<PAGE>
As filed with the Securities and Exchange Commission on March 22, 1999
Registration No. 333-71585
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
AMENDMENT NO. 1
To
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 in its (Exact name of Registrant as specified in its
charter) charter)
</TABLE>
<TABLE>
<S> <C>
Delaware Maryland
(State or other jurisdiction of incorporation or (State or other jurisdiction of incorporation or
organization) organization)
04-3397874 04-3397866
(I.R.S. Employer Identification Number) (I.R.S. Employer 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: [_]
---------------
The Registrants hereby amend this Registration Statement on the 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 the date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
(continued on next page)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
(Continued from previous page)
CALCULATION OF REGISTRATION FEE
<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(2) Offering Price Fee(3)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cabot Industrial Trust $ 400,000,000(4) N/A $400,000,000(4) $111,200
- -------------------------------------------------------------------------------
Common shares of beneficial
interest, par value
$.01 per share(5) (4) N/A (4) --
- -------------------------------------------------------------------------------
Preferred shares of
beneficial interest, par
value $.01 per share(6) (4) N/A (4) --
- -------------------------------------------------------------------------------
Depositary shares
representing preferred
shares(7) (4) N/A (4) --
- -------------------------------------------------------------------------------
Warrants(8) (4) N/A (4) --
- ------------------------------------------------------------------------------------------------
Guarantees of debt
securities N/A N/A N/A N/A
- -------------------------------------------------------------------------------
Cabot Industrial Properties,
L.P. $ 600,000,000 N/A $ 600,000,000 $166,800
- ------------------------------------------------------------------------------------------------
Debt securities N/A
- ------------------------------------------------------------------------------------------------
Total $1,000,000,000 N/A $1,000,000,000 $278,000(9)
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
</TABLE>
(1) The common shares, preferred shares, depositary share, warrants and
guarantees of debt securities will be issued by Cabot Industrial Trust.
The debt securities will be issued by Cabot Industrial Properties, L.P.
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) 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.
(5) This registration statement registers up $400,000,000 in aggregate
offering price of common shares that may be sold by Cabot Trust, together
with such indeterminate number of common shares as may be issued upon
conversion of preferred shares, or upon the exercise of the warrants,
registered hereunder, as applicable. 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 the preferred share purchase rights.
(6) This registration statement registers up to $400,000,000 in aggregate
offering price of preferred shares that may be sold by Cabot Trust,
together with such indeterminate number of preferred shares as may be
issued upon exchange of depositary shares or exercise of warrants
registered hereunder.
(7) To be represented by depositary receipts that will represent an interest
in all or a specified portion of a preferred share.
(8) The warrants registered hereunder are warrants representing rights to
purchase common shares or preferred shares registered hereunder, as
designated by Cabot Trust at the time of any such offering.
(9) This fee was paid in connection with the original filing of this
Registration Statement.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this preliminary prospectus supplement is not complete and +
+may be changed. We may not sell these securities, nor may we accept offers to +
+buy them, without first delivering a final prospectus supplement and +
+accompanying prospectus. This preliminary prospectus supplement and +
+accompanying prospectus is not an offer to sell, and we are not soliciting +
+any offers to buy, these securities in any jurisdiction where the offer or +
+sale is not permitted. +
+ +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion, dated , 1999
Prospectus Supplement
(To Prospectus dated , 1999)
[LOGO]
Cabot Industrial Properties, L.P.
$
% Notes due 200
Issue price:
Interest payable and
The notes will mature on , 200 . Interest will accrue on the notes from
, 1999. We may redeem some or all of the notes at any time prior to
maturity at the redemption price described on page S-33. The notes will be
issued in minimum denominations of $1,000 and in integral multiples of that
amount.
The notes will be unsecured and will rank equally with all of our other
unsecured senior indebtedness.
See "Risk Factors" beginning on page 1 of the accompanying prospectus for a
discussion of material risks that should be considered in connection with an
investment in the notes.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus supplement or the accompanying prospectus is accurate or
complete. Any representation to the contrary is a criminal offense.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Price to Discounts and Proceeds to
Public Commissions Cabot L.P.
- -----------------------------------------------
<S> <C> <C> <C>
Per Note % % %
- -----------------------------------------------
Total $ $ $
- -----------------------------------------------
</TABLE>
We intend to list the notes on the New York Stock Exchange. Currently, there is
no public market for the notes.
We expect that delivery of the notes will be made to investors on or about
, 1999 through the facilities of The Depository Trust Company.
J.P. Morgan & Co.
, 1999
<PAGE>
You should rely only on the information provided or incorporated by reference
in this prospectus supplement and the accompanying prospectus. We have not
authorized anyone to give you any different information. This prospectus
supplement and the accompanying prospectus do not constitute an offer to sell
or a solicitation of an offer to buy any securities other than the notes
described in this prospectus supplement or an offer to sell or a solicitation
of an offer to buy the notes in any jurisdiction in which an offer or
solicitation would be unlawful.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Supplement
Summary................................................................. S-3
Information about Cabot L.P. ........................................... S-9
Use of Proceeds......................................................... S-15
Ratio of Earnings to Fixed Charges...................................... S-14
Capitalization.......................................................... S-14
Selected Financial and Other Data....................................... S-15
Property Information.................................................... S-17
Management.............................................................. S-27
Description of the Notes................................................ S-31
Underwriting............................................................ S-41
Legal Matters........................................................... S-42
Prospectus
Table of Contents ...................................................... i
Risk Factors............................................................ 1
About This Prospectus................................................... 8
Where You Can Find More Information..................................... 9
Forward-Looking Statements.............................................. 10
Cabot Trust and Cabot L.P............................................... 10
Use of Proceeds......................................................... 11
Ratios of Earnings to Fixed Charges..................................... 11
Description of Debt Securities.......................................... 11
Description of Guarantees of Debt Securities............................ 23
Description of Common Shares............................................ 24
Description of Preferred Shares......................................... 28
Description of Depositary Shares........................................ 35
Description of Warrants................................................. 38
Description of Securityholder Purchase Rights........................... 39
Selected Provisions of Maryland Law and of Cabot Trust's Declaration of
Trust and Bylaws....................................................... 39
Cabot L.P. Partnership Agreement........................................ 43
Federal Income Tax Consequences......................................... 45
Plan of Distribution.................................................... 55
Legal Matters........................................................... 56
Experts................................................................. 56
Information Concerning Cabot L.P. ...................................... 57
Index to Financial Statements .......................................... F-1
</TABLE>
S-2
<PAGE>
SUMMARY
Except as otherwise indicated, all references in this prospectus supplement to
"Cabot L.P.," "we," "us," "our" and similar references mean Cabot Industrial
Properties, L.P. and its subsidiaries. All references to "Cabot Trust" mean
Cabot Industrial Trust, including Cabot L.P.
Cabot Industrial Properties, L.P.
Cabot L.P. began operations upon the completion of the initial public offering
of Cabot Trust, our sole general partner, in February 1998. We hold or control
substantially all of the assets of Cabot Trust, including its portfolio of
industrial properties, and conduct substantially all of its operations. As of
December 31, 1998, Cabot Trust owned approximately 42.7% of our partnership
interests.
Cabot Trust was organized in October 1997 as a Maryland real estate investment
trust to continue and expand the national industrial real estate business of
Cabot Partners Limited Partnership. Cabot Trust is an internally managed real
estate company which, acting through us, acquires or develops, leases, manages
and holds for investment a diversified portfolio of industrial real estate
located in principal markets throughout the United States.
We own and operate bulk distribution, multitenant distribution and workspace
properties. Our workspace properties include light industrial, research, back
office and combination office/warehouse properties. As of December 31, 1998,
our portfolio consisted of 206 properties, which aggregated approximately 28
million rentable square feet and included:
.55 bulk distribution properties aggregating 13,137,873 rentable square
feet;
.61 multitenant distribution properties aggregating 9,568,641 rentable
square feet; and
.90 workspace properties aggregating 5,326,477 rentable square feet.
