
the offices of Euroclear and CEDEL, the Trustee, any Authenticating Agent
appointed for such series of Securities and each Paying Agent. Unless
otherwise specified in such temporary global Security, any such exchange
shall be made free of charge to the beneficial owners of such temporary
global Security, except that a Person receiving definitive Securities must
bear the cost of insurance, postage, transportation and
27
<PAGE>
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-1 to this Indenture (or in such other forms
as may be established pursuant to Section 301). Notwithstanding anything
to the contrary herein contained, the certifications made pursuant to this
paragraph shall satisfy the certification requirements of the preceding two
paragraphs of this Section 304(b) and of the third paragraph of Section 303
of this Indenture and the interests of the Persons who are the beneficial
owners of the temporary global Security with respect to which such
certification was made will be exchanged for definitive Securities (which,
if such Securities are Guaranteed Securities, shall have the related
Guarantees endorsed thereon) 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 has 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
Operating Partnership
SECTION 305. Registration, Registration of Transfer and Exchange. The
---------------------------------------------------
Operating Partnership shall cause to be kept at the Corporate Trust Office of
the Trustee or in any office or agency of the Operating Partnership 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 Operating Partnership 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 Operating Partnership shall provide for the registration of
Registered Securities and of transfers of Registered Securities. The Security
Register shall be in written form or any other form
28
<PAGE>
capable of being converted into written form within a reasonable time. The
Trustee, at its Corporate Trust Office, is hereby initially appointed "Security
--------
Registrar" for the purpose of registering Registered Securities and transfers of
- ---------
Registered Securities on such Security Register as herein provided. In the event
that the Trustee ceases 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 Operating Partnership in a Place of Payment for such series,
the Operating Partnership shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Registered Securities (which, if such Registered Securities are Guaranteed
Securities, shall have the related Guarantees endorsed thereon) of the same
series, of any authorized denominations and of a like aggregate principal
amount, being a number not contemporaneously outstanding, and containing
identical terms and provisions.
Subject to the provisions of this Section 305, at the option of the Holder,
Registered Securities of any series may be exchanged for other Registered
Securities of the same series, of any authorized denomination or denominations
and of a like aggregate principal amount, containing identical terms and
provisions, upon surrender of the Registered Securities to be exchanged at any
such office or agency. Whenever any such Registered Securities are so
surrendered for exchange, the Operating Partnership shall execute, and the
Trustee shall authenticate and deliver, the Registered Securities (which, if
such Registered Securities are Guaranteed Securities, shall have the related
Guarantees endorsed thereon) 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 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 appertaining thereto. 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
Operating Partnership and the Company (if such Bearer Securities are Guaranteed
Securities) 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
Operating Partnership, the Company (if such Bearer Securities are Guaranteed
Securities) and the Trustee if there is furnished to them such security or
indemnity as they may require to save each of them and any Paying Agent
harmless. If thereafter the Holder of such Bearer Security surrenders to any
Paying Agent any such missing coupon in respect of which such a payment has been
made, such Holder shall be entitled to receive the amount of payment; provided,
--------
however, that, except as otherwise provided in Section 1002, interest
- -------
represented by a coupon shall be payable only upon presentation and surrender of
such
29
<PAGE>
coupons at an office or agency located outside the United States.
Notwithstanding the foregoing, in case a Bearer Security of any series is
surrendered at any such office or agency in a permitted exchange for a
Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date or (ii) any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date for payment, as the case may be, and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the Operating Partnership shall execute, and the
Trustee shall authenticate and deliver, the Securities (which, if the Securities
are Guaranteed Securities, shall have the related Guarantees endorsed thereon)
which the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global Security shall be exchangeable
only as provided in this paragraph. If the depository for any permanent global
Security is 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 and approved by the Operating Partnership or to a
nominee of such successor to DTC. If at any time DTC notifies the Operating
Partnership that it is unwilling or unable to continue as depository for the
applicable global Security or Securities or if at any time DTC ceases to be a
clearing agency registered under the Exchange Act if so required by applicable
law or regulation, the Operating Partnership shall appoint a successor
depository with respect to such global Security or Securities. If (i) a
successor depository for such global Security or Securities is not appointed by
the Operating Partnership within 90 days after the Operating Partnership
receives such notice or becomes aware of such unwillingness, inability or
ineligibility, (ii) an Event of Default has occurred and is continuing and the
beneficial owners representing a majority in principal amount of the applicable
series of Securities represented by such global Security or Securities advise
DTC to cease acting as depository for such global Security or Securities or
(iii) the Operating Partnership, in its sole discretion, determines at any time
that all (but not less than all) Outstanding Securities of any series issued or
issuable in the form of one or more global Securities shall no longer be
represented by such global Security or Securities (provided, however, that the
-------- -------
Operating Partnership may not make such determination during the 40-day
restricted period provided by Regulation S under the Securities Act or during
any other similar period during which the Securities must be held in global form
as may be required by the Securities Act), then, upon surrender of the global
Security or Securities appropriately endorsed, the Operating Partnership shall
execute, and the Trustee shall authenticate and deliver definitive Securities
(which, if the Securities are Guaranteed Securities, shall have the related
Guarantee endorsed thereon) of like series, rank, tenor and terms in
30
<PAGE>
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 has been given, then without unnecessary delay but in any event not
earlier than the earliest date on which such interest may be so exchanged, upon
surrender of the global Security or Securities appropriately endorsed the
Operating Partnership shall execute, and the Trustee shall authenticate and
deliver definitive Securities (which, if the Securities are Guaranteed
Securities, shall have the related Guarantees endorsed thereon) in aggregate
principal amount equal to the principal amount of such beneficial owner's
interest in such permanent global Security. On or after the earliest date on
which such interests may be so exchanged, such permanent global Security shall
be surrendered for exchange by DTC or such other depository as is specified in
the Operating Partnership Order with respect thereto to the Trustee, as the
Operating Partnership's agent for such purpose; provided, however, that no such
-------- -------
exchanges may occur during a period beginning at the opening of business 15 days
before any selection of Securities to be redeemed and ending on the relevant
Redemption Date if the Security for which exchange is requested may be among
those selected for redemption; and provided, further, that no Bearer Security
-------- -------
delivered in exchange for a portion of a permanent global Security shall be
mailed or 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 before the opening of business at such office or agency on the
related proposed date for payment of Defaulted Interest, interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of such Registered
Security, but will be payable on such Interest Payment Date or proposed date for
payment, as the case may be, only to the Person to whom interest in respect of
such portion of such permanent global Security is payable in accordance with the
provisions of this Indenture.
All Securities and any related Guarantees issued upon any registration of
transfer or exchange of Securities shall be the valid obligations of the
Operating Partnership and the Company, respectively, evidencing the same debt
and guaranty obligations, and entitled to the same benefits under this
Indenture, as the Securities and related Guarantees surrendered upon such
registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the Operating
Partnership, the Company (if such Registered Securities are Guaranteed
Securities) 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 Operating Partnership may require payment of a
sum sufficient to cover any
31
<PAGE>
tax or other governmental charge which may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 304, 906, 1107 or 1305 not involving any transfer.
The Operating Partnership or the Trustee, as applicable, shall not be
required (i) to issue, register the transfer of or exchange any Security if such
Security may be among those selected for redemption during a period beginning at
the opening of business 15 days before selection of the Securities to be
redeemed under Section 1103 and ending at the close of business on (A) if such
Securities are issuable only as Registered Securities, the day of the mailing of
the relevant notice of redemption and (B) if such Securities are issuable as
Bearer Securities, the day of the first publication of the relevant notice of
redemption or, if such Securities are also issuable as Registered Securities and
there is no publication, the day of the mailing of the relevant notice of
redemption, or (ii) to register the transfer of or exchange any Registered
Security so selected for redemption in whole or in part, except, in the case of
any Registered Security to be redeemed in part, the portion thereof not to be
redeemed, or (iii) to exchange any Bearer Security so selected for redemption
except that such a Bearer Security may be exchanged for a Registered Security of
such series and like tenor, provided that such Registered Security is
--------
simultaneously surrendered for redemption, or (iv) to 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 306. Mutilated, Destroyed, Lost and Stolen Securities. If any
------------------------------------------------
mutilated Security or a Security with a mutilated coupon appertaining thereto is
surrendered to the Trustee or the Operating Partnership, together with, in
proper cases, such security or indemnity as may be required by the Operating
Partnership, the Company (if such Security is a Guaranteed Security) or the
Trustee to save each of them or any of their agents harmless, the Operating
Partnership shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Security (which, if such Security is a Guaranteed
Security, shall have the related Guarantee endorsed thereon) 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 is delivered to the Operating Partnership, the Company (if the
Security is a Guaranteed Security) and to the Trustee (i) evidence to their
satisfaction of the destruction, loss or theft of any Security or coupon, and
(ii) such security or indemnity as may be required by them to save each of them
and any of their agents harmless, then, in the absence of notice to the
Operating Partnership, the Company (if the Security is a Guaranteed Security) or
the Trustee that such Security or coupon has been acquired by a bona fide
purchaser, the Operating Partnership shall execute and upon Operating
Partnership 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 (which, if such Security is a
Guaranteed Security, shall have the related Guarantee endorsed thereon) of the
same series and principal amount, containing identical terms and provisions and
bearing a number not contemporaneously outstanding, with coupons
32
<PAGE>
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 Operating Partnership in its discretion
may, instead of issuing a new Security, with coupons corresponding to the
coupons, if any, appertaining to such destroyed, lost or stolen Security or to
the Security to which such destroyed, lost or stolen coupon appertains, pay such
Security or coupon; provided, however, that payment of principal of (and premium
-------- -------
or Make-Whole Amount, if any, on) and interest and Additional Amounts, if any,
on any Bearer Securities shall, except as otherwise provided in Section 1002, be
payable only at an office or agency located outside the United States and,
unless otherwise specified as contemplated by Section 301, any interest on
Bearer Securities shall be payable only upon presentation and surrender of the
coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the Operating
Partnership may require the payment of a sum sufficient to cover any tax or
other governmental charge which 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, and any related Guarantee and any coupons
appertaining thereto, issued pursuant to this Section in lieu of any destroyed,
lost or stolen Security, or in exchange for a Security to which a destroyed,
lost or stolen coupon appertains, shall constitute an original additional
contractual obligation of the Operating Partnership and the Company (if such
Security is a Guaranteed Security), whether or not the destroyed, lost or stolen
Security and any related Guarantee and any coupons appertaining thereto or the
destroyed, lost or stolen coupon shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of such series, and any
related Guarantee and any coupons appertaining thereto, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved. Except as
----------------------------------------------
otherwise specified with respect to a series of Securities in accordance with
the provisions of Section 301, interest on any Registered Security which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name such Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest at the office or agency of the Operating
Partnership maintained for such purpose pursuant to Section 1002; provided,
--------
however, that each installment of interest on any Registered Security may at the
- -------
Operating Partnership's option be paid by (i) mailing a check for such interest,
payable to or upon the written order of the Person entitled thereto pursuant to
33
<PAGE>
Section 308, to the address of such Person as it appears on the Security
Register or (ii) transfer to an account maintained by the payee located inside
the United States.
Unless otherwise provided as contemplated by Section 301 with respect to
the Securities of any series, payment of interest may be made, in the case of a
Bearer Security, by transfer to an account maintained by the payee with a bank
located outside the United States.
Unless otherwise provided as contemplated by Section 301, every permanent
global Security will provide that interest, if any, payable on any Interest
Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the case may be,
with respect to that portion of such permanent global Security held for its
account by Cede & Co. or the Common Depository, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of beneficial owners
thereof.
In case a Bearer Security of any series is surrendered in exchange for a
Registered Security of such series after the close of business (at an office or
agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
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 which is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date ("Defaulted Interest") shall
------------------
forthwith cease to be payable to the registered Holder thereof upon the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Operating Partnership or the Company (if the
Registered Security is a Guaranteed Security), at its election in each case, as
provided in paragraph (1) or (2) below:
(1) The Operating Partnership or the Company (if the Registered
Security is a Guaranteed Security) may elect to make payment of any
Defaulted Interest to the Persons in whose names the Registered Securities
of such series (or their respective Predecessor Securities) are registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Operating Partnership or the Company, as the case may be, 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 Operating Partnership or the
Company, as the case may be, 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
34
<PAGE>
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 provided in this paragraph. 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 Operating Partnership or the Company, as the case may be, of such
Special Record Date and, in the name and at the expense of the Operating
Partnership or the Company, as the case may be, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of
Registered Securities of such series at such Holder's 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 Operating Partnership or the Company, as the case may be, cause a
similar notice to be published at least once in an Authorized Newspaper in
each place of payment, but such publications shall not be a condition
precedent to the establishment of such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been mailed as aforesaid, such Defaulted Interest shall be
paid to the Persons in whose names the Registered Securities of such series
(or their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to paragraph (2) below. In case a Bearer Security of any series is
surrendered at the office or agency in a Place of Payment for such series
in exchange for a Registered Security of such series after the close of
business at such office or agency on any Special Record Date and before the
opening of business at such office or agency on the related proposed date
for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such proposed date of payment
and Defaulted Interest will not be payable on such proposed date of payment
in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture.
(2) The Operating Partnership or the Company (if the Security is a
Guaranteed Security) may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which such
Securities may be listed, and on such notice as may be required by such
exchange, if, after notice given by the Operating Partnership or Company,
as the case may be, to the Trustee of the proposed payment pursuant to this
paragraph, such manner of payment is deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 305, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of
35
<PAGE>
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners. Prior to due presentment of a
---------------------
Registered Security for registration of transfer, the Operating Partnership, the
Company (if the Registered Security is a Guaranteed Security), the Trustee and
any agent of the Operating Partnership, the Company (if the Registered Security
is a Guaranteed Security) or the Trustee may treat the Person in whose name such
Registered Security is registered as the owner of such Security for the purpose
of receiving payment of principal of (and premium or Make-Whole Amount, if any,
on) and (subject to Sections 305 and 307) interest and Additional Amounts, if
any, on such Registered Security and for all other purposes whatsoever, whether
or not such Registered Security be overdue, and neither the Operating
Partnership, the Company, the Trustee nor any agent of the Operating
Partnership, the Company or the Trustee shall be affected by notice to the
contrary.
Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Operating Partnership, the Company (if the Bearer
Security is a Guaranteed Security), the Trustee and any agent of the Operating
Partnership, the Company (if the Bearer Security is a Guaranteed Security) 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
Operating Partnership, the Company, the Trustee nor any agent of the Operating
Partnership, the Company or the Trustee shall be affected by notice to the
contrary.
None of the Operating Partnership, the Company, the Trustee, any Paying
Agent or the Security Registrar shall have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests of a Security in global form 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 Operating Partnership, the Company (if the global
Security is a Guaranteed Security), the Trustee, or any agent of the Operating
Partnership, the Company (if the global Security is a Guaranteed Security) or
the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by any depository, as a Holder, with respect to such
global Security or impair, as between such depository and owners of beneficial
interests in such global Security, the operation of customary practices
governing the exercise of the rights of such depository (or its nominee) as
Holder of such global Security.
SECTION 309. Cancellation. All Securities and coupons surrendered for
------------
payment, redemption, repayment at the option of the Holder, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee,
and any such Securities and coupons and any Securities and
36
<PAGE>
coupons surrendered directly to the Trustee for any such purpose shall be
promptly canceled by it. The Operating Partnership or the Company (if the
Security is a Guaranteed Security) may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Operating Partnership or the Company (if the Security is a Guaranteed
Security) 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 Operating
Partnership has not issued and sold, and all Securities so delivered shall be
promptly canceled by the Trustee. If the Operating Partnership or the Company
(if the Security is a Guaranteed Security) so acquires 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 canceled as provided
in this Section, except as expressly permitted by this Indenture. Canceled
Securities and coupons held by the Trustee shall be destroyed by the Trustee and
the Trustee shall deliver a certificate of such destruction to the Operating
Partnership and the Company (if the canceled Securities were Guaranteed
Securities) unless the Operating Partnership delivers an Operating Partnership
Order or the Company delivers a Company Order, as the case may be, which directs
their return to it.