During the period from January 1, 1999 through March 8, 1999, we acquired two
additional industrial properties containing approximately 139,000 rentable
square feet and, as of March 8, 1999, have contracted to purchase 33 additional
industrial properties containing approximately 1,822,000 rentable square feet.
As of December 31, 1998, our properties were approximately 97% leased to 414
tenants. We believe that we have achieved high occupancy and tenant retention
rates due to our properties' favorable locations and our management expertise.
Our portfolio is geographically diverse, with properties in 21 states and no
single market accounting for more than 12.4% of our rentable square feet as of
December 31, 1998. Our tenant base is also diversified across industries, with
no single tenant accounting for more than 4.0% of our annualized base rent as
of that same date.
Our goal is to be the preeminent national real estate company focused on
serving a variety of industrial space users. We have a significant market
presence across the United States, owning properties in a total of 21 markets,
18 of which we have identified as principal targeted markets. We own properties
with more than one million rentable square feet in ten of those markets.
In addition to acquiring existing industrial properties, we selectively develop
new industrial properties in submarkets of our existing markets where we
believe that property development will
S-3
<PAGE>
produce higher returns than acquiring existing properties. To limit overhead
expenses associated with our development program, we currently use local
builders with whom we have established strong relationships to provide
construction services and to assist in the lease-up of the newly constructed
properties.
The seven individuals who comprise our senior management have an average of
approximately 19 years of experience in the real estate industry. They have
worked together since 1987, as executive officers of Cabot Partners Limited
Partnership prior to the formation of Cabot Trust and, previously, as executive
officers of Cabot, Cabot & Forbes Realty Advisors, Inc. Realty 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.
S-4
<PAGE>
Organization
The following diagram depicts our organizational structure in summary form,
giving effect to the issuance of the notes offered by this prospectus
supplement, assuming conversion of limited partnership units held by tax exempt
entities, all of which have indicated their intention to convert their
partnership interests into common shares of Cabot Trust. Without giving effect
to any conversion of limited partnership units, Cabot Trust owned a 42.7%
general partnership interest in us as of December 31, 1998.
[CHART OF CABOT L.P.'S ORGANIZATION]
S-5
<PAGE>
Properties
The following table provides information regarding the properties we owned as
of December 31, 1998, organized by property type.
<TABLE>
<CAPTION>
Rentable Square
Feet Annualized Net Rent(1)
---------------- --------------------------
Per
Leased
Number of % of % of Square
Property Type by Region Properties Amount Total Amount Total Foot
- ----------------------- ---------- ---------- ----- ------------ ----- ------
<S> <C> <C> <C> <C> <C> <C>
Bulk Distribution
Properties:
West.................... 18 3,721,208 13.3% $ 11,564,643 10.9% 3.37
Southwest............... 4 1,326,200 4.8 4,156,595 3.9 3.13
Midwest................. 18 4,256,937 15.2 12,420,395 11.7 3.00
Southeast............... 5 1,355,266 4.8 4,515,121 4.2 3.33
Northeast............... 10 2,478,262 8.8 9,538,615 8.9 3.85
----- ---------- ----- ------------ ----- -----
Subtotal/weighted
average............... 55 13,137,873 46.9% $ 42,195,369 39.6% 3.32
===== ========== ===== ============ ===== =====
Multitenant Distribution
Properties:
West.................... 18 2,598,763 9.2% $ 9,329,757 8.8% 3.59
Southwest............... 5 592,074 2.1 2,048,818 1.9 3.46
Midwest................. 15 2,318,686 8.3 8,648,936 8.1 3.91
Southeast............... 11 1,899,234 6.8 5,790,116 5.5 3.24
Northeast............... 12 2,159,884 7.7 8,448,634 7.9 3.91
----- ---------- ----- ------------ ----- -----
Subtotal/weighted
average.............. 61 9,568,641 34.1% $ 34,266,261 32.2% 3.66
===== ========== ===== ============ ===== =====
Workspace Properties:
West.................... 41 1,869,634 6.7% $ 10,345,351 9.7% 5.63
Southwest............... 2 255,736 0.9 2,048,714 1.9 8.01
Midwest................. 13 912,158 3.2 5,696,440 5.3 6.63
Southeast............... 15 1,066,363 3.8 4,679,049 4.4 4.47
Northeast............... 19 1,222,586 4.4 7,302,493 6.9 6.02
----- ---------- ----- ------------ ----- -----
Subtotal/weighted
average.............. 90 5,326,477 19.0% $ 30,072,047 28.2% 5.77
----- ---------- ----- ------------ ----- -----
Total/weighted average.. 206 28,032,991 100.0% $106,533,677 100.0% 3.90
===== ========== ===== ============ ===== =====
Properties by Region:
West.................... 77 8,189,605 29.2% $ 31,239,751 29.4% 3.97
Southwest............... 11 2,174,010 7.8 8,254,127 7.7 3.80
Midwest................. 46 7,487,781 26.7 26,765,771 25.1 3.71
Southeast............... 31 4,320,863 15.4 14,984,286 14.1 3.58
Northeast............... 41 5,860,732 20.9 25,289,742 23.7 4.32
----- ---------- ----- ------------ ----- -----
Total/weighted average.. 206 28,032,991 100.0% $106,533,677 100.0% 3.90
===== ========== ===== ============ ===== =====
</TABLE>
(1) "Annualized net rent" means annualized monthly net rent from leases in
effect as of December 31, 1998. "Net rent" means contractual rent,
excluding any reimbursements for real estate taxes or operating expenses.
S-6
<PAGE>
Business and Growth Strategies
Our fundamental business objective is to maximize the total return to our
investors through growth in our cash available for distribution and in the
value of our portfolio of industrial properties and business by implementing
our business and growth strategies.
Our principal business strategies are to leverage our substantial national
market presence and to serve a variety of tenants by offering a broad spectrum
of industrial property types. We believe that maintaining and expanding our
market presence in our 18 principal targeted markets across the country will be
an important factor in achieving future growth and our targeted returns on
investment. We also believe that offering a broad spectrum of industrial
property types enables us to provide better service on a more cost-efficient
basis to national customers who need various types of workspace properties, in
addition to distribution space, for their local operations.
Our growth strategy is to grow through a combination of industrial property
acquisitions, internal growth and development of new industrial properties. We
seek to capitalize on our competitive advantages primarily by acquiring modern,
high-quality properties in attractive submarkets within the industrial markets
that we currently serve. Our primary internal growth strategy is to increase
the cash flow generated by our properties, and from properties that we acquire
in the future, by renewing or replacing expiring leases with new leases at
higher rental rates and through rent increase provisions in our leases.
In our development program, we identify submarkets in our targeted market areas
in which we believe there are attractive opportunities for new development with
potentially greater returns than those available from the purchase of existing
properties. We then identify appropriate sites and property types for
development based on our extensive knowledge of local markets. Using our strong
relationships with local builders, we arrange for and manage the construction
and leasing of the properties we develop.
Financing Activities
In March 1998, we established a $325 million unsecured revolving credit
acquisition facility with a syndicate of banks led by Morgan Guaranty Trust
Company of New York. We use this facility to acquire and develop properties and
for working capital needs. As of March 8, 1999, we had $135 million outstanding
under this facility. The acquisition facility matures in March 2001.
In February 1999, we borrowed $87.6 million, secured by specified properties,
and used the proceeds of this borrowing to repay a portion of the balance
outstanding under our acquisition facility. At February 28, 1999, after giving
effect to this borrowing, we had unencumbered properties totaling approximately
23 million rentable square feet, or approximately 82% of our total rentable
square feet.
S-7
<PAGE>
The Offering
<TABLE>
<C> <S>
Securities Offered............... $ aggregate principal amount of % notes due 200 .
Maturity......................... , 200 .
Interest Payment Dates........... and , commencing , 1999.
Ranking.......................... The notes:
. will be our direct, senior unsecured obligations and
will not be obligations of or guaranteed by Cabot
Trust;
. will rank equally with our other unsecured and
unsubordinated indebtedness; and
. will be effectively subordinated to our mortgage
indebtedness, to any other secured indebtedness we
incur and to the indebtedness and other liabilities
of our subsidiaries.
Use of Proceeds.................. We estimate that the net proceeds from this offering
will be approximately $ million. We intend to use
these proceeds primarily to repay our outstanding
indebtedness under our acquisition facility and to use
the balance for general business purposes, including
the purchase or development of additional industrial
properties.
Optional Redemption ............. We may redeem some or all of the notes at any time at a
redemption price equal to the greater of (a) the
principal amount of the notes to be redeemed plus
accrued interest to the redemption date and (b) the sum
of the present values of the remaining scheduled
payments of interest and principal on the notes to be
redeemed plus accrued interest to the redemption date.
See "Description of the Notes--Optional Redemption."
Covenants........................ The indenture relating to the notes will contain
covenants that will limit our ability to:
. borrow money;
. use our assets as security in other transactions; and
. merge or consolidate with any other person or sell or
otherwise dispose of all or substantially all our
assets.
</TABLE>
S-8
<PAGE>
INFORMATION ABOUT CABOT L.P.
General
We own and operate bulk distribution, multitenant distribution and workspace
properties. As of December 31, 1998, our portfolio consisted of 206 properties,
which aggregated approximately 28 million rentable square feet and included:
.55 bulk distribution properties aggregating 13,137,873 rentable square
feet;
.61 multitenant distribution properties aggregating 9,568,641 rentable
square feet; and
.90 workspace properties aggregating 5,326,477 rentable square feet.
During the period from January 1, 1999 through March 8, 1999, we acquired two
additional industrial properties containing approximately 139,000 rentable
square feet and have, as of March 8, 1999, contracted to purchase 33 additional
industrial properties containing approximately 1,822,000 rentable square feet.
At December 31, 1998, our properties were approximately 97% leased to 414
tenants. We believe that we have achieved high occupancy and tenant retention
rates due to our properties' favorable locations and our management expertise.
Our portfolio is geographically diverse, with properties in 21 states and no
single market accounting for more than 12.4% of our total rentable square feet
as of December 31, 1998. Our tenant base is also diversified across industries,
with no single tenant accounting for more than 4.0% of our annualized base rent
as of that same date.
Our goal is to be the preeminent national real estate company focused on
serving a variety of industrial space users. We have a significant market
presence across the United States, owning properties in a total of 21 markets,
18 of which we have identified as principal targeted markets. We own properties
with more than one million rentable square feet in ten of those markets.
In addition to acquiring existing industrial properties, we selectively develop
new industrial properties in submarkets of our existing markets where we
believe that property development will produce higher returns than acquiring
existing properties. To limit overhead expenses associated with our development
program, we currently use local builders with whom we have established strong
relationships to provide construction services and to assist in the lease-up of
the newly constructed properties.
The seven individuals who comprise our senior management have an average of
approximately 19 years of experience in the real estate industry. They have
worked together since 1987 as executive officers of Cabot Partners Limited
Partnership prior to the formation of Cabot Trust and, previously, as executive
officers of Cabot, Cabot & Forbes Realty Advisors, Inc. Realty 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.
We are a Delaware limited partnership formed in October 1997. Our principal
executive offices are located at Two Center Plaza, Suite 200, Boston,
Massachusetts 02108, and our telephone number is (617) 723-0900.
S-9
<PAGE>
Business Strategies
Our fundamental business objective is to maximize the total return to our
investors through growth in our cash available for distribution and in the
value of our portfolio of industrial properties and operations. We believe that
we are well positioned to take advantage of the opportunities presented by
today's changing industrial real estate markets through the business strategies
and operations described below.
Leveraging Our Substantial National Market Presence
We believe that maintaining and expanding our market presence in our 18
principal targeted markets across the country will be an important factor in
achieving future growth and our targeted returns on investment.
Our substantial presence in our principal markets provides significant
strategic advantages. Foremost among these advantages is that we are well
positioned to market our industrial space to national companies, including
third-party logistics companies, who have space requirements in multiple
markets. We have a national tenant marketing program that, in addition to the
quality and attractive locations of our properties, emphasizes the advantages
of dealing with a single source for a company's industrial space needs. These
advantages include greater efficiency of lease negotiations and day-to-day
property management, as well as better understanding of the tenants' current
needs and prospective space requirements. We serve 23 tenants that use more
than one of our properties. These tenants accounted for approximately 21% of
our annualized base rents as of December 31, 1998. Four of those tenants lease
properties in multiple markets.
We believe that having a substantial inventory of properties and significant
leasing activities within each local market increases our visibility to
prospective tenants and enables us to establish strong relationships with
leasing brokers and other local market participants. These brokers and market
participants serve as sources of information and potential tenant referrals. In
addition, larger inventories of properties increase our opportunities to
relocate tenants to one or more of our other properties as their needs change.
A larger scale of operations in a local market also increases our economic
efficiency by enabling us to support the costs of the management personnel
needed to build long-term tenant relationships in that market and achieve
economies of scale.
Serving a Variety of Tenants by Offering a Broad Spectrum of Industrial
Property Types
We also believe that our strategy of offering a broad spectrum of industrial
property types provides complementary benefits in meeting our growth
objectives. Offering a broad spectrum of property types enables us to provide
better service, on a more cost-efficient basis, to national customers who may
need various types of workspace properties, in addition to distribution space,
for their local operations. At the same time, offering a variety of property
types suitable for smaller companies enables us to capture a larger share of
the growth in our chosen industrial property markets. This strategy of offering
diverse property types also enables us to pursue opportunities as they arise
across our tenant mix by responding to shifts in demand at different stages of
the economic cycle.
Growth Strategies
We intend to achieve our growth objectives through a combination of industrial
property acquisitions, internal growth and industrial property development.
S-10
<PAGE>
Acquisitions
Our principal growth strategy is to acquire additional modern, high-quality
properties in attractive submarkets within the industrial markets that we
currently serve. The focus of our acquisition activity is primarily on
acquiring individual properties and small collections of properties rather than
on large portfolios of properties. We believe this acquisition strategy enables
us to be highly selective as to building quality and projected long-term yields
of the properties we acquire.
Following the completion of Cabot Trust's initial public offering we acquired
84 properties during the remainder of 1998 in 41 separate transactions for an
aggregate purchase price of $426.2 million. These properties contain 9.6
million rentable square feet, of which 43.3% is bulk distribution, 29.6% is
multitenant distribution and 27.1% is workspace property.
During the period from January 1, 1999 through March 8, 1999, we acquired two
additional properties in the Dallas market, containing 139,287 rentable square
feet. As of March 8, 1999, we also have entered into contracts to acquire
properties containing 1,821,763 rentable square feet, including multiple
properties in each of the New York/New Jersey, Baltimore/Washington and
Cincinnati/Northern Kentucky markets and one property in the Minnesota market.
Emphasis on Market Research. We follow a disciplined, value-oriented strategy
in our property acquisitions. We seek to acquire modern, cost-efficient
buildings located in key national and regional distribution centers. Our
property acquisitions are based on extensive research in each targeted market
regarding:
.capitalization rates;
.economic and demographic trends;
.property replacement and operating costs;
.rent levels, historical occupancy rates and trends;
. construction quality and property conditions as well as the physical
characteristics of other buildings within the market;
.access to transportation, proximity to housing and local crime rates;
.location in modern industrial parks;
.the supply of and demand for industrial space in targeted submarkets;
and
.existing and potential tenant space requirements.
Our research includes extensive in-market activity by our employees, including
physical site inspections and continuing contacts with leasing brokers and
other active participants in the local markets. We have compiled the results of
our extensive research and that of Cabot Partners Limited Partnership over the
years into a proprietary database, which we update periodically and which
covers each market and submarket in which we have significant investments or
that we have targeted. This database contains computerized profiles, keyed to
aerial maps that we have prepared of our properties and each of the buildings
deemed most competitive to our properties or attractive for acquisition. These
profiles include information regarding the building's age, current tenant and
lease information and the building's physical characteristics, including
overall dimensions, clear heights and truck court dimensions.