SECTION 310. Computation of Interest. Except as otherwise specified as
-----------------------
contemplated by Section 301 with respect to Securities of any series, interest
on the Securities of each series shall be computed on the basis of a 360-day
year consisting of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture. This Indenture
---------------------------------------
shall upon Operating Partnership Request or Company Request (if the Securities
of such series are Guaranteed Securities) cease to be of further effect with
respect to any series of Securities specified in such Operating Partnership
Request or Company Request, as the case may be, (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 an Operating
Partnership Order or Company Order, as the case may be, and at the expense of
the Operating Partnership or the Company, as the case may be, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture as
to such series when:
(1) either:
(A) all Securities of such series theretofore authenticated and
delivered and any coupons appertaining thereto (other than (i) coupons
appertaining to Bearer Securities surrendered for exchange for
Registered Securities and maturing after such exchange, whose
surrender is not required or has been waived as
37
<PAGE>
provided in Section 305, (ii) Securities of such series and coupons
appertaining thereto 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 of such series and
coupons appertaining thereto for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the
Operating Partnership and thereafter repaid to the Operating
Partnership or the Company (if the Securities of such series are
Guaranteed Securities and the money was deposited by the Company) or
discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) all Securities of such series and, in the case of clauses (i)
and (ii) below, any coupons appertaining thereto not theretofore
delivered to the Trustee for cancellation:
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) if redeemable at the option of the Operating
Partnership, 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 Operating Partnership and the Company (if the
Securities of such series are Guaranteed Securities),
and the Operating Partnership or the Company (if the Securities of
such series are Guaranteed Securities), in the case of clause (i),
(ii) or (iii) above, has irrevocably deposited or caused to be
deposited with the Trustee funds in trust for the purpose, in the
currency or currencies, currency unit or units or composite currency
or currencies in which the Securities of such series are payable, and
in an amount sufficient to pay and discharge the entire indebtedness
on such Securities and such coupons not theretofore delivered to the
Trustee for cancellation, for the principal (and premium or Make-Whole
Amount, if any) and interest and Additional Amounts, if any, to the
date of such deposit (in the case of Securities which have become due
and payable) or the Stated Maturity or Redemption Date, as the case
may be;
(2) The Operating Partnership or the Company (if the Securities of
such series are Guaranteed Securities) has paid or caused to be paid all
other sums payable hereunder by the Operating Partnership and the Company;
and
38
<PAGE>
(3) The Operating Partnership has delivered to the Trustee an
Operating Partnership Certificate and an Opinion of Counsel and the Company
has delivered to the Trustee a Company Certificate (if the Securities of
such series are Guaranteed Securities), 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 Operating Partnership and the Company to the Trustee and any
predecessor Trustee under Section 606, the obligations of the Operating
Partnership and the Company to any Authenticating Agent under Section 611 and,
if money has been deposited with and held by the Trustee pursuant to
subparagraph (B) of paragraph (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003, shall survive.
SECTION 402. Application of Trust Funds. Subject to the provisions of the
--------------------------
last paragraph of Section 1003, all money deposited with the Trustee pursuant to
Section 401 shall be held in trust and applied by it, in accordance with the
provisions of the Securities, the coupons and this Indenture, to the payment,
either directly or through any Paying Agent (including the Operating Partnership
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium or Make-Whole Amount, if any)
and interest and Additional Amounts, if any, for the payment of which such money
has been deposited with or received by the Trustee, but such money need not be
segregated from other funds except to the extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default. Subject to any modifications, additions
-----------------
or deletions relating to any series of Securities as contemplated pursuant to
Section 301, "Event of Default," whenever 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 is voluntary or
involuntary or effected by operation of law or pursuant to any judgment, decree
or order of any court or any order, rule or regulation of any administrative or
governmental body):
(1) default in the payment of any interest on or any Additional
Amounts payable in respect of any Security of or within such 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
(2) default in the payment of the principal of (or premium or Make-
Whole Amount, if any, on) any Security of such series when due and payable
at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of any Security of such series; or
39
<PAGE>
(4) default in the performance, or breach, of any covenant or warranty
of the Operating Partnership or the Company (if the Securities of such
series are Guaranteed Securities) in this Indenture or the Guarantee (if
applicable) with respect to any Security of such series (other than a
covenant or warranty a default in the performance of which or the breach of
which is elsewhere specifically provided for in this Section), 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 Operating
Partnership and the Company (if the Securities of such series are
Guaranteed Securities) by the Trustee or to the Operating Partnership, the
Company (if the Securities of such series are Guaranteed Securities) and
the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities of such series, a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
-----------------
(5) default under any bond, debenture, note or other evidence of
indebtedness of the Operating Partnership or the Company (if the Securities
of such series are Guaranteed Securities), or under any mortgage, indenture
or other instrument of the Operating Partnership or the Company (if the
Securities of such series are Guaranteed Securities) (including a default
with respect to Securities of any series other than such series) under
which there may be issued or by which there may be secured any indebtedness
of the Operating Partnership or the Company (if the Securities of such
series are Guaranteed Securities) (or by any Subsidiary, the repayment of
which the Operating Partnership or the Company has guaranteed or for which
the Operating Partnership or the Company (if the Securities of such series
are Guaranteed Securities) is directly responsible or liable as obligor or
guarantor), whether such indebtedness now exists or is hereafter created,
which default constitutes a failure to pay an aggregate principal amount
exceeding $20,000,000 of such indebtedness when due and payable after the
expiration of any applicable grace period with respect thereto and has
resulted in such indebtedness in an aggregate principal amount exceeding
$20,000,000 becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, without such
indebtedness having been discharged, or such acceleration having been
rescinded or annulled, within a period of 10 days after there has been
given, by registered or certified mail, to the Operating Partnership or the
Company, as the case may be, by the Trustee or to the Operating Partnership
or the Company, as the case may be, and the Trustee by the Holders of at
least 10% in principal amount of the Outstanding Securities of such series
a written notice specifying such default and requiring the Operating
Partnership or the Company, as the case may be, to cause such indebtedness
to be discharged or cause such acceleration to be rescinded or annulled and
stating that such notice is a "Notice of Default" hereunder; or
----------------
(6) the entry by a court of competent jurisdiction of one or more
judgments, orders or decrees against the Operating Partnership, the Company
(if the Securities of such series are Guaranteed Securities) or any
Subsidiary of the Operating Partnership or the Company (if the Securities
of such series are Guaranteed Securities) in an aggregate amount (excluding
amounts covered by insurance) in excess of $20,000,000 and such
40
<PAGE>
judgments, orders or decrees remain undischarged, unstayed and unsatisfied
in an aggregate amount (excluding amounts covered by insurance) in excess
of $20,000,000 for a period of 30 consecutive days; or
(7) the Operating Partnership, the Company (if the Securities of such
series are Guaranteed Securities) or any Significant Subsidiary of the
Operating Partnership or the Company (if the Securities of such series are
Guaranteed Securities) pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian of it or for all
or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
or
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Operating Partnership, the Company
(if the Securities of such series are Guaranteed Securities) or any
Significant Subsidiary of the Operating Partnership or the Company (if
the Securities of such series are Guaranteed Securities) in an
involuntary case,
(B) appoints a Custodian of the Operating Partnership, the
Company (if the Securities of such series are Guaranteed Securities)
or any Significant Subsidiary of the Operating Partnership or the
Company (if the Securities of such series are Guaranteed Securities)
or for all or substantially all of its property, or
(C) orders the liquidation of the Operating Partnership, the
Company (if the Securities of such series are Guaranteed Securities)
or any Significant Subsidiary of the Operating Partnership or the
Company (if the Securities of such series are Guaranteed Securities),
and the order or decree remains unstayed and in effect for 90 days; or
(9) any other Event of Default provided with respect to Securities of
that series.
41
<PAGE>
As used in this Section 501, the term "Bankruptcy Law" means Title 11, U.S. Code
--------------
or any similar Federal or state law for the relief of debtors and the term
"Custodian" means any receiver, trustee, assignee, liquidator or other similar
- ----------
official under any Bankruptcy Law.
SECTION 502. Acceleration of Maturity; Rescission and Annulment. If an
--------------------------------------------------
Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case, unless the
principal of all of the Outstanding Securities of such series already has become
due and payable, the Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Securities of such series may declare the principal
(or, if any Securities are Original Issue Discount Securities or Indexed
Securities, such portion of the principal as may be specified in the terms
thereof) of, and the Make-Whole Amount, if any, on, all the Securities of such
series to be due and payable immediately, by a notice in writing to the
Operating Partnership and the Company (if the Securities of such series are
Guaranteed Securities) (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
provided in this Article, the Holders of a majority in principal amount of the
Outstanding Securities of such series, by written notice to the Operating
Partnership, the Company (if the Securities of such series are Guaranteed
Securities) and the Trustee, may rescind and annul such declaration and its
consequences if:
(1) The Operating Partnership or the Company (if the Securities of
such series are Guaranteed Securities) has paid or deposited with the
Trustee a sum sufficient to pay, in the currency, currency unit or
composite currency in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the Securities
of such series):
(A) all overdue installments of interest on and any Additional
Amounts payable in respect of all Outstanding Securities of such
series and any coupons appertaining thereto;
(B) the principal of (and premium or Make-Whole Amount, if any,
on) any Outstanding Securities of such series which have become due
otherwise than by such declaration of acceleration and interest
thereon at the rate or rates borne by or provided for in such
Securities;
(C) to the extent that payment of such interest is lawful,
interest on overdue installments of interest and any Additional
Amounts at the rate or rates borne by or provided for in such
Securities; and
42
<PAGE>
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of such series,
other than the nonpayment of the principal of (or premium or Make-Whole
Amount, if any, on) or interest or Additional Amounts, if any, on
Securities of such 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
resulting therefrom.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee. The Operating Partnership and the Company each covenants that if:
- -------
(1) default is made in the payment of any installment of interest or
Additional Amounts, if any, on any Security of any series or any coupon
appertaining thereto when any such interest or Additional Amount becomes
due and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium or
Make-Whole Amount, if any, on) any Security of any series at its Maturity,
then the Operating Partnership or the Company (if the Securities of such series
are Guaranteed Securities) shall, upon demand of the Trustee, pay to the
Trustee, for the benefit of the Holders of such Securities of such series and
any such coupons, the whole amount then due and payable on such Securities and
any such coupons for principal (and premium or Make-Whole Amount, if any) and
interest and Additional Amounts, if any, with interest on any overdue principal
(and premium or Make-Whole Amount, if any) and, to the extent that payment of
such interest is legally enforceable, on any overdue installments of interest or
Additional Amounts, if any, at the rate or rates borne by or provided for in
such Securities, and, in addition thereto, such further amount as is sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
If the Operating Partnership or the Company (if the Securities of such
series are Guaranteed Securities) fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Operating Partnership, the Company (if the
Securities of such series
43
<PAGE>
are Guaranteed Securities) or any other obligor on the 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
coupons appertaining thereto by such appropriate judicial proceedings as the
Trustee deems most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 504. Trustee May File Proofs of Claim. In case of the pendency of
--------------------------------
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Operating Partnership, the Company (if the Securities of such series are
Guaranteed Securities) or any other obligor on the Securities of such series or
the property of the Operating Partnership, the Company (if the Securities of
such series are Guaranteed Securities) or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
of any series then due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee has made any demand on the
Operating Partnership or the Company (if the Securities of such series are
Guaranteed Securities) for the payment of overdue principal, premium or Make-
Whole Amount, if any, or interest or Additional Amounts, if any) shall be
entitled and empowered, by intervention in such proceeding or otherwise:
(1) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Securities of such series, of
principal (and premium or Make-Whole Amount, if any) and interest and
Additional Amounts, if any, owing and unpaid in respect of the Securities
of such series and to file such other papers or documents and take such
other action, including participating as a member of any official creditors
committee appointed in the matter, as it may deem necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(2) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized by
each Holder of Securities of such series and any coupons appertaining thereto to
make such payments to the Trustee, and in the event that the Trustee consents 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.
44
<PAGE>
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.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities
-----------------------------------------------------------
or Coupons. All rights of action and claims under this Indenture or any of the
- ----------
Securities, any related Guarantees or any coupons may be prosecuted and enforced
by the Trustee without the possession of any of the Securities or coupons or the
production thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the Holders
of the Securities and coupons in respect of which such judgment has been
recovered.
SECTION 506. Application of Money Collected. Any money collected by the
------------------------------
Trustee pursuant to this Article shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium or Make-Whole Amount, if any) or
interest or Additional Amounts, if any, on 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:
(1) to the payment of all amounts due the Trustee and any predecessor
Trustee under Section 606;
(2) to the payment of the amounts then due and unpaid on the
Securities and coupons for principal (and premium or Make-Whole Amount, if
any) and interest and Additional Amounts, if any, 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 or Make-Whole Amount, if any) and interest and Additional Amounts,
if any, respectively; and
(3) to the payment of the remainder, if any, to the Operating
Partnership or the Company, as the case may be.
SECTION 507. Limitation on Suits. No Holder of any Security of any
-------------------
series or any coupon appertaining thereto shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of such
series;
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<PAGE>
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of such series have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of such series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
------------------------------------------------------------
or Make-Whole Amount, 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 or Make-Whole Amount, if any, on ) and (subject to
Sections 305 and 307) interest and Additional Amounts, if any, on such Security
or payment of such coupon on or after the respective due dates expressed in such
Security or coupon (or, in the case of redemption, on the Redemption Date) and
to institute suit for the enforcement of any such payment, and such rights shall
not be impaired or affected without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies. If the Trustee or any
----------------------------------
Holder of a Security or coupon has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case the Operating Partnership, the
Company (if the Security is a Guaranteed Security), the Trustee and the Holders
of Securities and coupons shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative. Except as otherwise
------------------------------
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities or coupons in the last paragraph of Section 306, no
right or remedy herein conferred on or reserved
46
<PAGE>
to the Trustee or to the Holders of Securities or coupons is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver. No delay or omission of the
----------------------------
Trustee or of any Holder of any Security or coupon to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Securities or coupons, as the
case may be.
SECTION 512. Control by Holders of Securities. The Holders of not less
--------------------------------
than a majority in principal amount of the Outstanding Securities of any series
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee, with respect to the Securities of such series,
provided that:
- --------
(1) such direction is not in conflict with any rule of law or with
this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the Holders of Securities of
such series not joining therein (but the Trustee shall have no obligation
as to the determination of such undue prejudice).
SECTION 513. Waiver of Past Defaults. The Holders of not less than a
-----------------------
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all the Securities of such series and any coupons
appertaining thereto waive any past default hereunder with respect to such
series and its consequences, except a default:
(1) in the payment of the principal of (or premium or Make-Whole
Amount, if any, on) or interest or Additional Amounts, if any, on any
Security of such series or any coupons appertaining thereto, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected thereby.
47
<PAGE>
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 resulting therefrom.
SECTION 514. Waiver of Usury, Stay or Extension Laws. The Operating
---------------------------------------
Partnership and the Company each covenants (to the extent which it may lawfully
do so) that it will not at any time insist on, 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 Operating
Partnership and the Company each (to the extent which it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it shall not hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the execution of every such
power as though no such law had been enacted.
SECTION 515. Undertaking for Costs. All parties to this Indenture agree,
---------------------
and each Holder of any Security by such Holder's 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 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, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium or Make-Whole Amount,
if any, on) or interest or Additional Amounts, if any, on any Security on or
after the respective Stated Maturities expressed in such Security (or, in the
case of redemption, on or after the Redemption Date).
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults. Within 90 days after the occurrence of
------------------
any default hereunder with respect to the Securities of any series, the Trustee
shall give to the Holders, in the manner and to the extent provided in Section
313(c) of the Trust Indenture Act, notice of such default hereunder known to the
Trustee, unless such default has been cured or waived; provided, however, that,
-------- -------
except in the case of a default in the payment of the principal of (or premium
or Make-Whole Amount, if any, on) or interest or Additional Amounts, if any, on
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 interests of
the Holders of the Securities and coupons of such series; and
48
<PAGE>
provided, further, that in the case of any default or breach of the character
- -------- -------
specified in clause (4) of Section 501 with respect to the Securities of such
series and any coupons appertaining thereto, no such notice to Holders shall be
given until at least 60 days after the occurrence thereof. For the purposes of
this Section, the term "default" means any event which is, or after notice or
-------
lapse of time or both would become, an Event of Default with respect to the
Securities of such series.
SECTION 602. Certain Rights of Trustee. Subject to the provisions of
-------------------------
Section 315(a) through 315(d) of the Trust Indenture Act:
(1) the Trustee shall perform only such duties as are expressly
undertaken by it to perform under this Indenture;
(2) 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;
(3) any request or direction of the Operating Partnership mentioned
herein shall be sufficiently evidenced by an Operating Partnership Request
or Operating Partnership Order or of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (in each case,
other than delivery of any Security, together with any related Guarantee
and 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 Trustees shall be
sufficiently evidenced by a Board Resolution;
(4) whenever, in the administration of this Indenture, the Trustee
deems it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence is specifically prescribed herein) may, in the absence of bad
faith on its part, rely on an Operating Partnership Certificate or, if such
matter pertains to the Company, a Company Certificate;
(5) the Trustee may consult with counsel and the 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;
(6) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities of any series or any coupons
appertaining thereto pursuant to this Indenture, unless such Holders have
offered to the Trustee reasonable security or indemnity against
49
<PAGE>
the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(7) 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, but the Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee determines to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Operating Partnership and the Company,
personally or by agent or attorney;
(8) 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;
(9) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and reasonably believed by it to be authorized
or within the discretion or rights or powers conferred on it by this
Indenture;
(10) the Trustee shall not be deemed to have knowledge of any event or
fact upon the occurrence of which it may be required to take action
hereunder unless it has actual knowledge of the occurrence of such event or
fact; and
(11) 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
has reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it.