S-11
<PAGE>
Diversification of Industrial Property Types. To date, approximately 72% of
our properties, based on annualized net rents at December 31, 1998, have been
bulk distribution and multitenant distribution facilities because of the
opportunities for superior returns those properties have provided. While we
expect that both types of properties will continue to be an important focus of
our future acquisition program, we believe that workspace properties are also
attractive in selected markets where they are in limited supply and strong
demand exists. We have increased our acquisitions of workspace properties,
which represented approximately 28% of our properties, based on annualized net
rents at December 31, 1998.
Relationships with Institutional Real Estate Investors. The operations of our
sponsor and organizer, Cabot Partners, were focused on serving public and
private pension funds and other institutional real estate investors in
connection with investments in and management of industrial real estate. This
has provided our management with an extensive knowledge of and, we believe, a
favorable reputation with these investors. We expect to benefit from our
relationships with them through further acquisitions as they increasingly seek
to securitize their direct real estate investments.
Capital and UPREIT Structure. As of December 31, 1998, we had $48.2 million
of fixed-rate debt secured by specified properties and $200.0 million of
unsecured borrowings. Cabot Trust had no separate indebtedness at that date and
had a consolidated debt-to-total market capitalization ratio of 22%. At
February 28, 1999, after giving effect to the closing of our $87.6 million
mortgage-secured borrowing in that month, we had unencumbered properties
totaling approximately 23 million rentable square feet and representing
approximately 82% of our total portfolio on a square footage basis.
We and Cabot Trust currently intend to maintain a ratio of debt-to-total market
capitalization of 40% or less. Although there is no limit in Cabot Trust's or
our organizational documents on the amount of indebtedness that we may incur,
the indenture under which the notes described in this prospectus supplement are
to be issued contains financial and operating covenants that limit our ability
to incur additional secured and unsecured indebtedness.
We intend to exploit our relatively unleveraged capital structure and
substantial equity base in our acquisition and future development activities.
Cabot Trust's UPREIT structure, which enables it to acquire industrial
properties on a non-cash basis by exchanging our limited partnership interests
for properties in a tax-deferred manner, provides an attractive alternative to
a taxable cash sale for tax-paying property owners.
Development
Our senior management has extensive real estate development experience,
including experience derived from the industrial park development activities of
Cabot, Cabot and Forbes Company. We
believe that in select target markets there are attractive opportunities for
new development with potentially greater returns that those available from the
purchase of existing stabilized properties, and we are pursuing a development
program where those opportunities exist. We are also engaging in discussions
with our existing tenants about their future space needs. Based on those
discussions, we believe that financially attractive build-to-suit opportunities
from our tenant base may be available over time.
To limit overhead expenses associated with our development program, we
currently use local builders with whom we have established strong relationships
to provide construction services and to assist in the lease-up of the newly
constructed properties. However, we may expand our in-house development staff
as our development activities increase.
S-12
<PAGE>
As of December 31, 1998, we had entered into contracts relating to ten
development projects with total projected development costs of approximately
$78 million and approximately 1.65 million square feet of projected rentable
space. These projects are located in nine of our existing markets and involve
construction of each of our three principal property types, but with a
particular weighting toward development of multitenant and workspace properties
with mid-sized tenant spaces of 4,000 to 50,000 square feet. These types of
properties have provided the strongest rental increases and face the least
competition from other developers.
We currently are in active negotiations regarding four additional projects with
projected development costs of approximately $60 million and approximately 1.17
million square feet of projected rentable space.
Increase Cash Flow Generated by Existing Properties
Our primary internal growth strategy is to increase the cash flow generated by
our existing properties, and from properties that we acquire in the future, by
renewing or replacing expiring leases with new leases at higher rental rates
and through rent increase provisions in our leases. In addition, we work
actively to:
. maintain our historically high occupancy levels by retaining existing
tenants, thereby minimizing "down time" and re-leasing costs;
. improve the occupancy levels of any newly acquired properties that have
lower occupancy levels than we typically expect from our existing
properties; and
. capitalize on economies of scale arising from the size of our portfolio
of properties and control costs.
Financing Activities
In March 1998, we established a $325 million unsecured revolving acquisition
facility with a syndicate of banks led by Morgan Guaranty Trust Company of New
York. We use this acquisition facility to acquire and develop properties and
for working capital needs. The applicable interest rate for this facility
ranges from LIBOR plus 75 basis points to LIBOR plus 125 basis points depending
on our loan-to-value ratio. As of March 8, 1999, we had $135 million
outstanding under this facility. The acquisition facility matures in March
2001.
In February 1999, we borrowed $87.6 million, secured by specified properties.
This indebtedness has an interest rate of 7.25% and the principal thereof is to
be repaid using a 25-year amortization schedule, but with a balloon payment
equal to the then outstanding balance to be due on March 1, 2009. The proceeds
of this borrowing were used to repay a portion of the balance outstanding under
our acquisition facility.
S-13
<PAGE>
USE OF PROCEEDS
We intend to use the net proceeds from the offering of these notes, which we
expect to be approximately $ million, primarily to repay the outstanding
indebtedness under our acquisition facility. We will use any remaining balance
for general business purposes, including the purchase or development of
additional industrial properties. As of March 8, 1999, our borrowings under the
acquisition facility bore an annual interest rate of LIBOR plus 100 basis
points.
RATIO OF EARNINGS TO FIXED CHARGES
Our ratio of earnings to fixed charges for the year ended December 31, 1998 was
7.25x.
The ratio of earnings to fixed charges is computed by dividing income from
continuing operations, excluding earnings from equity investments 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.
CAPITALIZATION
The following table sets forth our capitalization as of December 31, 1998 on a
historical basis and as adjusted to give effect to: (1) this offering, (2) the
application of the net proceeds of this offering as described under "Use of
Proceeds" above, and (3) our incurrence, in February 1999, of $87.6 million of
fixed rate mortgage indebtedness and the application of the proceeds of that
borrowing to repay a portion of the balance outstanding under our acquisition
facility.
<TABLE>
<CAPTION>
As of December 31,
1998
----------------------
Historical As Adjusted
---------- -----------
(dollars in thousands)
<S> <C> <C>
Debt:
Mortgage indebtedness.................................. $ 48,206 $135,823
Borrowings under acquisition facility.................. 200,000
% notes due 20 ...................................... --
---------- --------
Total debt........................................... 248,206
---------- --------
Partners' equity:
Limited partners....................................... 468,311 468,311
General partner........................................ 348,987 348,987
---------- --------
Total partners' equity............................... 817,298 817,298
---------- --------
Total capitalization................................. $1,065,504 $
========== ========
</TABLE>
S-14
<PAGE>
SELECTED FINANCIAL AND OTHER DATA
The following table sets forth selected financial and other data on a
consolidated basis for Cabot L.P. Our selected operating, balance sheet and
cash flow data as of December 31, 1998 and for the period then ended have been
derived from financial statements audited by Arthur Andersen LLP, independent
auditors.
Since Cabot L.P. was formed in October 1997 and did not begin operations until
February 4, 1998, the results for the year ended December 31, 1998 represent
activity for 331 days (approximately 11 months) and no comparisons with prior
periods are available.
<TABLE>
<CAPTION>
Year Ended
December 31, 1998
Operating Data -----------------
<S> <C>
(in thousands, except per unit data)
Total revenues .......................................... $ 102,425
Property taxes .......................................... $ 11,843
Property operating expenses ............................. $ 6,579
General and administrative expenses...................... $ 6,815
Depreciation and amortization ........................... $ 20,913
Interest expense ........................................ $ 7,009
Net income .............................................. $ 50,958
Basic and diluted earnings per unit ..................... $ 1.17
Basic weighted average units outstanding ................ 43,493
Diluted weighted average units outstanding .............. 43,587
<CAPTION>
December 31, 1998
Balance Sheet Data -----------------
<S> <C>
(in thousands)
Rental property, before accumulated depreciation ........ $1,072,675
Total assets ............................................ $1,110,570
Mortgage debt ........................................... $ 48,206
Line of credit borrowings ............................... $ 200,000
Total liabilities ....................................... $ 293,272
Partners' equity ........................................ $ 817,298
<CAPTION>
Year Ended
December 31, 1998
Other Data -----------------
<S> <C>
(in thousands, except number of properties and
percentage)
EBITDA(/1/) ............................................. $ 78,308
Funds from operations(/2/) .............................. $ 71,269
Cash flows provided by operating activities ............. $ 78,726
Cash flows used in investing activities ................. $ (398,795)
Cash flows provided by financing activities ............. $ 322,369
Total rentable square feet of properties at end of period
........................................................ 28,033
Number of properties at end of period ................... 206
Percentage leased at end of period ...................... 97.4%
</TABLE>
(footnotes on following page)
S-15
<PAGE>
(continued from previous page)
(1) EBITDA is computed as net income before gain on sale of properties plus
interest expense, income taxes, depreciation and amortization. Management
believes that in addition to cash flows and net income, EBITDA is a useful
financial performance measure for assessing the operating performance of an
equity REIT because, together with net income and cash flows, EBITDA provides
investors with an additional basis to evaluate the ability of a REIT to incur
and service debt and to fund acquisitions and other capital expenditures. To
evaluate EBITDA and the trends it depicts, the components of EBITDA, such as
revenues, property operating expenses, real estate taxes and general and
administrative expenses should be considered. Excluded from EBITDA are
financing costs such as interest, as well as depreciation and amortization,
each of which can significantly affect a REIT's results of operations and
liquidity and should be considered in evaluating a REIT's operating
performance. Further, EBITDA does not represent net income or cash flows from
operating, financing and investing activities as defined by generally accepted
accounting principles and does not necessarily indicate that cash flows will be
sufficient to fund cash needs. It should not be considered as an alternative to
net income as an indicator of a REIT's operating performance or to cash flows
as a measure of liquidity.
(2) Funds from Operations ("FFO") represents net income before minority
interest and extraordinary items, adjusted for depreciation on real property
and amortization of tenant improvements costs, lease commissions and gains from
the sale of properties. In addition to cash flow and net income, management
generally considers FFO to be a measure of the performance of an equity REIT
because, together with net income and cash flows, FFO provides investors with
an additional basis to evaluate the ability of a REIT to incur and service debt
and to fund acquisitions and other capital expenditures. However, FFO does not
measure whether cash flow is sufficient to fund all of an entity's cash needs,
including principal amortization, capital improvements and distributions to
shareholders. FFO also does not represent cash generated from operating,
investing or financing activities as determined in accordance with generally
accepted accounting principles. It should not be considered as an alternative
to net income as an indicator of a REIT's operating performance or to cash
flows as a measure of liquidity. Further, we calculate FFO in accordance with
the White Paper on Funds from Operations approved by the Board of Governors of
the National Association of Real Estate Investment Trusts, Inc. in March 1995.
FFO as disclosed by other REITs may not be comparable to our calculation.
S-16
<PAGE>
PROPERTY INFORMATION
For descriptive purposes, our properties may generally be grouped into three
broad categories: bulk distribution properties, multitenant distribution
properties and workspace properties.
Bulk distribution properties are oriented primarily to large national and
regional distribution tenants. These properties generally have at least 100,000
square feet of rentable space, building depths of at least 240 feet and clear
heights of 24 feet or more. They also generally have truck courts in excess of
100 feet in depth to accommodate larger modern trucks, a ratio of loading docks
to rentable space of one or more per 10,000 square feet and a location with
good access to interstate highways.
Multitenant distribution properties are oriented primarily to smaller regional
and local distribution tenants and are generally designed to be subdivided to
suit tenants whose space requirements generally range from 10,000 square feet
100,000 square feet. These properties generally have clear heights of 20 feet
or more, building depths of less than 240 feet unless configured with loading
docks on two sides and a location with good access to regional and interstate
highways.
Both bulk distribution and multitenant distribution properties are used
predominately for the storage and distribution of goods.
Workspace properties are designed to serve a variety of industrial tenants with
workspace-related requirements, including light manufacturing and assembly,
research, testing, re-packaging and sorting, back office, sales office and
office/warehouse functions. Workspace tenants include smaller companies and
local units of national or large regional companies whose space requirements
generally range from 3,000 square feet to 70,000 square feet. Workspace
properties generally have clear heights of 14 to 24 feet, attractive building
exteriors, office finish of up to 30% or more, parking ratios of one to four
spaces per 1,000 rentable square feet and locations with good access to
executive residential areas and local highways, labor supply and dining and
shopping amenities.
Our properties are typically leased on a triple net basis, meaning that our
tenants pay their share, based generally on square footage leased, of real
estate taxes and operating costs. If we are responsible for paying a stated
amount of real estate taxes and operating costs and tenants are responsible for
any and all increases in real estate taxes and operating costs above that
stated amount, we lease those properties at a higher gross rent. Excluding
lease renewal options, the lease terms for our properties typically range from
three to five years or, for leases that are renewed, a shorter period of
generally two to three years. Approximately 42% of our leases, based on
annualized net rent, contain a provision providing for an automatic "stepped
rent" increase of a specified amount or percentage at a specified point or
points during the term of the lease.
S-17
<PAGE>
Tenant Information
The following table lists our ten largest tenants, as measured by annualized
base rent as of December 31, 1998.
<TABLE>
<CAPTION>
Weighted
Average
Months
Total Remaining
Leased Annualized Percent of After
Square Base Annualized December 31,
Tenants(1) Feet(1) Rent(1)(2) Base Rent(1) 1998(1)
- ---------- --------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
GATX Logistics, Inc. ......... 1,296,872 $ 4,108,552 3.8% 33.0
Exel Logistics, Inc.
(Merchants Home Delivery).... 1,039,648 3,657,482 3.3 55.7
Forestville Industries
(guaranteed by North American
Philips Corporation)......... 480,258 2,618,591 2.4 31.0
B. Dalton Bookseller
(guaranteed by Barnes &
Noble, Inc.)................. 400,000 1,606,548 1.5 56.0
Goodtimes Home Video Corp..... 358,564 1,370,837 1.2 39.6
GTE Communications Corp....... 96,517 1,278,850 1.2 106.0
Enesco Corporation............ 234,000 1,088,100 1.0 4.9
Wal-Mart...................... 278,142 1,052,747 1.0 2.3
Hitachi Home Electronics...... 220,000 1,035,858 0.9 46.0
NIBCO, Inc. .................. 360,000 1,026,000 0.9 61.0
--------- ----------- ---- -----
TOTAL......................... 4,764,001 $18,843,565 17.2% 41.2
========= =========== ==== =====
</TABLE>
(1) Includes aggregations of all known affiliated entities based on available
information.
(2) Annualized base rent means contractual rent stated on an annualized basis.
S-18
<PAGE>
Lease Expirations
The following table summarizes the lease expirations at our properties for
leases in place as of December 31, 1998, assuming that none of our tenants
exercise renewal options or termination rights, if any, at or prior to the
scheduled expirations. The table does not include approximately 742,969
rentable square feet which was not leased as of that date.
<TABLE>
<CAPTION>
Expiring Leases
---------------------
Annualized Percent of
Annualized Base Rent Annualized
Number of Base Rent of of Expiring Base Rent of
Year of Leases Square Expiring Leases per Expiring
Lease Expiration Expiring Feet % of Total Leases(1) Square Foot(1) Leases(1)
---------------- --------- ---------- ---------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
1999.................... 83 4,279,488 15.7% $ 16,460,382 $3.85 15.0%
2000.................... 90 3,311,254 12.1 13,506,278 4.08 12.3
2001.................... 82 3,828,054 14.0 15,717,962 4.11 14.3
2002.................... 72 5,084,149 18.6 19,810,344 3.90 18.1
2003.................... 61 4,174,391 15.3 16,903,514 4.05 15.4
2004.................... 25 1,887,073 6.9 6,993,122 3.71 6.4
2005.................... 12 913,970 3.5 3,937,357 4.31 3.6
2006.................... 5 656,236 2.4 2,630,969 4.01 2.4
2007.................... 10 1,126,664 4.1 5,191,362 4.61 4.7
2008 and beyond......... 19 2,028,743 7.4 8,496,507 4.19 7.8
--- ---------- ----- ------------ ----- -----
TOTAL................... 459 27,290,022 100.0% $109,647,797 $4.02 100.0%
=== ========== ===== ============ ===== =====
</TABLE>
(1) Based on currently payable contractual rent.