SECTION 603. Not Responsible for Recitals or Issuance of Securities. The
------------------------------------------------------
recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, in any related Guarantees and in any coupons
shall be taken as the statements of the Operating Partnership or the Company (if
the Securities are Guaranteed Securities), as the case may be, 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, any related Guarantees or
any coupons, except that the Trustee represents which 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 Operating Partnership of
Securities or the proceeds thereof.
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SECTION 604. May Hold Securities. The Trustee, any Paying Agent,
-------------------
Security Registrar, Authenticating Agent or any other agent of the Operating
Partnership or the Company, in its individual or any other capacity, may become
the owner or pledgee of Securities and coupons and, subject to Sections 310(b)
and 311 of the Trust Indenture Act, may otherwise deal with the Operating
Partnership or the Company with the same rights it would have if it were not
Trustee, Paying Agent, Security Registrar, Authenticating Agent or such other
agent.
SECTION 605. Money Held in Trust. Money held by the Trustee in trust
-------------------
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on, or investment
of, any money received by it hereunder except as otherwise agreed with and for
the sole benefit of the Operating Partnership or the Company.
SECTION 606. Compensation and Reimbursement. The Operating Partnership
------------------------------
and the Company each agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse each
of the Trustee and any predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by it in
connection with its administration of the trust hereunder (including the
reasonable compensation and the expenses and disbursements of its agents
and counsel), except to the extent any such expense, disbursement or
advance may be attributable to its negligence or bad faith; and
(3) to indemnify each of the Trustee and any predecessor Trustee for,
and to hold it harmless against, any loss, liability or expense, arising
out of or in connection with the acceptance or administration of the trust
or trusts or the performance of its duties 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 except to the extent any such loss, liability or expense may be
attributable to its own negligence or bad faith.
As security for the performance of the obligations of the Operating
Partnership and the Company under this Section, the Trustee shall have a lien
prior to the Securities on all property and funds held or collected by the
Trustee as such, except funds held in trust for the payment of principal of (or
premium or Make-Whole Amount, if any, on) or interest or Additional Amounts, if
any, on particular Securities or any coupons.
The provisions of this Section shall survive the termination of this
Indenture.
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SECTION 607. Trustee Eligibility; Conflicting Interests. There shall at
------------------------------------------
all times be a Trustee hereunder which is eligible to act as Trustee under
Section 310(a)(1) of the Trust Indenture Act and has a combined capital and
surplus of at least $50,000,000. If such Trustee publishes reports of condition
at least annually, pursuant to law or the requirements of Federal, State,
Territorial or District of Columbia supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of such Trustee
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. No obligor on the Securities or
Affiliate of any such obligor shall serve as Trustee on such Securities. If at
any time the Trustee ceases to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 608. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 609.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Operating
Partnership and the Company (if the Securities of such series are
Guaranteed Securities). If an instrument of acceptance by a successor
Trustee has not been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series delivered to the
Trustee and to the Operating Partnership and the Company (if the Securities
of such series are Guaranteed Securities).
(d) If at any time:
(1) the Trustee fails to comply with the provisions of Section
310(b) of the Trust Indenture Act after written request therefor by
the Operating Partnership, the Company (if any of the Securities are
Guaranteed Securities) or any Holder of a Security who has been a bona
fide Holder of a Security for at least six months, or
(2) the Trustee ceases to be eligible under Section 607 and fails
to resign after written request therefor by the Operating Partnership,
the Company (if any of the Securities are Guaranteed Securities) or
any Holder of a Security who has been a bona fide Holder of a Security
for at least six months, or
52
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(3) the Trustee becomes incapable of acting or is adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property
is appointed or any public officer takes 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 Operating Partnership or the Company (if
any of the Securities are Guaranteed Securities) 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 Section 315(e) of the Trust
Indenture Act, any Holder of a Security who has been a bona fide Holder of
a Security for at least six months may, on behalf of such Holder and all
others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee with respect to all Securities and the
appointment of a successor Trustee or Trustees.
(e) If the Trustee resigns, is removed or becomes incapable of acting,
or if a vacancy occurs in the office of Trustee for any cause with respect
to the Securities of one or more series, the Operating Partnership and the
Company, by or pursuant to a Board Resolution, shall promptly appoint a
successor Trustee or Trustees with respect to the Securities of such series
(it being understood that any such successor Trustee may be appointed with
respect to the Securities of one or more or all of such series and that at
any time there shall be only one Trustee with respect to the Securities of
any particular series). If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor
Trustee with respect to the Securities of any series is appointed by Act of
the Holders of a majority in principal amount of the Outstanding Securities
of such series delivered to the Operating Partnership, the Company (if the
Securities are of such series are Guaranteed Securities) 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 has been so appointed by the Operating
Partnership, the Company (if the Securities of such series are Guaranteed
Securities) 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 such Holder and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to Securities of such series.
(f) The Operating Partnership 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.
53
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SECTION 609. Acceptance of Appointment by Successor.
--------------------------------------
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee shall execute,
acknowledge and deliver to the Operating Partnership, the Company and 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 Operating Partnership, the Company
or the successor Trustee, such retiring Trustee shall, upon payment of its
charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee, and
shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder, subject
nevertheless to its claim, if any, provided for in Section 606.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the
Operating Partnership, the Company (if the Securities of any such series
are Guaranteed Securities), 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 (i) shall
contain such provisions as are 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
such series to which the appointment of such successor Trustee relates,
(ii) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as are necessary or desirable to
confirm that all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of such series as to which the
retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee and (iii) shall add to or change any of the provisions of
this Indenture as are 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 such series to which the appointment of such successor
Trustee relates; but, on request of the Operating Partnership, the Company
(if the Securities of any such series are Guaranteed Securities) 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 such series to
which the appointment of such successor Trustee relates.
54
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(c) Upon request of any such successor Trustee, the Operating
Partnership and the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts referred to in paragraph (a) or (b) of this
Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 610. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such
--------
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities or coupons 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 have not been
authenticated by such predecessor Trustee, any such successor Trustee may
authenticate and deliver such Securities or coupons, in either its own name or
that of its predecessor Trustee, with the full force and effect which this
Indenture provides for the certificate of authentication of the Trustee.
SECTION 611. Appointment of Authenticating Agent. At any time when any of
-----------------------------------
the Securities remain Outstanding, the Trustee may appoint an Authenticating
Agent or Agents with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series issued upon exchange, registration of transfer or partial redemption or
repayment thereof, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee hereunder. Any such appointment shall be
evidenced by an instrument in writing signed by a Responsible Officer of the
Trustee, a copy of which instrument shall be promptly furnished to the Operating
Partnership and the Company (if the Securities of any such series are Guaranteed
Securities). Whenever 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 Operating Partnership and
the Company and, except as may otherwise be provided pursuant to Section 301,
shall at all times be a bank or trust company or corporation organized and doing
business and in good standing under the laws of the United States of America or
of any State or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or State or
District of Columbia authorities. If such Authenticating Agent publishes
55
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reports of condition at least annually, pursuant to law or the requirements of
the aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Authenticating Agent shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time an Authenticating Agent
ceases to be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
is 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 is otherwise eligible under this
Section, without the execution or filing of any paper or further act on the part
of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time resign
by giving written notice of resignation to the Trustee for such series and to
the Operating Partnership and the Company (if the Securities of such series are
Guaranteed Securities). 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 Operating Partnership and
the Company (if the Securities of such series are Guaranteed Securities). Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time such Authenticating Agent ceases to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Operating Partnership and
the Company and shall give notice of such appointment to all Holders of
Securities of or within the series with respect to which such Authenticating
Agent will serve in the manner set forth in Section 106. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent herein. No
successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Operating Partnership and the Company each agrees to pay to each
Authenticating Agent from time to time reasonable compensation including
reimbursement of its reasonable expenses for its services under this Section.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
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[NAME OF TRUSTEE],
as Trustee
By:_______________________________,
as Authenticating Agent
By:_______________________________
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE,
OPERATING PARTNERSHIP AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders. Every Holder
--------------------------------------------
of Securities, any related Guarantees or any coupons, by receiving and holding
the same, agrees with the Operating Partnership, the Company and the Trustee
that neither the Operating Partnership nor 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 Section 312 of the
Trust Indenture Act, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under Section 312(b) of the Trust
Indenture Act.
SECTION 702. Reports by Trustee. Within 60 days after February 1 of each
------------------
year commencing with the first February 1 after the first issuance of Securities
pursuant to this Indenture, the Trustee shall transmit by mail to all Holders of
Securities as provided in Section 313(c) of the Trust Indenture Act a brief
report dated as of such February 1 if required by Section 313(a) of the Trust
Indenture Act.
SECTION 703. Reports by Operating Partnership and Company. The Operating
--------------------------------------------
Partnership and the Company shall:
(1) file with the Trustee, within 15 days after the Operating
Partnership or the Company, as the case may be, 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 by rules and regulations prescribe)
which the Operating Partnership or the Company, as the case may be, is
required to file with the Commission pursuant to Section 13 or Section
15(d) of the Exchange Act; or, if the Operating Partnership or the Company,
as the case may be, is not required to file information, documents or
reports pursuant to either of such Sections, then it shall file with the
Trustee and the Commission, in accordance with rules and
57
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regulations prescribed by the Commission, such of the supplementary and
periodic information, documents and reports which may be required pursuant
to Section 13 of the Exchange Act in respect of a security listed and
registered on a national securities exchange as may be prescribed in such
rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed by the Commission, such additional information,
documents and reports with respect to compliance by the Operating
Partnership or the Company, as the case may be, with the conditions and
covenants provided for in this Indenture, as may be required by such rules
and regulations; and
(3) transmit by mail to the Holders of Securities, within 30 days
after the filing thereof with the Trustee, in the manner and to the extent
provided in Section 313(c) of the Trust Indenture Act, such summaries of
any information, documents and reports required to be filed by the
Operating Partnership or the Company pursuant to subparagraphs (1) and (2)
of this Section as may be required by rules and regulations prescribed by
the Commission.
SECTION 704. Operating Partnership and Company to Furnish Trustee Names
----------------------------------------------------------
and Addresses of Holders. The Operating Partnership and the Company (if the
- ------------------------
Securities of such series are Guaranteed Securities) shall furnish or cause to
be furnished to the Trustee:
(a) semi-annually, not later than 15 days after the Regular Record
Date for interest for each series of Securities, a list, in such form as
the Trustee may reasonably require, of the names and addresses of the
Holders of Registered Securities of such series as of such Regular Record
Date, or if there is no Regular Record Date for interest for such series of
Securities, semi-annually, on such dates as are set forth in the Board
Resolution or indenture supplemental hereto authorizing such series, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Operating Partnership or the Company (if
the Securities of such series are Guaranteed Securities) of any such
request, a list of similar form and content as of a date not more than 15
days prior to the time such list is furnished;
provided, however, that, so long as the Trustee is the Security Registrar, no
- -------- -------
such list shall be required to be furnished.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations, Mergers, Sales, Leases and Conveyances of
---------------------------------------------------------
Operating Partnership Permitted Subject to Certain Conditions. The Operating
- -------------------------------------------------------------
Partnership may consolidate with, or sell, lease or convey all or substantially
all of its assets to, or merge with or into any
58
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other Person, provided that in any such case, (i) either the Operating
Partnership shall be the continuing entity, or the successor entity (if other
than the Operating Partnership) shall be a Person organized and existing under
the laws of the United States or a State thereof and such successor entity
expressly assumes the due and punctual payment of the principal of (and premium
or Make-Whole Amount, if any, on) and interest and Additional Amounts, if any,
on all of the Securities, according to their tenor, and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed by the Operating Partnership by supplemental
indenture, complying with Article Nine, satisfactory to the Trustee, executed
and delivered to the Trustee by such Person and (ii) immediately after giving
effect to such transaction and treating any indebtedness which becomes an
obligation of the Operating Partnership, the successor entity (if other than the
Operating Partnership) or any Subsidiary as a result thereof as having been
incurred by the Operating Partnership, such successor entity 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, has
occurred and is continuing.
SECTION 802. 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 entity, such successor entity shall succeed to and be substituted
for the Operating Partnership, with the same effect as if it had been originally
named herein as the Operating Partnership, and the predecessor entity, except in
the event of a lease, shall be relieved of any further obligation under this
Indenture and the Securities. Such successor entity thereupon may cause to be
signed, and may issue either in its own name or in the name of the Operating
Partnership, any or all of the Securities issuable hereunder which theretofore
have not been signed by the Operating Partnership and delivered to the Trustee;
and, upon the order of such successor entity, instead of the Operating
Partnership, and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any
Securities which previously have been signed and delivered by the officers of
the Operating Partnership to the Trustee for authentication, and any Securities
which such successor entity thereafter shall cause to be signed and delivered to
the Trustee for that purpose. All the Securities so issued shall in all
respects have the same legal rank and benefit under this Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Securities had been issued at the date of the
execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance, such
changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
SECTION 803. Operating Partnership 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 Operating
Partnership Certificate and an Opinion of Counsel to the effect that any such
consolidation, merger, sale, lease or conveyance, and the assumption by any
successor entity, complies with the provisions of this Article and that all
conditions precedent herein provided for relating to such transaction have been
complied with.
59
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Except as provided in Section 804, any consolidation, merger, sale, lease
or conveyance permitted under Section 801 is also subject to the condition that
the Trustee receive a Company Certificate and an Opinion of Counsel, each
stating that the Company's obligations hereunder shall remain in full force and
effect thereafter.
SECTION 804. Consolidations, Mergers, Sales, Leases and Conveyances of
---------------------------------------------------------
Company Permitted Subject to Certain Conditions. The Company may consolidate
- -----------------------------------------------
with, or sell, lease or convey all or substantially all of its assets to, or
merge with or into any other Person, provided that in any such case, (i) either
the Company shall be the continuing entity, or the successor entity (if other
than the Company) shall be a Person organized and existing under the laws of the
United States or a State thereof and such successor entity expressly assumes the
obligations of the Company under the Guarantees and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed by the Company by supplemental indenture, complying
with Article Nine and, satisfactory to the Trustee, executed and delivered to
the Trustee by such Person and (ii) immediately after giving effect to such
transaction and treating any indebtedness which becomes an obligation of the
Company, the successor entity (if other than the Operating Partnership) or any
Subsidiary as a result thereof as having been incurred by the Company, such
successor entity 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, has occurred and is continuing.
SECTION 805. Rights and Duties of Successor Corporation. In case of any
------------------------------------------
such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor entity, such successor entity shall succeed to and
be substituted for the Company, with the same effect as if it had been
originally named herein as the Company, and the predecessor entity, except in
the event of a lease, shall be relieved of any further obligation under this
Indenture and the Guarantees.
SECTION 806. Company Certificate and Opinion of Counsel. Any
------------------------------------------
consolidation, merger, sale, lease or conveyance permitted under Section 804 is
also subject to the condition that the Trustee receive a Company Certificate and
an Opinion of Counsel to the effect that any such consolidation, merger, sale,
lease or conveyance, and the assumption by any successor entity, complies with
the provisions of this Article and that all conditions precedent herein provided
for relating to such transaction have been complied with.
SECTION 807. Assumption by Company. The Company, or a subsidiary thereof
---------------------
that is a corporation, may directly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, the
due and punctual payment of the principal of (and premium or Make-Whole Amount,
if any, on) and interest and Additional Amounts, if any, on all the Guaranteed
Securities and the performance of every covenant of this Indenture on the part
of the Operating Partnership to be performed or observed. Upon any such
assumption, the Company or such subsidiary shall succeed to and be substituted
for, and may exercise every right and power of, the Operating Partnership under
this Indenture with the same effect as if the Company or such subsidiary had
been named as the Operating Partnership herein
60
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and the Operating Partnership shall be released from all obligations and
covenants with respect to the Guaranteed Securities. No such assumption shall be
permitted unless the Company has delivered to the Trustee (i) a Company
Certificate and an Opinion of Counsel, each stating that such assumption and
supplemental indenture comply with this Article, and that all conditions
precedent herein provided for relating to such transaction have been complied
with and that, in the event of assumption by a subsidiary, the Guarantees and
all other covenants of the Company herein remain in full force and effect and
(ii) an opinion of independent counsel that the Holders of Guaranteed Securities
or any coupons (assuming such Holders are only taxed as residents of the United
States) shall have no United States Federal tax consequences as a result of such
assumption and, if any Securities are then listed on the New York Stock
Exchange, that such Securities shall not be delisted as a result of such
assumption.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders. Without
--------------------------------------------------
the consent of any Holders of Securities or coupons, the Operating Partnership
and the Company, when authorized by or pursuant to a Board Resolution, and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(1) to evidence the succession of another Person to the Operating
Partnership or the Company and the assumption by any such successor of the
covenants of the Operating Partnership or the Company, as the case may be,
contained herein and in the Securities or any related Guarantees, as the
case may be; or
(2) to add to the covenants of the Operating Partnership or 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 on the Operating Partnership or the Company; or
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such Events of Default
are to be for the benefit of less than all series of Securities, stating
that such Events of Default are expressly being included solely for the
benefit of such series); provided, however, that, in respect of any such
-------- -------
additional Events of Default, such supplemental indenture may provide for a
particular period of grace after default (which period may be shorter or
longer than that allowed in the case of other defaults) or may provide for
an immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default or may limit the right of the
Holders of a majority in aggregate principal amount of such series of
Securities to which such additional Events of Default apply to waive such
default; or
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(4) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to
change or eliminate any restrictions on the payment of the principal of
(or premium or Make-Whole Amount, if any, on) or interest or Additional
Amounts, if any, on Bearer Securities, to permit Bearer Securities to be
issued in exchange for Registered Securities, to permit Bearer Securities
to be issued in exchange for Bearer Securities of other authorized
denominations or to permit or facilitate the issuance of Securities in
uncertificated form, provided that any such action shall not adversely
--------
affect the interests of the Holders of Securities of any series or any
coupons appertaining thereto in any material respect; or
(5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only
--------
when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit
of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series and any
coupons appertaining thereto as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as are necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee; or
(9) to cure any ambiguity, to correct or supplement any provision
hereof which may be defective or inconsistent with any other provision
hereof, 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 or to make any other changes, provided
--------
that, in each case, such provisions shall not adversely affect the
interests of the Holders of Securities of any series or any coupons
appertaining thereto in any material respect; or
(10) to close this Indenture with respect to the authentication and
delivery of additional series of Securities or to qualify, or maintain
qualification of, this Indenture under the Trust Indenture Act; or
(11) to supplement any of the provisions of this Indenture to such
extent as is necessary to permit or facilitate the defeasance and discharge
of any series of Securities pursuant to Sections 401, 1402 and 1403;
provided that, in each case, any such action shall not adversely affect the
--------
interests of the Holders of Securities of such series and any coupons
appertaining thereto or any other series of Securities in any material
respect; or
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(12) to effect the assumption by the Company or a subsidiary thereof
pursuant to Section 807.
SECTION 902. Supplemental Indentures with Consent of Holders. With the
-----------------------------------------------
consent of the Holders of not less than a majority in principal amount of all
Outstanding Securities affected by such supplemental indenture, by Act of such
Holders delivered to the Operating Partnership, the Company (if the Securities
of any such series are Guaranteed Securities) and the Trustee, the Operating
Partnership and 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 coupons
under this Indenture; provided, however, that no such supplemental indenture
-------- -------
shall, without the consent of the Holder of each Outstanding Security affected
thereby:
(1) change the Stated Maturity of the principal of (or premium or
Make-Whole Amount, if any, on) or any installment of principal of or
interest on, any Security; or reduce the principal amount thereof or the
rate or amount of interest thereon or any Additional Amounts payable in
respect thereof, or any premium or Make-Whole Amount payable upon the
redemption thereof, or change any obligation of the Operating Partnership
to pay Additional Amounts pursuant to Section 1010 (except as contemplated
by clause (1) of Section 801 and permitted by clause (1) of Section 901),
or reduce the amount of the principal of an Original Issue Discount
Security or Make-Whole Amount, if any, which would be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section
502 or the amount thereof provable in bankruptcy pursuant to Section 504;
or adversely affect any right of repayment at the option of the Holder of
any Security, or change any Place of Payment where, or the currency or
currencies, currency unit or units or composite currency or currencies in
which, the principal of any Security or any premium or Make-Whole Amount or
any Additional Amounts payable in respect thereof 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
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of the Holders of which is required
for any such supplemental indenture, or the consent of the Holders of which
is required for any waiver with respect to such series (or compliance with
certain provisions of this Indenture or certain defaults hereunder and
their consequences) provided for in this Indenture, or reduce the
requirements of Section 1504 for quorum or voting;
(3) modify or affect in any manner adverse to the Holders the terms
and conditions of the obligations of the Company under the related
Guarantees in respect of the due and punctual payments of the principal of
(or premium or Make-Whole Amount, if any, on) or interest or Additional
Amounts, if any, on any Guaranteed Securities; or
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(4) modify any of the provisions of this Section, Section 513 or
Section 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.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act approves the substance thereof.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included for the benefit of
one or more particular series of Securities, or which modifies the rights of the
Holders of Securities of such series with respect to such covenant or other
provision, shall be deemed not to affect the rights under this Indenture of the
Holders of Securities of any other series.
SECTION 903. Execution of Supplemental Indentures. In executing, or
------------------------------------
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and shall be fully
protected in relying on, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures. Upon the execution of
---------------------------------
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder and of any coupon appertaining
thereto shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act. Every supplemental
-----------------------------------
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall, if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Operating Partnership so
determines, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Operating Partnership, to any such supplemental
indenture may be prepared and executed by the Operating Partnership and
authenticated and delivered by the Trustee (and, if such Securities are
Guaranteed Securities, with the related Guarantees endorsed thereon) in exchange
for Outstanding Securities of such series.
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SECTION 907. Notice of Supplemental Indentures. Promptly after the
---------------------------------
execution by the Operating Partnership, the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902, the Operating
Partnership shall give notice thereof to the Holders of each Outstanding
Security affected, in the manner provided for in Section 106, setting forth in
general terms the substance of such supplemental indenture.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium or Make-Whole Amount,
--------------------------------------------------
Interest and Additional Amounts. The Operating Partnership covenants and agrees
- -------------------------------
for the benefit of the Holders of each series of Securities that it shall duly
and punctually pay the principal of (and premium or Make-Whole Amount, if any,
on) and interest and Additional Amounts, if any, on the Securities of such
series in accordance with the terms of such series of Securities, any coupons
appertaining thereto and this Indenture. Unless otherwise specified as
contemplated by Section 301 with respect to any series of Securities, any
interest and Additional Amounts, if any, on 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 or Make-Whole Amount, if any, on)
such a 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. Unless otherwise specified with respect to Securities of any
series pursuant to Section 301, at the option of the Operating Partnership, all
payments of principal may be paid by check to the registered Holder of the
Registered Security or other person entitled thereto against surrender of such
Security.
SECTION 1002. Maintenance of Office or Agency. If Securities of a series
-------------------------------
are issuable only as Registered Securities, the Operating Partnership and the
Company (if the Securities of any such series are Guaranteed Securities) shall
maintain in each Place of Payment for any series of Securities an office or
agency where Securities of such series may be presented or surrendered for
payment, where Securities of such series may be surrendered for registration of
transfer or exchange and where notices and demands to or on the Operating
Partnership or the Company (if the Securities of any such series are Guaranteed
Securities) in respect of the Securities of such series and any related
Guarantees and this Indenture may be served. If Securities of a series are
issuable as Bearer Securities, the Operating Partnership and the Company (if
Guaranteed Securities) shall maintain: (i) in the city of
______________________, _______________, an office or agency where any
Registered Securities of such series may be presented or surrendered for
payment, where any Registered Securities of such series may be surrendered for
exchange, where notices and demands to or on the Operating Partnership or the
Company in respect of the Securities of such series and this Indenture may be
served and where Bearer Securities of such series and any coupons appertaining
thereto may be presented or surrendered for payment in the circumstances
described in the following paragraph (and not otherwise); (ii) subject to any
laws or regulations applicable thereto, in a Place of Payment for such series
which is located outside the United States, an office or agency where Securities
of such series and any coupons
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<PAGE>
appertaining thereto may be presented and surrendered for payment (including
payment of any Additional Amounts payable on Securities of such series pursuant
to Section 1010); provided, however, that if the Securities of such series are
-------- -------
listed on the Luxembourg Stock Exchange, The International Stock Exchange or any
other stock exchange located outside the United States and such stock exchange
so requires, the Operating Partnership and the Company (if the Securities of any
such series are Guaranteed Securities) shall maintain a Paying Agent for the
Securities of such series in Luxembourg, London or any other required city
located outside the United States, as the case may be, so long as the Securities
of such series are listed on such exchange; and (iii) subject to any laws or
regulations applicable thereto, in a Place of Payment for such series located
outside the United States an office or agency where any Securities of such
series may be surrendered for registration of transfer, where Securities of such
series may be surrendered for exchange and where notices and demands to or on
the Operating Partnership in respect of the Securities of such series and this
Indenture may be served. The Operating Partnership or the Company (if the
Securities of any such series are Guaranteed Securities) 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 Operating Partnership or the
Company fails to maintain any such required office or agency or fails 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 such series and the related coupons may be
presented and surrendered for payment (including payment of any Additional
Amounts payable on Bearer Securities of such series pursuant to Section 1010) at
the offices specified in the Security, in London, England, and the Operating
Partnership and the Company hereby appoint the same as its agent to receive all
such presentations, surrenders, notices and demands, and the Operating
Partnership and the Company hereby appoint the Trustee as 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 the principal of (or premium or Make-Whole Amount, if
any, on) or interest or Additional Amounts, if any, on Bearer Securities shall
be made at any office or agency of the Operating Partnership or 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 the principal of (and premium and Make-Whole Amount, if any, on) and
interest and Additional Amounts; if any, on any Bearer Security shall be made at
the office of the Operating Partnership's Paying Agent in the city of
_____________, _____________, if (but only if) payment in Dollars of the full
amount of such principal, premium, Make-Whole Amount, interest or Additional
Amounts, as the case may be, at all offices or agencies outside the United
States maintained for the purpose by the Operating Partnership in accordance
with this Indenture, is illegal or effectively precluded by exchange controls or
other similar restrictions.
The Operating Partnership or the Company (if the Securities of any such
series are Guaranteed Securities) may from time to time designate one or more
other offices or agencies where the Securities of one or more series and any
coupons appertaining thereto, may be presented or surrendered for any or all of
such purposes, and may from time to time rescind
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such designations; provided, however, that no such designation or rescission
-------- -------
shall in any manner relieve the Operating Partnership or the Company (if the
Securities of any such series are Guaranteed Securities) 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 Operating Partnership or the
Company (if the Securities of any such series are Guaranteed Securities) 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, the
Operating Partnership and the Company each hereby designates as a Place of
Payment for each series of Securities the office or agency of the Operating
Partnership or the Company (if the Securities of any such series are Guaranteed
Securities), as the case may be, in the city of ______, _____________, 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 (i) are denominated
in a Foreign Currency or (ii) may be payable in a Foreign Currency, or so long
as it is required under any other provision of the Indenture, then the Operating
Partnership will maintain with respect to each such series of Securities, or as
so required, at least one exchange rate agent.
SECTION 1003. Money for Securities Payments to Be Held in Trust. If the
-------------------------------------------------
Operating Partnership at any time acts as its own Paying Agent with respect to
any series of any Securities and any coupons appertaining thereto, it shall, on
or before each due date of the principal of (and premium or Make-Whole Amount,
if any, on) or interest or Additional Amounts, if any, on any of the Securities
of such series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) sufficient to pay the principal (and premium or Make-
Whole Amount, if any) or interest or Additional Amounts, if any, so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided, and shall promptly notify the Trustee of its action or failure so to
act.
Whenever the Operating Partnership shall have one or more Paying Agents for
any series of Securities and any coupons appertaining thereto, it shall, on or
before each due date of the principal of (and premium or Make-Whole Amount, if
any, on) or interest or Additional Amounts, if any, on any Securities of such
series, deposit with a Payment Agent a sum (in the currency or currencies,
currency unit or units or composite currency or currencies described in the
preceding paragraph) sufficient to pay the principal (and premium or Make-Whole
Amount, if any) or interest or Additional Amounts, if any, so becoming due, such
sum to be held in trust for the benefit of the Persons entitled to such
principal, premium, Make-Whole Amount, interest or Additional Amounts and
(unless such Paying Agent is the Trustee) the Operating Partnership shall
promptly notify the Trustee of its action or failure so to act.
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The Operating Partnership shall 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,
that such Paying Agent will:
(1) hold all sums held by it for the payment of principal of (and
premium or Make-Whole Amount, if any, on) or interest or Additional
Amounts, if any, on Securities in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided;
(2) give the Trustee notice of any default by the Operating
Partnership or the Company (or any other obligor or guarantor on the
Securities) in the making of any such payment of principal (and premium or
Make-Whole Amount, if any) or interest or Additional Amounts, if any; and
(3) at any time during the continuance of any such default, on the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Operating Partnership or the Company (with respect to any series of
Guaranteed Securities) may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Operating Partnership Order or Company Order, as the case may be, direct any
Paying Agent to pay, to the Trustee all sums held in trust by the Operating
Partnership or such Paying Agent, such sums to be held by the Trustee on the
same trusts as those on which such sums were held by the Operating Partnership
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 Operating
Partnership, in trust for the payment of the principal of (and premium or Make-
Whole Amount, if any, on) or interest or Additional Amounts, if any, on any
Security of any series and remaining unclaimed for two years after such
principal (and premium or Make-Whole Amount, if any) interest or Additional
Amounts, if any, has become due and payable shall be paid to the Operating
Partnership upon Operating Partnership Request (or if deposited by the Company,
to the Company upon Company Request), or (if then held by the Operating
Partnership) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only to the
Operating Partnership and the Company (if the Securities of such series are
Guaranteed Securities) for payment of the principal of (and premium or Make-
Whole Amount, if any, on) and interest and any Additional Amounts, if any, on
any Security of such series, without interest thereon, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Operating Partnership 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 Operating Partnership or
the Company cause to be published once, in an Authorized Newspaper, notice that
such money remains unclaimed and
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that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Operating Partnership or the Company, as the case may be.
SECTION 1004. Existence. Subject to Article Eight, each of the Operating
---------
Partnership and the Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect the existence, rights (charter and
statutory) and franchises of itself and its Subsidiaries; provided, however,
-------- -------
that neither the Operating Partnership nor the Company shall be required to
preserve any right or franchise if the Board of Trustees shall determine that
the preservation thereof is no longer desirable in the conduct of its business
as a whole and that the loss thereof is not disadvantageous in any material
respect to the Holders of Securities of any series.
SECTION 1005. Maintenance of Properties. Each of the Operating
-------------------------
Partnership and the Company shall cause all of its 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 shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Operating Partnership and the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this Section shall prevent the
-------- -------
Operating Partnership, the Company or any Subsidiary from selling or otherwise
disposing for value its properties in the ordinary course of its business.
SECTION 1006. Insurance. Each of the Operating Partnership and the
---------
Company shall, and shall cause each of its respective Subsidiaries to, keep all
of its insurable properties insured against loss or damage at least equal to
their then full insurable value with financially sound and reputable insurance
companies.
SECTION 1007. Payment of Taxes and Other Claims. Each of the Operating
---------------------------------
Partnership and the Company shall pay or discharge or cause to be paid or
discharged, before the same become delinquent, (i) all taxes, assessments and
governmental charges levied or imposed upon it or any Subsidiary or on the
income, profits or property of it or any Subsidiary and (ii) all lawful claims
for labor, materials and supplies which, if unpaid, might by law become a lien
on the property of it or any Subsidiary; provided, however, that neither the
-------- -------
Operating Partnership nor the Company shall be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings.
SECTION 1008. Provision of Financial Information. Whether or not the
----------------------------------
Operating Partnership or the Company is subject to Section 13 or 15(d) of the
Exchange Act, the Operating Partnership and the Company shall, to the extent
permitted under the Exchange Act, file with the Commission the annual reports,
quarterly reports and other documents which they would have been required to
file with the Commission pursuant to such Section 13 or 15(d) (the
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"Financial Statements") if they were so subject, such documents to be filed with
--------------------
the Commission on or prior to the respective dates (the "Required Filing Dates")
---------------------
by which they would have been required so to file such documents if they were so
subject.