S-19
<PAGE>
Properties by Type and Location
The following tables provide detailed information regarding the properties we
owned as of December 31, 1998, organized by property type and location.
<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(/1/)
---------------- ------------------------
Per
Year Leased
Property Type and Built/ Number of % % of Sq.
Location Renovated Properties Number Leased Amount Total Ft.
- ----------------- --------- ---------- ------ ------ --------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Bulk Distribution
Properties:
West Region
Los Angeles Market
South Vintage Avenue,
Building 1, Ontario,
CA 1986 1 272,448 100% $ 723,389 0.7% $ 2.66
South Vintage Avenue,
Building 2, Ontario,
CA 1986 1 248,064 32 263,850 0.3 3.30
South Rockefeller
Avenue, Ontario, CA 1986 1 164,140 100 551,510 0.5 3.36
East Jurupa Street,
Ontario, CA 1986 1 142,404 100 461,388 0.4 3.24
DeForest Circle, Mira
Loma, CA 1992 1 250,584 100 871,841 0.8 3.48
Vintage Avenue,
Ontario, CA 1988 1 284,559 100 973,200 0.9 3.42
San Fernando Road, Sun
Valley, CA 1980 1 181,670 100 925,792 0.9 5.10
Rowland Street, City of
Industry, CA 1998 1 181,635 30 241,578 0.2 4.38
Santa Anita Avenue,
Rancho Cucamonga, CA 1988 1 212,300 100 764,280 0.7 3.60
--- --------- --- --------------- -------- ------
Market Subtotal 9 1,937,804 85% $ 5,776,828 5.4% $ 3.52
San Diego Market
Dornoch Court, San
Diego, CA 1988 1 220,000 100% $ 1,035,858 1.0% $ 4.71
--- --------- --- --------------- -------- ------
Phoenix Market
North 47th Avenue,
Phoenix, AZ 1986 1 163,200 100% $ 453,867 0.4% $ 2.78
South 63rd Avenue,
Phoenix, AZ 1990 1 168,165 100 450,494 0.4 2.68
South 55th Avenue,
Phoenix, AZ 1986 1 100,000 100 300,000 0.3 3.00
South 41st Avenue,
Building 2, Phoenix,
AZ 1985 1 223,740 100 678,172 0.6 3.03
South 49th Avenue,
Phoenix, AZ 1989 1 114,871 100 330,828 0.3 2.88
North 104th Avenue,
Tolleson, AZ 1995 1 279,279 100 804,438 0.8 2.88
West Van Buren,
Tolleson, AZ 1997 1 278,142 100 931,670 0.9 3.35
South 84th Avenue,
Tolleson, AZ 1989 1 236,007 100 802,488 0.8 3.40
--- --------- --- --------------- -------- ------
Market Subtotal 8 1,563,404 100% $ 4,751,957 4.5% $ 3.04
--- --------- --- --------------- -------- ------
West Region Subtotal 18 3,721,208 92% $ 11,564,643 10.9% $ 3.37
Southwest Region
Dallas Market
Luna Road, Carrollton,
TX 1997 1 205,400 100% $ 679,992 0.6% $ 3.31
DFW Trade Center,
Building 1, Grapevine,
TX 1996 1 540,000 100 1,705,799 1.6 3.16
DFW Trade Center,
Building 2, Grapevine,
TX 1997 1 440,000 100 1,278,000 1.2 2.90
Airline Drive, Building
2, Coppell, TX 1990 1 140,800 100 492,804 0.5 3.50
--- --------- --- --------------- -------- ------
</TABLE>
S-20
<PAGE>
<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(/1/)
---------------- ------------------------
Per
Year Leased
Built/ Number of % % of Sq.
Property Type and Location Renovated Properties Number Leased Amount Total Ft.
- -------------------------- --------- ---------- ------ ------ --------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Southwest Region/Market Subtotal 4 1,326,200 100% $ 4,156,595 3.9% $ 3.13
Midwest Region
Chicago Market
West 73rd Street, Building 1, Bedford Park, IL 1982 1 233,282 100% $ 735,280 0.7% $ 3.15
West 73rd Street, Building 2, Bedford Park, IL 1986 1 380,269 100 1,034,331 1.0 2.72
West 73rd Street, Building 3, Bedford Park, IL 1979 1 232,000 100 727,667 0.7 3.14
Remington Street, Bolingbrook, IL 1996 1 212,333 100 796,925 0.7 3.75
Harvester Drive, Chicago, IL 1974 1 212,922 100 628,119 0.6 2.95
Arthur Avenue, Elk Grove, IL 1978 1 230,768 100 699,228 0.6 3.03
North Raddant Road, Batavia, IL 1991 1 170,462 100 711,954 0.7 4.18
Ambassador Road, Naperville, IL 1996 1 203,500 65 503,366 0.5 3.80
Mark Street, Wood Dale, IL 1985 1 234,000 100 833,392 0.8 3.56
--- --------- ---- --------------- -------- ------
Market Subtotal 9 2,109,536 97% $ 6,670,262 6.3% $ 3.27
Cincinnati/Northern Kentucky Market
Holton Drive, Independence, KY 1996 1 352,000 100% $ 991,951 0.9% $ 2.82
International Way, Hebron, KY 1990 1 192,000 100 556,800 0.5 2.90
Kingsley Drive, Building 1, Cincinnati, OH 1981 1 154,004 100 429,999 0.4 2.79
Kingsley Drive, Building 2, Cincinnati, OH 1981 1 249,402 100 710,000 0.7 2.85
International Road, Building 1, Cincinnati, OH 1990 1 192,000 100 528,000 0.5 2.75
International Road, Building 2, Cincinnati, OH 1990 1 204,800 100 721,520 0.7 3.52
--- --------- ---- --------------- -------- ------
Market Subtotal 6 1,344,206 100% $ 3,938,270 3.7% $ 2.93
Columbus Market
Westbelt Drive, Building 2, Columbus OH 1980 1 229,200 100% $ 640,552 0.6% $ 2.79
Equity Drive, Building 1, Columbus, OH 1980 1 227,480 79 412,186 0.4 2.29
--- --------- ---- --------------- -------- ------
Market Subtotal 2 456,680 89% $ 1,052,738 1.0% $ 2.57
Other Market
North State Road #9, Howe, IN 1988 1 346,515 100% $ 759,125 0.7% $ 2.19
--- --------- ---- --------------- -------- ------
Midwest Region Subtotal 18 4,256,937 97% $ 12,420,395 11.7% $ 3.00
Southeast Region
Memphis Market
Pilot Drive, Memphis, TN 1987 1 336,080 100% $ 795,326 0.7% $ 2.37
--- --------- ---- --------------- -------- ------
Orlando Market
Landstreet Road, Building 1, Orlando FL 1997 1 355,732 100% $ 1,639,782 1.5% $ 4.61
--- --------- ---- --------------- -------- ------
Charlotte Market
Reames Road, Charlotte, NC 1994 1 105,600 100% $ 327,095 0.3% $ 3.10
--- --------- ---- --------------- -------- ------
Atlanta Market
Highway 316, Dacula, GA 1989 1 326,019 100% $ 1,057,413 1.0% $ 3.24
Westgate Parkway, Fulton County, GA 1988 1 231,835 100 695,505 0.7 3.00
--- --------- ---- --------------- -------- ------
Market Subtotal 2 557,854 100% $ 1,752,918 1.7% $ 3.14
--- --------- ---- --------------- -------- ------
Southeast Region Subtotal 5 1,355,266 100% $ 4,515,121 4.2% $ 3.33
Northeast Region
Baltimore/Washington Market
Tar Bay Drive, Jessup, MD 1990 1 210,000 100% $ 800,527 0.8% $ 3.81
Oceano Avenue, Jessup, MD 1987 1 243,500 100 998,349 0.9 4.10
--- --------- ---- --------------- -------- ------
Market Subtotal 2 453,500 100% $ 1,798,876 1.7% $ 3.97
New York/New Jersey Market
Pepes Farm Road, Milford, CT 1980 1 200,000 100% $ 829,998 0.8% $ 4.15
South Middlesex Avenue, Building 1, Cranbury, NJ 1989 1 204,369 100 735,728 0.7 3.60
</TABLE>
S-21
<PAGE>
<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(/1/)
----------------- ------------------------
Per
Year Leased
Property Type and Built/ Number of % % of Sq.