The Operating Partnership and the Company shall also in any event (i)
within 30 days of each Required Filing Date (A) 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 and quarterly reports which the
Operating Partnership and the Company would have been required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act if they were
subject to such Sections and (B) file with the Trustee copies of annual reports,
quarterly reports and other documents which the Operating Partnership and the
Company would have been required to file with the Commission pursuant to Section
13 or 15(d) of the Exchange Act if they were subject to such Sections and (ii)
if filing such documents by the Operating Partnership and the Company with the
Commission is not permitted under the Exchange Act, promptly upon written
request and payment of the reasonable cost of duplication and delivery, supply
copies of such documents to any prospective Holder.
SECTION 1009. Statement as to Compliance. Each of the Operating
--------------------------
Partnership and the Company shall deliver to the Trustee, within 120 days after
the end of each fiscal year, a certificate from the principal executive officer,
principal financial officer or principal accounting officer as to his or her
knowledge of the Operating Partnership's or the Company's, as the case may be,
compliance with all conditions and covenants under this Indenture verified in
the case of conditions precedent compliance with which is subject to
verification by accountants by the certificate or opinion of an accountant 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
provided under this Indenture.
SECTION 1010. Additional Amounts. If any Securities of a series provide
------------------
for the payment of Additional Amounts, the Operating Partnership and the Company
(if the Securities are Guaranteed Securities) each covenants and agrees for the
benefit of the Holders of Securities to 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 clause (1) of Section 502, the
payment of the principal of or of any premium, Make-Whole Amount or interest on,
or in respect of, any Security of any series or payment of any 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.
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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 Securities of
such series (or if the Securities of such 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 date of payment of principal and any
premium or Make-Whole Amount or interest, if there has been any change with
respect to the matters set forth in the below-mentioned Operating Partnership
Certificate or Company Certificate, the Operating Partnership or the Company, as
the case may be, shall furnish the Trustee and the principal Paying Agent or
Paying Agents, if other than the Trustee, with an Operating Partnership
Certificate or Company Certificate, as the case may be, instructing the Trustee
and such Paying Agent or Paying Agents whether such payment of principal of and
any premium or Make-Whole Amount or interest on the Securities of such series
shall be made to Holders of Securities of such series or any coupons
appertaining thereto 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 or within the series. If any such withholding is required,
then such Operating Partnership Certificate or Company Certificate, as the case
may be, shall specify by country the amount, if any, required to be withheld on
such payments to such Holders of Securities of such series or any coupons
appertaining thereto and the Operating Partnership and the Company (if the
Securities of such series are Guaranteed Securities) each agrees to pay to the
Trustee or such Paying Agent the Additional Amounts required by the terms of
such Securities. In the event that the Trustee or any Paying Agent, as the case
may be, shall not so receive the above-mentioned certificate, then the Trustee
or such Paying Agent shall be entitled (i) 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 such series or any coupons appertaining thereto
until it has received a certificate advising otherwise and (ii) to make all
payments of principal and interest with respect to the Securities of such series
or any coupons appertaining thereto without withholding or deductions until
otherwise advised. The Operating Partnership and the Company each 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 or in reliance on any Operating Partnership Certificate
of Company Certificate furnished pursuant to this Section or in reliance on the
Operating Partnership's or the Company's not furnishing such an Operating
Partnership Certificate or Company Certificate, as the case may be.
SECTION 1011. Waiver of Certain Covenants. The Operating Partnership or
---------------------------
the Company, as the case may be, may omit in any particular instance to comply
with any term, provision or condition set forth in Sections 1004 to 1008,
inclusive, and with any other term, provision or condition with respect to the
Securities of any series specified in accordance with Section 301 (except any
such term, provision or condition which could not be amended without the consent
of all Holders of Securities of such series pursuant to Section 902), 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
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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 Operating Partnership and the Company and the duties of the
Trustee in respect of any such term, provision or condition shall remain in full
force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article. Securities of any series which
------------------------
are redeemable before their Stated Maturity shall be redeemable in accordance
with their terms and (except as otherwise specified as contemplated by Section
301 for Securities of any series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee. The election of the
-------------------------------------
Operating Partnership to redeem any Securities shall be evidenced by or pursuant
to a Board Resolution. In case of any redemption at the election of the
Operating Partnership of less than all of the Securities of any series, the
Operating Partnership 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 Operating Partnership shall furnish the Trustee with an Operating
Partnership Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed. If less
-------------------------------------------------
than all the Securities of any series issued on the same day with the same terms
are to be redeemed, the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series issued on such date with the same terms
not previously called for redemption, by such method as the Trustee deems fair
and appropriate and which may provide for the selection for redemption of
portions (equal to the minimum authorized denomination for Securities of such
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 such series.
The Trustee shall promptly notify the Operating Partnership, the Company
(if the Securities of such series are Guaranteed Securities) 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.
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SECTION 1104. Notice of Redemption. Notice of redemption shall be given
--------------------
in the manner provided in Section 106, not less than 30 days nor more than 60
days prior to the Redemption Date, unless a shorter period is specified by the
terms of such series established pursuant to Section 301, to each Holder of
Securities to be redeemed, but failure to give such notice in the manner herein
provided to the Holder of any Security designated for redemption as a whole or
in part, or any defect in the notice to any such Holder, shall not affect the
validity of the proceedings for the redemption of any other such Security or
portion thereof.
Any notice which is mailed to the Holders of Registered Securities in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price, accrued interest to the Redemption Date
payable as provided in Section 1106, if any, and Additional Amounts, if
any;
(3) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Security or Securities to be redeemed;
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, on surrender of such Security, the holder will receive, without a
charge, a new Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed;
(5) that on the Redemption Date, the Redemption Price and accrued
interest to the Redemption Date payable as provided in Section 1106, if
any, will become due and payable on each such Security, or the portion
thereof, to be redeemed and, if applicable, that interest thereon shall
cease to accrue on and after such date;
(6) the Place or Places of Payment where such Securities, together in
the case of Bearer Securities with all coupons appertaining thereto, if
any, maturing after the Redemption Date, are to be surrendered for payment
of the Redemption Price and accrued interest, if any;
(7) that the redemption is for a sinking fund, if such is the case;
(8) that, unless otherwise specified in such notice, Bearer
Securities of any series, if any, surrendered for redemption must be
accompanied by all coupons appertaining thereto 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,
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unless security or indemnity satisfactory to the Operating Partnership, the
Company (if the Securities of such series are Guaranteed Securities), the
Trustee for such series and any Paying Agent is furnished;
(9) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if such
Bearer Securities may be exchanged for Registered Securities not subject to
the redemption on this Redemption Date pursuant to Section 305 or
otherwise, the last date, as determined by the Operating Partnership, on
which such exchanges may be made; and
(10) the CUSIP number of such Security, if any, provided that neither
the Operating Partnership or the Trustee shall have any responsibility for
any such CUSIP number.
Notice of redemption of Securities to be redeemed shall be given by the
Operating Partnership or, at the Operating Partnership's request, by the Trustee
in the name and at the expense of the Operating Partnership.
SECTION 1105. Deposit of Redemption Price. On or prior to any Redemption
---------------------------
Date, the Operating Partnership shall deposit with the Trustee or with a Paying
Agent (or, if the Operating Partnership 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 is an Interest Payment Date) accrued interest on, all the
Securities or portions thereof which are to be redeemed on such date.
SECTION 1106. Securities Payable on Redemption Date. Notice of
-------------------------------------
redemption having been given as provided above, 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 Operating Partnership
defaults in the payment of the Redemption Price and accrued interest) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
redeemed, except to the extent provided below, shall be void. Upon surrender of
any such Security for redemption in accordance with such notice, together with
any coupons appertaining thereto maturing after the Redemption Date, such
Security shall be paid by the Operating Partnership 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
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the United States (except as otherwise provided in Section 1002) and, unless
otherwise specified as contemplated by Section 301, only upon presentation and
surrender of coupons for such interest; and provided, further, that,
-------- -------
installments of interest on Registered Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Bearer Security surrendered for redemption is not accompanied by all
coupons appertaining thereto 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 Operating Partnership and the Trustee if there
is furnished to them such security or indemnity as they may require to save each
of them and any Paying Agent harmless. If thereafter the Holder of such
Security surrenders to the Trustee or any Paying Agent any such missing coupon
in respect of which a deduction has been made from the Redemption Price, such
Holder shall be entitled to receive the amount so deducted; provided, however,
-------- -------
that interest represented by a coupon 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 such coupon.
If any Security called for redemption is not so paid upon surrender thereof
for redemption, the principal (and premium or Make-Whole Amount, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Security.
SECTION 1107. Securities Redeemed in Part. Any Security which is to be
---------------------------
redeemed only in part (pursuant to the provisions of this Article or of Article
Twelve) shall be surrendered at a Place of Payment therefor (with, if the
Operating Partnership or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Operating Partnership
and the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing) and the Operating Partnership shall execute and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge a new Security or Securities of the same series (and, if such
Security is a Guaranteed Security, with the related Guarantee endorsed thereon),
of any authorized denomination as requested by such Holder in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal of the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article. The provisions of this Article
------------------------
shall be applicable to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 301 for
Securities of such series.
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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 1202. Satisfaction of Sinking Fund Payments with Securities. The
-----------------------------------------------------
Operating Partnership may, in satisfaction of all or any part of any mandatory
sinking fund with respect to the Securities of a series, (i) deliver Outstanding
Securities of such series (other than any Securities previously called for
redemption), together in the case of any Bearer Securities of such series with
all unmatured coupons appertaining thereto, and (ii) apply as a credit
Securities of such series which have been redeemed either at the election of the
Operating Partnership 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 Operating Partnership, provided that such
--------
Securities so delivered or applied as a credit have not been previously so
credited. Such Securities shall be received and credited for such purpose by
the Trustee at the applicable Redemption Price specified in such Securities for
redemption through operation of the sinking fund and the amount of such
mandatory sinking fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund. Not less than
-----------------------------------------
60 days prior to each sinking payment date for Securities of any series, the
Operating Partnership shall deliver to the Trustee an Operating Partnership
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for such series pursuant to the terms of such 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 such 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 shall also
deliver to the Trustee any Securities to be so delivered and credited. If such
Operating Partnership Certificate specifies an optional amount to be added in
cash to the next ensuing mandatory sinking fund payment, the Operating
Partnership 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 on 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 Operating Partnership in
the manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.
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ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article. Repayment of Securities of any
------------------------
series before their Stated Maturity at the option of Holders thereof shall be
made in accordance with the terms of such Securities, if any, that provide such
option to the Holders thereof and (except as otherwise specified by the terms of
such series established pursuant to Section 301) in accordance with this
Article.
SECTION 1302. Repayment of Securities. Securities of any series subject
-----------------------
to repayment in whole or in part at the option of the Holders thereof shall,
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 Operating Partnership covenants that on or before the Repayment
Date it shall deposit with the Trustee or with a Paying Agent (or, if the
Operating Partnership is acting as it own Paying Agent, the Operating
Partnership shall 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 is an Interest Payment Date) accrued interest
on, all the Securities or portions thereof, as the case may be, to be repaid on
such date.
SECTION 1303. Exercise of Option. Securities of any series subject to
------------------
repayment at the option of the Holders thereof will contain an "Option to Elect
Repayment" form on the reverse of such Securities. In order for any Security to
be repaid at the option of the Holder, the Trustee must receive at the Place of
Payment therefor specified in the terms of such Security (or at such other place
or places of which the Operating Partnership 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, (i) the Security to be so repaid together with the
"Option to Elect Repayment" form on the reverse thereof duly completed by the
Holder (or by the Holder's attorney thereunto duly authorized in writing) or
(ii) 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 the duly completed "Option to Elect
Repayment" 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
duly completed form 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,
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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
which is not to be repaid, must be specified. The principal amount of any
Security providing for prepayment 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
or within the series of which such Security to be repaid is a part. Except as
may be provided by the terms of any Security providing for repayment at the
option of the Holder thereof, exercise of the repayment option by the Holder
shall be irrevocable unless waived by the Operating Partnership.
SECTION 1304. When Securities Presented for Repayment Become Due and
------------------------------------------------------
Payable. If Securities of any series providing for repayment at the option of
- -------
the Holders thereof have been surrendered as provided in this Article and as
provided by or pursuant to the terms of such Securities, such Securities or the
portions thereof, as the case may be, to be repaid shall become due and payable
and shall be paid by the Operating Partnership on the Repayment Date therein
specified, and on and after such Repayment Date (unless the Operating
Partnership defaults in the payment of such Securities on such Repayment Date)
such Securities shall, if the same were interest-bearing, cease to bear interest
and the coupons for such interest appertaining to any Bearer Securities so to be
repaid, except to the extent provided below, shall be void. Upon surrender of
any such Security for repayment in accordance with such provisions, together
with any coupons appertaining thereto maturing after the Repayment Date, the
principal amount of such security so to be repaid shall be paid by the Operating
Partnership, 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 Operating Partnership defaults 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 is not accompanied by all
coupons appertaining thereto 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 Operating
Partnership and the Trustee if there is furnished to them such security or
indemnity as they may require to save each of them and any Paying Agent
harmless. If thereafter the Holder of such Security surrenders to the Trustee
or any Paying Agent any such missing coupon in respect of which a deduction has
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 a coupon 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 such coupon.
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If the principal amount of any Security surrendered for repayment shall not
be so repaid upon surrender thereof, such principal amount (together with
interest, if any, thereon accrued to such Repayment Date) shall, until paid,
bear interest from the Repayment Date at the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) set forth in such
Security.
SECTION 1305. Securities Repaid in Part. Upon surrender of any
-------------------------
Registered Security which is to be repaid in part only, the Operating
Partnership shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security, without service charge and at the expense of the
Operating Partnership, a new Registered Security or Securities of the same
series (and, if such Registered Security is a Guaranteed Security, with the
related Guaranteed endorsed thereon), of any authorized denomination specified
by the Holder, in an aggregate principal amount equal to and in exchange for the
portion of the principal of such Security so surrendered which is not to be
repaid.
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article; Operating Partnership's Option to
-----------------------------------------------------------
Effect Defeasance or Covenant Defeasance. If, pursuant to Section 301,
- ----------------------------------------
provision is made for either or both of (i) defeasance of the Securities of or
within a series under Section 1402 or (ii) covenant defeasance of the Securities
of or within a series under Section 1403 to be applicable to the Securities of
any series, then the provisions of such Section or Sections, as the case may be,
together with the other provisions of this Article (with such modifications
thereto as may be specified pursuant to Section 301 with respect to any
Securities), shall be applicable to such Securities and any coupons appertaining
thereto, and the Operating Partnership may at its option by Board Resolution, at
any time, with respect to such Securities and any coupons appertaining thereto,
elect to defease such Outstanding Securities and any coupons appertaining
thereto pursuant to Section 1402 (if applicable) or Section 1403 (if applicable)
upon compliance with the conditions set forth below in this Article.
SECTION 1402. Defeasance and Discharge. Upon the Operating Partnership's
------------------------
exercise of the above option applicable to this Section with respect to any
Securities of or within a series, the Operating Partnership and, if applicable,
the Company shall be deemed to have been discharged from their 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 Operating
- -----------
Partnership 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 "Outstanding" only for the purposes of Section
1405 and the other Sections of this Indenture referred to in clauses (i) and
(ii) 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 Operating Partnership, shall execute proper
instruments acknowledging the same), except for the
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following which shall survive until otherwise terminated or discharged
hereunder: (i) 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, payments in respect of
the principal of (and premium or Make-Whole Amount, if any, on) and interest and
Additional Amounts, if any, on such Securities and any coupons appertaining
thereto when such payments are due; (ii) the Operating Partnership and, if
applicable, the Company's obligations with respect to such Securities under
Sections 305, 306, 1002 and 1003 and with respect to the payment of Additional
Amounts, if any, on such Securities as contemplated by Section 1010; (iii) the
rights, powers, trusts, duties and immunities of the Trustee hereunder; and (iv)
this Article. Subject to compliance with this Article Fourteen, the Operating
Partnership may exercise its option under this Section notwithstanding the prior
exercise of its option under Section 1403 with respect to such Securities and
any coupons appertaining thereto.
SECTION 1403. Covenant Defeasance. Upon the Operating Partnership's
-------------------
exercise of the above option applicable to this Section with respect to any
Securities of or within a series, the Operating Partnership and, if applicable,
the Company shall be released from their obligations under Sections 1004 to
1008, inclusive, and, if specified pursuant to Section 301, their 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 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, 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 Operating Partnership and, if
applicable, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such Section or
such other covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such Section or such other covenant or by reason of
reference in any such Section or such other covenant to any other provision
herein or in any other document and such omission to comply shall not constitute
a default or an Event of Default under clause (4) or (8) of Section 501 or
otherwise, as the case may be, but, except as specified above, the remainder of
this Indenture and such Securities, any related Guarantees and any coupons
appertaining thereto shall be unaffected thereby.