Location Renovated Properties Number Leased Amount Total Ft.
- ----------------- --------- ---------- ---------- ------ --------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Birch Creek Road,
Bridgeport, NJ 1991/1997 1 203,229 100% 792,463 0.7% 3.90
Pierce Street, Franklin
Township, NJ 1984 1 182,764 100 776,748 0.7 4.25
Herrod Boulevard, South
Brunswick, NJ 1989 1 400,000 100 1,719,547 1.6 4.30
--- ---------- --- --------------- -------- ------
Market Subtotal 5 1,190,362 100% $ 4,854,484 4.5% $ 4.08
Harrisburg Market
Brackbill Boulevard,
Building 1,
Mechanicsburg, PA 1984 1 259,200 100% $ 912,384 0.8% $ 3.52
Brackbill Boulevard,
Building 2,
Mechanicsburg, PA 1994 1 235,200 100 827,904 0.8 3.52
Cumberland Parkway,
Mechanicsburg, PA 1992 1 340,000 100 1,144,967 1.1 3.37
--- ---------- --- --------------- -------- ------
Market Subtotal 3 834,400 100% $ 2,885,255 2.7% $ 3.46
--- ---------- --- --------------- -------- ------
Northeast Region
Subtotal 10 2,478,262 100% $ 9,538,615 8.9% $ 3.85
--- ---------- --- --------------- -------- ------
Bulk Distribution
Properties Total 55 13,137,873 97% $ 42,195,369 39.6% $ 3.32
Multitenant Distribution
Properties:
West Region
Los Angeles Market
West Rincon Street,
Corona, CA 1986 1 162,900 100% $ 729,600 0.7% $ 4.48
Jersey Court, Rancho
Cucamonga, CA 1989 1 88,134 100 291,000 0.3 3.30
12th Street, Chino, CA 1990 1 104,600 100 402,000 0.4 3.84
Industry Circle, La
Mirada, CA 1966 1 112,946 100 474,373 0.4 4.20
East Santa Ana Street,
Building 1, Ontario,
CA 1990 1 98,782 100 355,615 0.3 3.60
East Santa Ana Street,
Building 2, Ontario,
CA 1990 1 62,398 100 224,632 0.2 3.60
East Dyer Road, Santa
Ana, CA 1954/1965 1 372,096 100 1,363,619 1.4 3.66
--- ---------- --- --------------- -------- ------
Market Subtotal 7 1,001,856 100% $ 3,840,839 3.7% $ 3.83
San Francisco Market
Reed Avenue, Building
1, West Sacramento, CA 1988 1 103,110 100% $ 461,905 0.4% $ 4.48
Reed Avenue, Building
2, West Sacramento, CA 1988 1 105,600 100 423,336 0.4 4.01
--- ---------- --- --------------- -------- ------
Market Subtotal 2 208,710 100% $ 885,241 0.8% $ 4.24
Phoenix Market
South 40th Avenue,
Building 1, Phoenix,
AZ 1990 1 126,360 100% $ 338,093 0.3% $ 2.68
South 40th Avenue,
Building 3, Phoenix,
AZ 1987 1 201,600 100 622,944 0.6 3.09
South 41st Avenue,
Building 1, Phoenix,
AZ 1989 1 161,230 100 440,157 0.4 2.73
South 40th Avenue,
Building 2, Phoenix,
AZ 1989 1 127,042 100 384,872 0.4 3.03
South 39th Avenue,
Phoenix, AZ 1989 1 159,450 100 658,368 0.6 4.13
South 53rd Avenue,
Phoenix, AZ 1987 1 127,680 100 327,498 0.3 2.56
South 9th Street,
Phoenix, AZ 1983 1 89,423 100 436,218 0.4 4.88
44th Avenue, Phoenix,
AZ 1997 1 144,592 100 429,035 0.4 2.97
--- ---------- --- --------------- -------- ------
Market Subtotal 8 1,137,377 100% $ 3,637,185 3.4% $ 3.20
Seattle Market
Kent West Corporate
Park II, Kent, WA 1989 1 250,820 100% $ 966,492 0.9% $ 3.85
--- ---------- --- --------------- -------- ------
West Region Subtotal 18 2,598,763 100% $ 9,329,757 8.8% $ 3.59
Southwest Region
Dallas Market
113th Street,
Arlington, TX 1979 1 79,735 100% $ 291,032 0.3% $ 3.65
10th Street, Building
1, Plano, TX 1997 1 99,679 100 439,824 0.4 4.41
10th Street, Building
2, Plano, TX 1997 1 107,260 100 423,086 0.4 3.94
Airline Drive, Building
1, Coppell, TX 1991 1 75,000 100 262,500 0.2 3.50
North Lake Drive,
Coppell, TX 1982 1 230,400 100 632,376 0.6 2.74
--- ---------- --- --------------- -------- ------
Southwest Region/Market
Subtotal 5 592,074 100% $ 2,048,818 1.9% $ 3.46
Midwest Region
</TABLE>
S-22
<PAGE>
<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(/1/)
---------------- ------------------------
Per
Year Leased
Built/ Number of % % of Sq.
Property Type and Location Renovated Properties Number Leased Amount Total Ft.