SECTION 1404. Conditions to Defeasance or Covenant Defeasance. The
-----------------------------------------------
following shall be the conditions to application of Section 1402 or Section 1403
to any Outstanding Securities of or within a series and any coupons appertaining
thereto:
(a) The Operating Partnership or the Company (if the Securities of
such series are Guaranteed Securities) shall have irrevocably 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) funds in trust for the purpose
of making the following payments, specifically pledged as security
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for, and dedicated solely to, the benefit of the Holders of such Securities
and any coupons appertaining thereto: (i) an amount in such currency or
currencies, currency unit or units, or composite currency or currencies in
which such Securities and any coupons appertaining thereto are then
specified as payable at Stated Maturity, or (ii) Government Obligations
applicable to such Securities and any coupons appertaining thereto
(determined on the basis of the currency or currencies, currency unit or
units, or composite currency or currencies in which such Securities and any
coupons appertaining thereto are then specified as payable at Stated
Maturity) which through the scheduled payment of principal and interest in
respect thereof in accordance with their terms will provide, not later than
one day before the due date of any payment of principal of (and premium or
Make-Whole Amount, if any, on) and interest and Additional Amounts, if any,
on such Securities and any coupons appertaining thereto, money in an
amount, or (iii) a combination thereof 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, (A) the principal of (and premium
or Make-Whole Amount, if any, on) and interest and Additional Amounts, 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 (B) 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, provided that the Trustee has been irrevocably
--------
instructed to apply such money or the proceeds of such Government
Obligations to such payments with respect to such Securities. Before such a
deposit, the Operating Partnership may give to the Trustee, in accordance
with Section 1102, a notice of its election to redeem all or any portion of
such Outstanding Securities at a future date in accordance with the terms
of the Securities of such series and Article Eleven, which notice shall be
irrevocable. Such irrevocable redemption notice, if given, shall be given
effect in applying the foregoing.
(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 Operating
Partnership or the Company (if the Securities of such series are Guaranteed
Securities) is a party or by which it is bound (and shall not cause the
Trustee to have a conflicting interest pursuant to Section 310(b) of the
Trust Indenture Act with respect to any Security of the Operating
Partnership).
(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 has occurred and is continuing on the date
of such deposit or, insofar as clauses (7) and (8) of Section 501 are
concerned, at any time during the period ending
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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 Operating
Partnership or the Company (if the Securities of such series are Guaranteed
Securities) has delivered to the Trustee an Opinion of Counsel stating that
(i) the Operating Partnership or the Company, as the case may be, has
received from, or there has been published by, the Internal Revenue Service
a ruling, or (ii) since the date of execution of this Indenture, there has
been a change in the applicable Federal income tax law, in either case to
the effect that, and based thereon such opinion shall confirm that, the
Holders of such Outstanding Securities and any coupons appertaining thereto
will not recognize income, gain or loss for Federal income tax purposes as
a result of such defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such defeasance had not occurred.
(e) In the case of an election under Section 1403, the Operating
Partnership or the Company (if the Securities of such series are Guaranteed
Securities) has delivered to the Trustee an Opinion of Counsel to the
effect that the Holders of such Outstanding Securities and any coupons
appertaining thereto will not recognize income, gain or loss for Federal
income tax purposes as a result of such covenant defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such covenant defeasance
had not occurred.
(f) The Operating Partnership or the Company (if the Securities of
such series are Guaranteed Securities) has delivered to the Trustee an
Operating Partnership Certificate or Company Certificate, as the case may
be, and an Opinion of Counsel, each stating that all conditions precedent
to the defeasance under Section 1402 or the covenant defeasance under
Section 1403 (as the case may be) have been complied with and an Opinion of
Counsel to the effect that either (i) as a result of a deposit pursuant to
paragraph (a) above and the related exercise of the Operating Partnership's
option under Section 1402 or Section 1403 (as the case may be),
registration is not required under the Investment Company Act of 1940, as
amended, by the Operating Partnership or the Company, as the case may be,
with respect to the trust funds representing such deposit or by the Trustee
for such trust funds or (ii) all necessary registrations under such Act
have been effected.
(g) After the 91st day following the deposit, the trust funds will not
be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally.
(h) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be
imposed on the Operating Partnership or the Company in connection therewith
pursuant to Section 301.
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SECTION 1405. Deposited Money and Government Obligations to Be Held in
--------------------------------------------------------
Trust; Other Miscellaneous Provisions. Subject to the provisions of the last
- -------------------------------------
paragraph of Section 1003, all money and Government Obligations (or other
property as may be provided pursuant to Section 301) (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee) 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
or such other qualifying trustee, in accordance with the provisions of such
Securities and any coupons appertaining thereto and this Indenture, to the
payment, either directly or through any Paying Agent (including the Operating
Partnership acting as its own Paying Agent) as the Trustee or such other
qualifying trustee may determine, to the Holders of such Securities and any
coupons appertaining thereto of all sums due and to become due thereon in
respect of principal (and premium or Make-Whole Amount, if any) and interest 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(a) has been made, (i) 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, currency unit or composite currency other than that in
which the deposit pursuant to Section 1404(a) has been made in respect of such
Security or (ii) a Conversion Event occurs in respect of the currency, currency
unit or composite currency in which the deposit pursuant to Section 1404(a) has
been made, the indebtedness represented by such Security and any coupons
appertaining thereto shall be deemed to have been, and will be, fully discharged
and satisfied through the payment of the principal of (and premium or Make-Whole
Amount, if any, on), and interest and Additional Amounts, if any, on such
Security as the same become 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, 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, currency unit or composite currency in effect on the second
Business Day prior to each payment date, except, with respect to a Conversion
Event, for such currency, currency unit or composite currency in effect (as
nearly as feasible) at the time of the Conversion Event.
The Operating Partnership or the Company, as the case may be, shall pay and
indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the Government Obligations deposited pursuant to Section 1404
or the principal and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of such
Outstanding Securities and any coupons appertaining thereto.
Anything in this Article to the contrary notwithstanding, the Trustee or
such other qualifying trustee shall deliver or pay to the Operating Partnership
or the Company, as the case may be, from time to time upon Operating Partnership
Request or Company Request, as the case may be, 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
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independent public accountants expressed in a written certification thereof
delivered to the Trustee or such other qualifying trustee, are in excess of the
amount thereof which would then be required to be deposited to effect a
defeasance or covenant defeasance, as applicable, in accordance with this
Article.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called. A meeting of
-----------------------------------------
Holders of Securities of any series may be called at any time and from time to
time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.
SECTION 1502. Call, Notice and Place of Meetings.
----------------------------------
(a) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 1501, to be
held at such time and at such place in the city of _____________,
___________, as the Trustee determines. Notice of every meeting of Holders
of Securities of any series, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such
meeting, shall be given, in the manner provided in Section 106, not less
than 21 nor more than 180 days prior to the date fixed for the meeting.
(b) In case at any time the Operating Partnership, pursuant to a Board
Resolution, the Company (if the Securities of such series are Guaranteed
Securities), pursuant to a Board Resolution, or the Holders of at least 10%
in principal amount of the Outstanding Securities of any series 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 has not made the first publication of the notice
of such meeting within 21 days after receipt of such request or does not
thereafter proceed to cause the meeting to be held as provided herein, then
the Operating Partnership, the Company (if the Securities of such series
are Guaranteed Securities) or the Holders of Securities of such series in
the amount above specified, as the case may be, may determine the time and
the place in the city of _______________, _____________ for such meeting
and may call such meeting for such purposes by giving notice thereof as
provided in paragraph (a) above.
SECTION 1503. Persons Entitled to Vote at Meetings. To be entitled to
------------------------------------
vote at any meeting of Holders of Securities of any series, a Person shall be
(i) a Holder of one or more Outstanding Securities of such series or (ii) 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
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meeting of Holders of Securities of any series are the Persons entitled to vote
at such meeting and their counsel, any representatives of the Trustee and its
counsel, any representatives of the Operating Partnership and its counsel, and
any representatives of the Company and its counsel (if the Securities of such
series are Guaranteed Securities).
SECTION 1504. Quorum; Action. The Persons entitled to vote a majority in
--------------
principal amount of the Outstanding Securities of a series shall constitute a
quorum for a meeting of Holders of Securities of such series; provided, however,
-------- -------
that if any action is to be taken at such meeting with respect to a consent or
waiver which this Indenture expressly provides may be given by the Holders of
not less than a specified percentage in principal amount of the Outstanding
Securities of a series, the Persons entitled to vote such specified percentage
in principal amount of the Outstanding Securities of such series shall
constitute a quorum. In the absence of a quorum within 30 minutes after the
time appointed for any such meeting, the meeting shall, if convened at the
request of Holders of Securities of such series, be dissolved. In any other
case the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 1502(a), except that such notice need be given only
once not less than five days prior to the date on which the meeting is scheduled
to be reconvened. Notice of the reconvening of any adjourned meeting shall
state expressly the percentage, as provided above, of the principal amount of
the Outstanding Securities of such series which shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted by the affirmative vote of the Holders of a majority
in principal amount of the Outstanding Securities of such 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 such
series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and any coupons
appertaining thereto, 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,
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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 in principal amount of all Outstanding Securities affected
thereby, or of the Holders of such series and one or more additional series;
(1) there shall be no minimum quorum requirement for such meeting;
and
(2) the principal amount of the Outstanding Securities of such
series which vote in favor of such request, demand, authorization,
direction, notice, consent, waiver or other action shall be taken into
account in determining whether such request, demand, authorization,
direction, notice, consent, waiver or other action has been made, given or
taken under this Indenture.
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of
----------------------------------------------------------
Meetings.
- --------
(a) Notwithstanding any provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting
of Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard
to the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to
vote, and such other matters concerning the conduct of the meeting as it
deems 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 has been called by the
Operating Partnership, the Company or by Holders of Securities as provided
in Section 1502(b), in which case the Operating Partnership, the Company or
the Holders of Securities of or within 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 such Holder;
provided, however, that no vote shall be cast or counted at any meeting in
-------- -------
respect of any Security challenged as not
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<PAGE>
Outstanding and ruled by the chairman of the meeting to be not Outstanding.
The chairman of the meeting shall have no right to vote, except as a Holder
of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1502 at which a quorum is present may be adjourned from
time to time by Persons entitled to vote a majority in principal amount of
the Outstanding Securities of such series represented at the meeting, and
the meeting may be held as so adjourned without further notice.
SECTION 1506. Counting Votes and Recording Action of Meetings. The vote
-----------------------------------------------
on 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 series 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 such 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 such 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 Operating Partnership
and to the Company (if the Securities of such series are Guaranteed Securities)
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.
SECTION 1507. Evidence of Action Taken by Holders. Any request, demand,
-----------------------------------
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by a specified percentage in principal
amount of the Holders of any or all series may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such specified
percentage of Holders in person or by agent duly appointed in writing; and,
except as otherwise expressly provided herein, such action shall become
effective when such instrument or instruments are delivered to the Trustee.
Proof of execution of any instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Article
Six) conclusive in favor of the Trustee, the Operating Partnership and the
Company, if made in the manner provided in this Article.
SECTION 1508. Proof of Execution of Instruments. Subject to Article Six,
---------------------------------
the execution of any instrument by a Holder or his agent or proxy may be proved
in accordance with
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such reasonable rules and regulations as may be prescribed by the Trustee or in
such manner as shall be satisfactory to the Trustee.
ARTICLE SIXTEEN
GUARANTEE
SECTION 1601. Guarantee. A Guarantee shall only be in effect with
---------
respect to Securities of a series when such Guarantee is made applicable to such
series in accordance with Section 301 and such Guarantee is duly executed in
accordance with Section 303. The Company hereby unconditionally guarantees to
each Holder of a Guaranteed Security authenticated and delivered by the Trustee
the due and punctual payment of the principal of (and premium and Make-Whole
Amount, if any, on) and interest and Additional Amounts, if any, on such
Guaranteed Security and the due and punctual payment of the sinking fund
payments, if any, provided for pursuant to the terms of such Guaranteed
Security, when and as the same shall become due and payable, whether at
maturity, upon acceleration, redemption, repayment or otherwise, in accordance
with the terms of such Security and of this Indenture. In case of the failure of
the Operating Partnership punctually to pay any such principal, premium, Make-
Whole Amount, interest, Additional Amounts or sinking fund payment, the Company
hereby agrees to cause any such payment to be made punctually when and as the
same shall become due and payable, whether at maturity, upon acceleration,
redemption, repayment or otherwise, and as if such payment were made by the
Operating Partnership.
The Company hereby agrees that its obligations hereunder and under any
Guarantee shall be as principal and not merely as surety, and shall be absolute,
irrevocable and unconditional, irrespective of, and shall be unaffected by, any
invalidity, irregularity or unenforceability of any Guaranteed Security or this
Indenture, any failure to enforce the provisions of any Guaranteed Security or
this Indenture, or any waiver, modification, consent or indulgence granted with
respect thereto by the Holder of such Guaranteed Security or the Trustee, the
recovery of any judgment against the Operating Partnership or any action to
enforce the same, or any other circumstances which may otherwise constitute a
legal or equitable discharge of a surety or guarantor. The Company hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of merger, insolvency or bankruptcy of the Operating Partnership,
any right to require a proceeding first against the Operating Partnership,
protest or notice with respect to any such Guaranteed Security or the
indebtedness evidenced thereby and all demands whatsoever, and covenants that
the Guarantees will not be discharged except by payment in full of the principal
of (and premium and Make-Whole Amount, if any, on) and interest and Additional
Amounts, if any, on and sinking fund payments, if any, required with respect to,
the Guaranteed Securities and the complete performance of all other obligations
contained in the Guaranteed Securities.
The Guarantees shall continue to be effective or be reinstated, as the case
may be, if at any time payment on any Guaranteed Security, in whole or in part,
is rescinded or must otherwise be restored to the Operating Partnership or the
Company upon the bankruptcy, liquidation or reorganization of the Operating
Partnership or the Company or otherwise.
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The Company shall be subrogated to all rights of the Holder of any
Guaranteed Security against the Operating Partnership in respect of any amounts
paid to such Holder by the Company pursuant to the provisions of the Guarantees;
provided, however, that the Company shall not be entitled to enforce, or to
- -----------------
receive any payments arising out of or based upon, such right of subrogation
until the principal of (and premium and Make-Whole Amount, if any, on) and
interest and Additional Amounts, if any, on and sinking fund payments, if any,
required with respect to, all Guaranteed Securities shall have been paid in
full.
89
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, as of the day and year first above written.
CABOT INDUSTRIAL PROPERTIES, L.P.,
As Issuer
By: CABOT INDUSTRIAL TRUST,
As General Partner
By: ______________________________________
[Name]
[Title]
Attest:
___________________________
[Name]
Secretary
CABOT INDUSTRIAL TRUST,
As Guarantor
By: ______________________________________
[Name]
[Title]
Attest:
___________________________
[Name]
Secretary
__________________________________________,
As Trustee
By: ______________________________________
[Name]
[Title]
Attest:
___________________________
[Name]
[Title]
90
<PAGE>
STATE OF MASSACHUSETTS )
) ss:
COUNTY OF SUFFOLK )
On the ___ day of __________, 1999, before me personally came
_________________, to me known, who, being by me duly sworn, did depose and say
that he resides at __________ __________________________, that he is
____________________________________ of ______________________, acting in its
capacity as the general partner of CABOT INDUSTRIAL PROPERTIES, L.P., one of the
entities described in and which executed the foregoing instrument; that he knows
the seal of such entity; that the seal affixed to such instrument is such seal;
that it was so affixed by authority of the Board of Trustees of such entity, and
that he signed his name thereto by like authority.
[Notarial Seal]
__________________________________
Notary Public
Commission Expires
STATE OF MASSACHUSETTS )
) ss:
COUNTY OF SUFFOLK )
On the ___ day of __________, 1999, before me personally came
_________________, to me known, who, being by me duly sworn, did depose and say
that he resides at __________ __________________________, that he is
____________________________________ of CABOT INDUSTRIAL TRUST, one of the
entities described in and which executed the foregoing instrument; that he knows
the seal of such entity; that the seal affixed to such instrument is such seal;
that it was so affixed by authority of the Board of Trustees of such entity, and
that he signed his name thereto by like authority.
[Notarial Seal]
__________________________________
Notary Public
Commission Expires
91
<PAGE>
STATE OF _____________ )
) ss:
COUNTY OF ____________ )
On the ___ day of __________, 1999, before me personally came __________,
to me known, who, being by me duly sworn, did depose and say that he resides at
_____________ ___________________________, that he is ________________________
of [NAME OF TRUSTEE], one of the entities described in and which executed the
foregoing instrument; that he knows the seal of such entity; that the seal
affixed to such instrument is such seal; that it was so affixed by authority of
the board of directors of such entity, and that he signed his name thereto by
like authority.
[Notarial Seal]
___________________________
Notary Public
Commission Expires
92
<PAGE>
EXHIBIT A
FORMS OF CERTIFICATION
EXHIBIT A-1
FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, as of the date hereof, and except as set forth
below, the above-captioned Securities held by you for our account (i) are owned
by person(s) which are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States federal income taxation regardless of its source
("United States person(s)"), (ii) are owned by United States person(s) which 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 [_______________________________] or its agent that such financial
institution will provide a certificate within a reasonable time stating that it
agrees to 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 a financial institution 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, such financial institution
described in clause (iii) above (whether or not also described in clause (i) or
(ii)), certifies that it 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
A-1
<PAGE>
correct on such date, and in the absence of any such notification it may be
assumed that this certification applies as of such date.
This certificate excepts and does not relate to [U.S.$] _______________ of
such interest in the above-captioned Securities in respect of which we are not
able to certify and as to which we understand an exchange for an interest in a
Permanent Global Security or an exchange for and delivery of definitive
Securities (or, if relevant, collection of any interest) cannot be made until we
do so certify.
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: _____________________, ____
[To be dated no earlier than the 15th day prior
to the earlier of (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 Signatory)
Name:
Title:
A-2
<PAGE>
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, [U.S.$] _______________
principal amount of the above-captioned Securities (i) is owned by person(s)
which are not citizens or residents of the United States, domestic partnerships,
domestic corporations or any estate or trust the income of which is subject to
United States Federal income taxation regardless of its source ("United States
person(s)"), (ii) is owned by United States persons(s) which 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
[_____________________________] or its agent that such financial institution
will provide a certificate within a reasonable time stating that it agrees to
comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal
Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) is
owned by a financial institution 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 that such financial institutions described in clause
(iii) above (whether or not also described in clause (i) or (ii)) have certified
that they have not acquired the Securities for purposes of resale directly or
indirectly to a United States person or to a person within the United States or
its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any portion of the
temporary global Security representing the above-captioned Securities excepted
in the above-referenced certificates of Member 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
A-3
<PAGE>
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: _____________________, 19__
[To be dated no earlier than the earlier of
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-4
<PAGE>
Exhibit 5.1
February 1, 1999
Cabot Industrial Trust
Cabot Industrial Properties, L.P.
Two Center Plaza, #200
Boston, MA 02108-1906
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to Cabot Industrial Trust, a Maryland real estate
investment trust (the "Company"), in connection with the proposed sale of
certain securities of the Company, as set forth in the Form S-3 Registration
Statement (the "Registration Statement") filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Securities Act"),
to which this opinion is an exhibit and the prospectus (the "Prospectus") which
is a part of the Registration Statement. The Prospectus states that it will be
supplemented in the future by one or more supplements to the Prospectus (each, a
"Prospectus Supplement"). The Prospectus as supplemented by the various
Prospectus Supplements will provide for the sale of: (i) common shares of
beneficial interest, par value $.01 per share ("Common Shares"), (ii) preferred
shares of beneficial interest, par value $.01 per share ("Preferred Shares"),
(iii) Preferred Shares represented by depositary shares ("Depositary Shares"),
(iv) warrants to purchase Common Shares or Preferred Shares ("Warrants"), and
(v) guarantees of Debt Securities (as defined below) ("Guarantees").
We have also acted as counsel to Cabot Industrial Properties, L.P., a
Delaware limited partnership of which the Company is the sole general partner
(the "Operating Partnership"), in connection with the proposed sale of its
senior debt securities ("Debt Securities" and, together with the Common Shares,
Preferred Shares, Depositary Shares, Warrants and Guarantees, the "Securities"),
as set forth in the Registration Statement and the Prospectus. The Debt
Securities will be issued pursuant to an indenture among the Operating
Partnership, the Company and a corporate trustee, as trustee (the "Trustee"),
(the "Indenture"), a form of which Indenture has been provided to us.
<PAGE>
Cabot Industrial Trust
February 1, 1999
Page 2
As counsel to the Company and the Operating Partnership, we are generally
familiar with the proceedings taken and proposed to be taken by the Operating
Partnership and the Company in connection with the authorization and issuance of
the Securities and, for the purposes of this opinion, have assumed such
proceedings will be timely and properly completed in the manner presently
proposed and that the terms of each issuance will otherwise be in compliance
with law.
As counsel to the Company, we have examined originals or copies certified
or otherwise identified to our satisfaction as being true and complete copies of
the Company's Declaration of Trust (the "Declaration of Trust"), the Company's
Amended and Restated Bylaws, resolutions of the Company's Board of Trustees and
such records, certificates and other documents, and have considered such
questions of law as we have considered necessary or appropriate for the purpose
of this opinion. As to certain matters of fact relevant to our conclusions
expressed in this opinion, we have relied upon certificates of public officials
and written or oral statements or other representations of officers of the
Company. In rendering such opinion, 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.
As counsel to the Operating Partnership, we have examined originals or
copies certified or otherwise identified to our satisfaction as being true and
complete copies of the Operating Partnership's Second Amended and Restated
Agreement of Limited Partnership and resolutions of the Company's Board of
Trustees of the Company as the general partner of the Operating Partnership and
such records, certificates and other documents, and have considered such
questions of law as we have considered necessary or appropriate for the purpose
of this opinion. As to certain matters of fact relevant to our conclusions
expressed in this opinion, we have relied upon certificates of public officials
and written or oral statements or other representations of officers of the
Company. In rendering such opinion, 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.
This opinion is given on the assumption that the Registration Statement and
any required post-effective amendments thereto have all become effective under
the Securities Act and that all issuances of Securities have been authorized by
the Board of Trustees.
Based upon and subject to the foregoing and to the assumptions, conditions
and limitations set forth herein, we are of the opinion that:
(1) when (a) the Common Shares have been duly established in accordance
with the provisions of the Company's Declaration of Trust, and (b) the Common
Shares have been duly executed and countersigned, and issued and sold in the
form and in the manner contemplated in
<PAGE>
Cabot Industrial Trust
February 1, 1999
Page 3
the Registration Statement, including the Prospectus and the related Prospectus
Supplement(s), and (c) assuming that the terms of the Common Shares as executed
and delivered conform to the provisions of the Declaration of Trust in its
current form, the Common Shares will be legally issued, fully paid and non-
assessable;
(2) when (a) the Preferred Shares have been duly established in accordance
with the provisions of the Company's Declaration of Trust and Articles
Supplementary (which shall have been accepted for record by the Maryland State
Department of Assessments and Taxation) setting forth the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, and qualifications or terms or conditions of redemption, and (b) the
Preferred Shares have been duly executed and countersigned, and issued and sold
in the form and in the manner contemplated in the Registration Statement,
including the Prospectus and the related Prospectus Supplement(s), and assuming
that (c) the terms of the Preferred Shares as executed and delivered do not
violate any law applicable to the Company or result in a default under or breach
of any agreement or instrument binding upon the Company, and (d) the Preferred
Shares as executed and delivered comply with all requirements and restrictions,
if any, applicable to the Company, whether imposed by any court or governmental
or regulatory body having jurisdiction over the Company, the Preferred Shares
will be legally issued, fully paid and non-assessable;
(3) when (a) the applicable deposit agreement (the "Deposit Agreement") has
been duly authorized, executed and delivered, and (b) the terms of a particular
issuance of Depositary Shares have been duly established in accordance with the
Deposit Agreement and applicable law, and (c) the depositary receipts (the
"Depositary Receipts") evidencing Depositary Shares, in the form contemplated
and authorized by the Deposit Agreement, have been issued by a depositary (the
"Depositary") and duly executed on behalf of the Depositary and delivered to and
paid for by the purchasers thereof in the manner contemplated by the
Registration Statement, including the Prospectus, the related Prospectus
Supplement(s) and any registration statement required to be filed under the
Securities Act in respect of the issuance of the Depositary Shares by the
Depositary (the "Depositary Registration Statement"), and (d) the Depositary
Registration Statement and any required post-effective amendments thereto have
all become effective under the Securities Act, and assuming that (e) the terms
of the Depositary Shares as executed and delivered are as described in the
Registration Statement, including the Prospectus, the related Prospectus
Supplement(s) and the Depositary Registration Statement, and (f) all corporate
action necessary for the issuance of such Depositary Shares and the underlying
Preferred Stock has been taken, and (g) the issuance of the Depositary Shares
and the underlying Preferred Stock do not violate any law applicable to the
Company or result in a default under or breach of any agreement or instrument
binding upon the Company, and (h) the Depositary Shares and the underlying
Preferred Stock comply with all requirements and restrictions, if any,
applicable to the Company, whether imposed by any court or governmental or
regulatory body having
<PAGE>
Cabot Industrial Trust
February 1, 1999
Page 4
jurisdiction over the Company, and (i) the Depositary Shares are then issued and
sold as contemplated in the Registration Statement, including the Prospectus,
the related Prospectus Supplement(s) and the Depositary Registration Statement,
the Depositary Shares will be validly issued and will entitle the holders
thereof to the rights specified in the Depositary Receipts and the Deposit
Agreement;
(4) when (a) the applicable warrant agreement (the "Warrant Agreement")
between the Company and a financial institution identified therein as warrant
agent (each, a "Warrant Agent") has been duly authorized, executed and
delivered, and (b) the Warrants have been duly established in accordance with
the terms of the Warrant Agreement and applicable law, and (c) the Warrants have
been duly executed and countersigned in accordance with the Warrant Agreement
relating to such Warrants, and issued and sold in the form and in the manner
contemplated in the Registration Statement, including the Prospectus and the
related Prospectus Supplement(s), and assuming that (d) the terms of the
Warrants as executed and delivered do not violate any law applicable to the
Company or result in a default under or breach of any agreement or instrument
binding upon the Company, and (e) the Warrants as executed and delivered comply
with all requirements and restrictions, if any, applicable to the Company,
whether imposed by any court or governmental or regulatory body having
jurisdiction over the Company, the Warrants will constitute valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their terms;
(5) when (a) the Guarantees and the related Debt Securities have been duly
established in accordance with the terms of the Indenture (including, without
limitation, the adoption by the Board of Trustees of the Company, acting in its
own capacity and as general partner of the Operating Partnership, resolutions
duly authorizing the issuance and delivery of (i) the Guarantees by the Company
and (ii) the related Debt Securities by the Operating Partnership), and (b) the
Guarantees have been duly executed and delivered on behalf of the Company and
the related Debt Securities have been duly authenticated by the Trustee and duly
executed and delivered on behalf of the Operating Partnership against payment
therefor in accordance with the terms and provisions of the Indenture and as
contemplated by the Registration Statement, including the Prospectus and the
related Prospectus Supplement(s), and assuming that (c) the terms of the
Guarantees as executed and delivered are as described in the Registration
Statement, including the Prospectus and the related Prospectus Supplement(s),
and (d) the Guarantees as executed and delivered do not violate any law
applicable to the Company or result in a default under or breach of any
agreement or instrument binding upon the Company, the Guarantees will constitute
valid and legally binding obligations of the Company, enforceable against the
Company in accordance with their terms; and
<PAGE>
Cabot Industrial Trust
February 1, 1999
Page 5
(6) when (a) the Debt Securities have been duly established in accordance
with the terms of the Indenture (including, without limitation, the adoption by
the Board of Trustees of the Company, in its capacity as general partner of the
Operating Partnership, of a resolution duly authorizing the issuance and
delivery of the Debt Securities), and have been duly authenticated by the
Trustee and duly executed and delivered on behalf of the Operating Partnership
against payment therefor in accordance with the terms and provisions of the
Indenture and as contemplated by the Registration Statement, including the
Prospectus and the related Prospectus Supplement(s), and assuming that (b) the
terms of the Debt Securities as executed and delivered are as described in the
Registration Statement, including the Prospectus and the related Prospectus
Supplement(s), and (c) the Debt Securities as executed and delivered do not
violate any law applicable to the Operating Partnership or result in a default
under or breach of any agreement or instrument binding upon the Operating
Partnership, and (d) the Debt Securities as executed and delivered comply with
all requirements and restrictions, if any, applicable to the Operating
Partnership, whether imposed by any court or governmental or regulatory body
having jurisdiction over the Operating Partnership, the Debt Securities will
constitute valid and legally binding obligations of the Operating Partnership,
enforceable against the Operating Partnership in accordance with their terms.
The opinions set forth in paragraphs 3, 4, 5 and 6 above are subject to the
following exceptions, limitations and qualifications: (i) the effect of
bankruptcy, insolvency, reorganization, 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 at 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 any waiver of rights or defenses with respect to stay,
extension or usury laws; and (v) we express no opinion with respect to whether
acceleration of the Debt Securities may affect the collectability of any portion
of the stated principal amount thereof which might be determined to constitute
unearned interest thereon.
Insofar as the foregoing opinion involves matters governed by Maryland law,
we have relied, with your approval, upon the opinion of the law firm of Ballard
Spahr Andrews & Ingersoll and our opinion is subject to the assumptions,
limitations and qualifications set forth therein.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to all references to our firm in the Registration Statement.
<PAGE>
Cabot Industrial Trust
February 1, 1999
Page 6
Very truly yours,
MAYER, BROWN & PLATT
<PAGE>
EXHIBIT 5.2
[Ballard Spahr Andrews & Ingersoll letterhead]
February 1, 1999
Cabot Industrial Trust
Two Center Plaza, Suite 200
Boston, Massachusetts 02108
Cabot Industrial Properties, L.P.
Two Center Plaza, Suite 200
Boston, Massachusetts 02108
Re: Registration Statement on Form S-3
Registration No. 333-
----------------------------------
Ladies and Gentlemen:
We have served as Maryland counsel to Cabot Industrial Trust, a
Maryland real estate investment trust (the "Company"), in its individual
capacity and in its capacity as general partner of Cabot Industrial Properties,
L.P., a Delaware limited partnership (the "Operating Partnership"), in
connection with certain matters of Maryland law arising out of the registration
of the following securities, having an aggregate initial offering price of up
to $1,000,000,000 (collectively, the "Securities"): (a) Common Shares of
Beneficial Interest, par value $.01 per share, of the Company ("Common Shares"),
(b) Preferred Shares of Beneficial Interest, par value $.01 per share, of the
Company ("Preferred Shares"), (c) warrants to purchase Common Shares or
Preferred Shares ("Warrants"), (d) Depositary Shares representing Preferred
Shares ("Depositary Shares") and (e) Guarantees ("Guarantees") by the Company of
debt securities (the "Debt Securities") issued by the Operating Partnership, all
covered by the above-referenced Registration Statement, and any amendments
thereto (the "Registration Statement"), filed by the Company and the Operating
Partnership with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "1933 Act").
<PAGE>
Cabot Industrial Trust
February 1, 1999
Page 2
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 and 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 Declaration of Trust of the Company, certified as of a recent
date by the State Department of Assessments and Taxation of Maryland (the
"SDAT");
3. The Bylaws of the Company, certified as of the date hereof by its
Secretary;
4. Resolutions (the "Resolutions") adopted by the Board of Trustees
of the Company, or a duly authorized committee thereof, relating to the sale,
issuance and registration of the Common Shares, the Preferred Shares, the
Warrants, the Depositary Shares and the Guarantees, certified as of the date
hereof by the Secretary of the Company;
5. A certificate of the SDAT as to the good standing of the Company,
dated as of a recent date;
6. A certificate executed by Neil E. Waisnor, Senior Vice President-
Finance, Treasurer and Secretary of the Company, as of the date hereof; and
7. 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:
<PAGE>
Cabot Industrial Trust
February 1, 1999
Page 3
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.
4. Any Documents submitted to us as originals are authentic. The form
and content of the Documents submitted to us as unexecuted drafts do not differ
in any respect relevant to this opinion from the form and content of such
Documents as executed and delivered. Any 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 omission of the
parties or otherwise.
5. The outstanding shares of beneficial interest of the Company have not
been and will not be transferred in violation of any restriction or limitation
contained in the Declaration of Trust. The Securities will not be transferred in
violation of any restriction or limitation contained in the Declaration of
Trust.
6. The issuance and certain terms of the Securities to be issued by the
Company from time to time will be approved by the Board of Trustees of the
Company, or a duly authorized committee thereof, in accordance with Maryland
law (with such approval referred to herein as the "Corporate Proceedings").
7. None of the terms of any of the Securities, or any agreements related
thereto, to be established subsequent to the date hereof, nor the issuance and
delivery of any such Securities, nor the compliance by the Company with the
terms of any such Securities or agreements will violate any applicable law
<PAGE>
Cabot Industrial Trust
February 1, 1999
Page 4
or will conflict with, or result in a breach or violation of, the Declaration of
Trust or Bylaws of the Company, or any instrument or agreement to which the
Company is a party or by which the Company is bound, or any order or decree of
any court, administrative or governmental body having jurisdiction over the
Company.
8. The form of certificate or other instrument or document evidencing
the Securities will conform in all respects to the requirements of Maryland law.
9. None of the Securities, and none of the Preferred Shares of
Beneficial Interest or Common Shares of Beneficial Interest issuable upon the
conversion or exchange of Preferred Shares or exercise of the Warrants, or the
Depositary Shares or related Depositary Receipts, will be issued and sold in
violation of the provisions of Article 3 of the Declaration of Trust of the
Company, entitled "Restriction on Transfer, Acquisition and Redemption of
Shares."
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 real estate investment trust duly formed 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 all Corporate Proceedings relating to the Common
Shares and the due execution, countersignature and delivery of certificates
evidencing the Common Shares, the Common Shares will be (assuming that, upon
issuance, the total number of Common Shares of Beneficial Interest issued and
outstanding will not exceed the total number of Common Shares of Beneficial
Interest that the Company is then authorized to issue under the Declaration of
Trust) duly authorized and, when and it delivered against payment therefor in
accordance with the Corporate Proceedings will be validly issued, fully paid and
nonassessable.
<PAGE>
Cabot Industrial Trust
February 1, 1999
Page 5
3. Upon (a) designation by the Board of Trustees of the Company of one
or more classes or series of preferred shares of beneficial interest to
distinguish each such class or series from other then outstanding classes or
series of preferred shares of beneficial interest, (b) setting by the Board of
Trustees of the number of preferred shares of beneficial interest to be included
in each such class or series, (c) establishment by the Board of Trustees of the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption of each such class or series of preferred shares of beneficial
interest, (d) filing with, and acceptance for record by, the SDAT of appropriate
Articles Supplementary for each such class or series of shares of beneficial
interest, (e) completion of all Corporate Proceedings relating to the Preferred
Shares and (f) the due execution, countersignature and delivery of certificates
evidencing the Preferred Shares, the Preferred Shares will be (assuming that,
upon issuance, the total number of preferred shares of beneficial interest
issued and outstanding will not exceed the total number of preferred shares of
beneficial interest, and the number of preferred shares of beneficial interest
of the same class or series as the Preferred Shares issued and outstanding will
not exceed the total number of preferred shares of beneficial interest of such
class or series, that the Company is then authorized to issue under the
Declaration of Trust) duly authorized and, when and if delivered against payment
therefor in accordance with the Corporate Proceedings, will be validly issued,
fully paid and nonassessable.
4. Upon (a) designation and titling by the Board of Trustees of the
Depositary Shares, (b) setting by the Board of Trustees of the number of
Depositary Shares to be issued, (c) establishment by the Board of Trustees of
the terms, conditions and provisions of the Depositary Shares and any related
agreements, (d) due authorization by the Board of Trustees of the execution and
delivery by the Company of the Deposit Agreement relating to the Depositary
Shares, (e) due authorization and issuance by the Company of the Preferred
Shares to be evidenced by the Depositary Shares in accordance with the
procedures set forth in Paragraph 3 above, (f) completion of all Corporate
proceedings relating to the Depositary Shares and (g) the due execution,
countersignature and delivery of certificates evidencing the Preferred Shares to
be evidenced by the Depositary Shares, the Preferred Shares to be evidenced by
the Depositary Shares will be (assuming that, upon issuance, the total number of
preferred shares of beneficial interest issued and outstanding
<PAGE>
Cabot Industrial Trust
February 1, 1999
Page 6
will not exceed the total number of preferred shares of beneficial interest, and
the number of preferred shares of beneficial interest of the same class or
series as the Preferred Shares issued and outstanding will not exceed the total
number of preferred shares of beneficial interest of such class or series, that
the Company is then authorized to issue under the Declaration of Trust) duly
authorized and, when and if delivered against payment therefor in accordance
with the Corporate Proceedings, will be validly issued, fully paid and
nonassessable.
5. Upon (a) due authorization by the Board of Trustees of the issuance,
execution and delivery by the Company in its capacity as general partner of the
Operating Partnership of the Debt Securities and the execution and delivery by
the Company in its individual capacity of the Guarantees, (b) the establishment
of the terms, conditions and provisions of the Debt Securities, the Guarantees
and any related agreements (including any indenture or indentures pertaining
thereto) by the Board of Trustees or a duly authorized officer of the Company,
acting on behalf of the Company in its individual capacity or in its capacity as
general partner of the Operating Partnership, as the case may be, and (c)
completion of all Corporate Proceedings relating to the execution, delivery and
performance of the Debt Securities by the Operating Partnership and of the
Guarantees by the Company, the execution, delivery and performance of the Debt
Securities by the Operating Partnership and the execution, delivery and
performance of the Guarantees by the Company will have been duly authorized by
all necessary corporate action on the part of the Company, acting in its
individual capacity and in its capacity as general partner of the Operating
Partnership, as the case may be.
6. Upon (a) due authorization by the Board of Trustees of the issuance,
execution and delivery by the Company of the Warrants, (b) the establishment of
the terms, conditions and provisions of the Warrants by the Board of Trustees or
a duly authorized officer of the Company, acting on behalf of the Company, and
(c) completion of all Corporate Proceedings relating to the execution, delivery
and performance of the Warrants by the Company, the execution, delivery and
performance of the Warrants will have been duly authorized by all necessary
corporate action on the part of the Company.
The opinion expressed herein with respect to authorization by the Company
is limited to the Company's power and authority under its Declaration of Trust
and Bylaws and under
<PAGE>
Cabot Industrial Trust
February 1, 1999
Page 7
Maryland law, and we express no opinion with respect to the power or authority
of the Company under the Partnership Agreement of the Operating Partnership.
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 compliance with the securities (or "blue sky") laws or
the real estate syndication laws of the State of Maryland.
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 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
(except Mayer, Brown & Platt, 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 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,
Ballard Spahr Andrews & Ingersoll
<PAGE>
Exhibit 8.1
[Mayer, Brown & Platt letterhead]
February 1, 1999
Cabot Industrial Trust
Two Center Plaza, Suite 200
Boston, Massachusetts 02108
RE: Partnership Classification; Status as a Real Estate Investment Trust
("REIT"); Information in the Prospectus under "FEDERAL INCOME TAX
CONSEQUENCES"
--------------------------------------------------------------------------
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-3 to be filed with
the Securities and Exchange Commission on February 1, 1999 (the "Registration
Statement") relating to the offering of Offered Securities/1/ in Cabot
Industrial Trust, a Maryland real estate investment trust (the "Company") and
Cabot Industrial Properties, L.P., a Delaware limited partnership (the
"Operating Partnership"), you have requested our opinions concerning (i) the
treatment of the Operating Partnership as a partnership for Federal income tax
purposes, and not as an association taxable as a corporation; (ii) the
qualification and taxation for Federal income tax purposes of the Company as a
REIT; and (iii) the information in the Prospectus under the heading "FEDERAL
INCOME TAX CONSEQUENCES."
In formulating our opinions, we have reviewed and relied upon (i) the
Operating Partnership Agreement, the Declaration of Trust and Bylaws of the
Company, the Certificate of Incorporation and the Bylaws of the Management
Company (collectively, the "Organizational Documents"), (ii) the Prospectus and
(iii) such other documents and information provided by you, and such applicable
provisions of law as we have considered necessary for purposes of the opinions
expressed herein.
In addition, we have relied upon the Company's certificate (the "Officer's
Certificate"), executed by a duly appointed officer of the Company, setting
forth certain representations relating to the organization and the actual and
the proposed method of operation of the
- ---------------------------
/1/ Unless otherwise specifically defined herein, all capitalized terms have
the meaning assigned to them in the Registration Statement.
<PAGE>
Cabot Industrial Trust
February 1, 1999
Page 2
Company, the Operating Partnership, and the Management Company. For purposes of
our opinions, we have not made an independent investigation of the facts and
representations set forth in the Officer's Certificate or in the Organizational
Documents or any of the information set forth in the Registration Statement. We
have, consequently, relied upon your representations that the information
presented in such documents accurately and completely describes all material
facts. No facts have come to our attention, however, that would cause us to
question the accuracy or completeness of such facts or documents in any material
respect.
In rendering these opinions, we have assumed (i) the Company, the Operating
Partnership, and the Management Company will each be operated in the manner
described in the applicable Organizational Documents and in the Prospectus, and
that all terms and provisions of such agreements and documents will be complied
with by all parties thereto; and (ii) each partner in the Operating Partnership
has been motivated in acquiring its partnership interest by its anticipation of
economic rewards apart from tax considerations.
The opinions expressed herein are based on the Code, the Treasury
regulations promulgated thereunder, and interpretations of the Code and such
regulations by the courts and the Internal Revenue Service, all as they are in
effect and exist at the date of this letter. It should be noted that statutes,
regulations, judicial decisions, and administrative interpretations are subject
to change at any time and, in some circumstances, with retroactive effect. A
material change that is made after the date hereof in any of the foregoing bases
for our opinions could adversely affect our conclusions. Other than as
expressly stated below, we express no opinion on any issue relating to the
Operating Partnership, the Company or to any investment therein.
Based upon and subject to the foregoing, it is our opinion that:
1. The Operating Partnership will be treated, for Federal income tax
purposes, as a partnership, and not as an association taxable as a corporation.
2. Beginning with the Company's taxable year ended December 31, 1998, and
assuming that the actions contemplated in the Prospectus are completed in a
timely fashion, the Company has been organized in conformity with the
requirements for qualification as a REIT under the Code, and the Company's
actual and proposed method of operation, as described in the Prospectus and as
represented in the Officer's Certificate, will enable it to satisfy the
requirements for qualification as a REIT.
3. The information in the Prospectus under the heading "FEDERAL INCOME
TAX CONSEQUENCES," to the extent that it constitutes matters of law, summaries
of legal matters, or legal conclusions, has been reviewed by us and is correct
in all material respects.
<PAGE>
Cabot Industrial Trust
February 1, 1999
Page 3
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.
Very truly yours,
MAYER, BROWN & PLATT
<PAGE>
Exhibit 12.1
CABOT INDUSTRIAL TRUST
Computation of Ratio of Earnings to
Fixed Charges and Preferred Stock Dividends (a)
(Dollars in thousands)
<TABLE>
<CAPTION>
For the Nine
Months Ended
September 30,
1998
-------------
<S> <C>
Income (loss) from continuing operations
before minority interest expense and earnings
from equity investments.......................... $ 36,091
Plus interest expense and amortization
of deferred financing costs...................... 3,317
-----------
Earnings before minority interest
expense and fixed charges........................ $ 39,408
===========
Fixed charges and preferred stock
dividends (b), (c)............................... $ 3,779
===========
Ratio of earnings to combined fixed charges
and preferred stock dividends.................... 10.43x
===========
</TABLE>
- ----------------------
(a) The Company completed its initial public offering on February 4, 1998.
(b) There was no preferred stock outstanding during the period ended
September 30, 1998.
(c) Fixed charges consist of interest expense (including amortization of
deferred financing costs) and capitalized interest.
<PAGE>
Exhibit 12.2
CABOT INDUSTRIAL PROPERTIES, L.P.
Computation of Ratio of Earnings to
Fixed Charges and Preferred Distributions (a)
(Dollars in thousands)
<TABLE>
<CAPTION>
For the Nine
Months Ended
September 30,
1998
-------------
<S> <C>
Income (loss) from continuing operations before
earnings from equity investments................. $ 36,091
Plus interest expense and amortization
of deferred financing costs...................... 3,317
-----------
Earnings before fixed charges....................... $ 39,408
===========
Fixed charges and preferred
distributions (b), (c)........................... $ 3,779
===========
Ratio of earnings to combined fixed charges
and preferred distributions...................... 10.43x
===========
</TABLE>
- ----------------------
(a) The Operating Partnership commenced operations on February 4, 1998.
(b) There were no preference securities outstanding during the period ended
September 30, 1998.
(c) Fixed charges consist of interest expense (including amortization of
deferred financing costs) and capitalized interest.
<PAGE>
Exhibit 12.3
EXISTING INVESTORS PROPERTY GROUP
Computation of Ratio of Earnings to Fixed Charges
(Dollars in thousands)
<TABLE>
<CAPTION>
For the year ended December 31,
-----------------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Income (loss) from continuing
operations...................... $ 19,263 $ 15,923 $ 12,243 $ 12,875 $ 8,757
Plus interest expense and
amortization of deferred
financing costs................. 2,209 2,011 2,160 2,184 2,117
----------- ----------- ----------- ----------- -----------
Earnings before fixed charges...... $ 21,472 $ 17,934 $ 14,403 $ 15,059 $ 10,874
=========== =========== =========== =========== ===========
Fixed charges (a), (b)............. $ 2,209 $ 2,011 $ 2,160 $ 2,184 $ 2,117
=========== =========== =========== =========== ===========
Ratio of earnings to fixed
charges.......................... 9.72x 8.92x 6.67x 6.90x 5.14x
=========== =========== =========== =========== ===========
</TABLE>
- --------------------------------------
(a) There were no preferred securities outstanding during the above periods.
(b) Fixed charges consist of interest expense. There was no capitalized
interest during the above periods.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our reports
covering the audited historical financial statements of Knickerbocker
Properties, Inc. II, dated July 20, 1998 and The Phoenix Group, dated August 12,
1998, incorporated by reference into this registration statement of Cabot
Industrial Trust on Form S-3.
Arthur Andersen LLP
New York, New York
January 29, 1999
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our reports
covering the audited historical financial statements of Cabot Industrial Trust,
dated March 27, 1998, Cabot Partners Limited Partnership, dated March 27, 1998,
Cabot Industrial Properties, L.P., dated March 27, 1998, Existing Investors
Property Group, dated July 13, 1998, Prudential Properties Group, dated July 13,
1998, West Coast Industrial, LLC, dated June 30, 1998, The 4 B's, dated August
3, 1998, Seefried Properties Group, dated June 30, 1998, Prudential Properties
Group II, dated June 30, 1998, DFW Trade Center I, L.P., Buildings 1, 2 and 3,
dated June 30, 1998, 1055 Dornoch Court, San Diego, CA, dated June 30, 1998,
Hampden I and II Properties Group, dated June 30, 1998, South Royal Associates
Properties Group, dated June 30, 1998, Joseph A. Leroy Family LP Property, dated
June 30, 1998, Raco/Melaver, L.L.C., dated June 30, 1998, TLI/Cahill
Partnership--Spiral Drive, dated June 30, 1998, Terraden/Ontario, I L.P., dated
June 30, 1998, Kojo Building Property Group, dated June 30, 1998, Everest
Investments Limited Partnership Property Group, dated July 10, 1998, Arizona
Property, dated January 28, 1999 and Hemmer Properties Group, dated January 28,
1999, included in or incorporated by reference into this registration statement
of Cabot Industrial Trust on Form S-3.
Arthur Andersen LLP
Boston, Massachusetts
January 29, 1999
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
The Board of Trustees of
Cabot Industrial Trust:
We consent to incorporation by reference herein of our report dated July 2,
1998, relating to the combined balance sheets of the Pennsylvania Public School
Employes' Retirement System Industrial Properties Portfolio as of December 31,
1997 and 1996, and the related combined statements of operations, owner's
equity, and cash flows for the years ended December 31, 1997, 1996 and the
period from July 6, 1995 (date of acquisition) to December 31, 1995, and the
related schedule as of December 31, 1997, incorporated by reference herein, and
to the reference to our firm under the heading "Experts" in this registration
statement on Form S-3 of Cabot Industrial Trust.
KPMG LLP
Chicago, Illinois
February 1, 1999
<PAGE>
EXHIBIT 23.4.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference into the registration statement of
Cabot Industrial Trust and Cabot Industrial Properties, L.P. on Form S-3 of our
report dated July 1, 1998 on our audits of the historical cost basis combined
financial statements of Orlando Central Park and 500 Memorial Drive as of
December 31, 1997 and 1996 and for each of the three years in the period ended
December 31, 1997. We also consent to the reference to our firm under the
caption "Experts."
PricewaterhouseCoopers LLP
New York, New York
February 1, 1999
<PAGE>
EXHIBIT 23.4.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this registration statement of
Cabot Industrial Trust on Form S-3 of our report dated April 25, 1997 on our
audits of the historical cost basis financial statements of Knickerbocker
Properties, Inc. II as of December 31, 1996 and 1995, and for each of the two
years in the period ended December 31, 1996. We also consent to the reference to
our firm under the caption "Experts."
PricewaterhouseCoopers LLP
Atlanta, Georgia
February 1, 1999