- -------------------------- --------- ---------- ------ ------ ---------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Chicago Market
Medinah Road, Building 1, Chicago, IL 1986 1 319,459 100% $ 1,741,840 1.6% $ 5.45
Medinah Road, Building 2, Chicago, IL 1986 1 160,799 100 876,751 0.8 5.45
Swenson Avenue, St. Charles, IL 1988 1 81,110 100 299,751 0.3 3.70
High Grove Lane, Naperville, IL 1994 1 95,000 100 392,549 0.4 4.13
Western Avenue, Lisle, IL 1979/1985 1 67,996 100 383,143 0.4 5.63
--- --------- --- ---------------- -------- ------
Market Subtotal 5 724,364 100% $ 3,694,034 3.5% $ 5.10
Cincinnati/Northern Kentucky Market
Lake Forest Drive, Building 1, Blue Ash, OH 1978 1 239,891 100% $ 651,741 0.6% $ 2.72
Lake Forest Drive, Building 2, Blue Ash, OH 1979 1 176,956 95 433,055 0.4 2.60
--- --------- --- ---------------- -------- ------
Market Subtotal 2 416,847 98% $ 1,084,796 1.0% $ 2.67
Columbus Market
International Street, Columbus, OH 1988 1 152,800 100% $ 435,479 0.4% $ 2.85
Port Road, Building 1, Franklin County, OH 1995 1 205,109 100 677,903 0.6 3.31
Port Road, Building 2, Franklin County, OH 1995 1 156,000 100 425,899 0.4 2.73
Westbelt Drive, Building 1, Columbus, OH 1980 1 202,000 100 1,010,000 1.0 5.00
Dividend Drive, Columbus, OH 1979 1 144,850 100 443,241 0.4 3.06
Twin Creek Drive, Columbus, OH 1989 1 176,000 76 386,256 0.4 2.87
--- --------- --- ---------------- -------- ------
Market Subtotal 6 1,036,759 96% $ 3,378,778 3.2% $ 3.40
Minneapolis Market
Woodale Drive, Building 1, Mounds View, MN 1992 1 78,016 33% $ 124,533 0.1% $ 4.86
--- --------- --- ---------------- -------- ------
Other Market
Sysco Court, Grand Rapids, MI 1985 1 62,700 100% $ 366,795 0.3% $ 5.85
--- --------- --- ---------------- -------- ------
Midwest Region Subtotal 15 2,318,686 96% $ 8,648,936 8.1% $ 3.91
Southeast Region
Orlando Market
Orlando Central Park, Building 1, Orlando, FL 1988 1 267,432 100% $ 883,879 0.8% $ 3.31
Orlando Central Park, Building 2, Orlando, FL 1983 1 156,660 100 493,476 0.5 3.15
Orlando Central Park, Building 3, Orlando, FL 1991 1 356,583 90 1,401,377 1.3 4.36
Orlando Central Park, Building 4, Orlando, FL 1984 1 133,400 81 386,766 0.4 3.59
Orlando Central Park, Building 5, Orlando, FL 1985 1 139,800 100 492,042 0.5 3.52
Orlando Central Park, Building 6, Orlando, FL 1986 1 119,000 100 397,702 0.4 3.34
Exchange Drive, Orlando, FL 1979 1 115,728 100 320,888 0.3 2.77
Kingspointe Parkway, Orlando, FL 1991 1 101,870 49 197,496 0.2 3.95
--- --------- --- ---------------- -------- ------
Market Subtotal 8 1,390,473 92% $ 4,573,626 4.4% $ 3.58
Atlanta Market
Atlanta Industrial Drive, Atlanta, GA 1986 1 161,965 100% $ 408,679 0.4% $ 2.52
Westpark Drive, Building 1, Fulton County, GA 1981 1 216,074 100 539,189 0.5 2.50
Westpark Drive, Building 2, Fulton County, GA 1981 1 130,722 100 268,622 0.2 2.05
--- --------- --- ---------------- -------- ------
Market Subtotal 3 508,761 100% $ 1,216,490 1.1% $ 2.39
--- --------- --- ---------------- -------- ------
Southeast Region Subtotal 11 1,899,234 94% $ 5,790,116 5.5% $ 3.24
Northeast Region
Boston Market
First Avenue, Needham, MA 1961/1992 1 119,573 100% $ 693,065 0.7% $ 5.80
--- --------- --- ---------------- -------- ------
Baltimore/Washington Market
Port Capital Drive, Jessup, MD 1974 1 94,381 100% $ 458,338 0.4% $ 4.86
--- --------- --- ---------------- -------- ------
New York/New Jersey Market
South Middlesex Avenue, Building 2, Cranbury, NJ 1982 1 203,404 100% $ 661,062 0.6% $ 3.25
Colony Road, Building 1, Jersey City, NJ 1976 1 262,453 100 918,438 0.9 3.50
</TABLE>
S-23
<PAGE>
<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(/1/)
---------------- ------------------------
Per
Year Leased
Property Type and Built/ Number of % % of Sq.
Location Renovated Properties Number Leased Amount Total Ft.
- ----------------- --------- ---------- --------- ------ --------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Colony Road, Building
2, Jersey City, NJ 1974 1 124,933 100% 499,731 0.5% 4.00
Pulaski Boulevard, Port
Jersey, NJ 1974 1 224,664 100 703,139 0.6 3.13
Port Jersey Boulevard,
Building 1, Port
Jersey, NJ 1974/1982 1 425,121 100 1,711,836 1.6 4.03
Port Jersey Boulevard,
Building 2, Port
Jersey, NJ 1974/1982 1 204,564 100 754,841 0.7 3.69
Industrial Drive,
Building 1, Port
Jersey, NJ 1976 1 263,717 100 1,002,124 0.9 3.80
Industrial Drive,
Building 2, Port
Jersey, NJ 1976 1 154,000 100 615,996 0.6 4.00
Industrial Drive,
Building 3, Port
Jersey, NJ 1972 1 45,274 100 181,095 0.2 4.00
--- --------- --- --------------- -------- ------
Market Subtotal 9 1,908,130 100% $ 7,048,262 6.6% $ 3.69
Harrisburg Market
Ritter Road,
Mechanicsburg, PA 1986 1 37,800 100% $ 248,969 0.2% $ 6.59
--- --------- --- --------------- -------- ------
Northeast Region
Subtotal 12 2,159,884 100% $ 8,448,634 7.9% $ 3.91
--- --------- --- --------------- -------- ------
Multitenant
Distribution
Properties Total 61 9,568,641 98% $34,266,261 32.2% $ 3.66
Workspace Properties:
West Region
Los Angeles Market
East Howell Avenue,
Building 1, Anaheim,
CA 1968 1 81,475 100% $ 327,882 0.3% $ 4.02
East Howell Avenue,
Building 2, Anaheim,
CA 1991 1 25,962 100 109,040 0.1 4.20
Royal Avenue, Simi
Valley, CA 1988 1 26,120 100 157,442 0.2 6.03
Union Place, Building
1, Simi Valley, CA 1985 1 22,710 100 145,768 0.1 6.42
Union Place, Building
2, Simi Valley, CA 1987 1 36,538 100 324,360 0.3 8.88
Anza Drive, Building 1,
Valencia, CA 1990 1 10,296 100 65,121 0.1 6.32
Anza Drive, Building 2,
Valencia, CA 1990 1 7,944 100 57,192 0.1 7.20
Anza Drive, Building 3,
Valencia, CA 1990 1 8,663 100 62,400 0.1 7.20
Kovacs Lane, Huntington
Beach, CA 1988 1 125,000 100 1,000,800 0.9 8.01
Artesia Avenue,
Building 1, Fullerton,
CA 1991 1 55,498 100 233,548 0.2 4.21
Artesia Avenue,
Building 2, Fullerton,
CA 1991 1 60,502 100 283,149 0.2 4.68
Commonwealth Avenue,
Fullerton, CA 1965 1 64,292 100 250,047 0.2 3.89
--- --------- --- --------------- -------- ------
Market Subtotal 12 525,000 100% $ 3,016,749 2.8% $ 5.75
San Diego Market
Airway Road, Building
1, Otay Mesa, CA 1996 1 44,840 100% $ 285,489 0.3% $ 6.37
Airway Road, Building
2, Otay Mesa, CA 1996 1 78,296 100 449,738 0.4 5.74
Avenida Encinas,
Building 1, Carlsbad,
CA 1972 1 80,000 100 637,600 0.6 7.97
Avenida Encinas,
Building 2, Carlsbad,
CA 1993 1 126,008 100 716,846 0.7 5.69
--- --------- --- --------------- -------- ------
Market Subtotal 4 329,144 100% $ 2,089,673 2.0% $ 6.35
San Francisco Market
Brisbane Industrial
Park, Building 1,
Brisbane, CA 1961 1 39,800 100% $ 220,293 0.2% $ 5.54
Brisbane Industrial
Park, Building 2,
Brisbane, CA 1960 1 21,186 100 139,802 0.1 6.60
Brisbane Industrial
Park, Building 3,
Brisbane, CA 1969 1 23,586 100 172,058 0.2 7.29
Brisbane Industrial
Park, Building 4,
Brisbane, CA 1968 1 40,680 100 246,340 0.2 6.06
Brisbane Industrial
Park, Building 5,
Brisbane, CA 1966 1 37,040 100 214,612 0.2 5.79
Brisbane Industrial
Park, Building 6,
Brisbane, CA 1963 1 31,745 100 201,888 0.2 6.36
Brisbane Industrial
Park, Building 7,
Brisbane, CA 1967 1 32,211 100 169,670 0.2 5.27
Brisbane Industrial
Park, Building 8,
Brisbane, CA 1961 1 18,600 100 130,045 0.1 6.99
Brisbane Industrial
Park, Building 9,
Brisbane, CA 1966 1 43,500 100 284,354 0.3 6.54
Brisbane Industrial
Park, Building 10,
Brisbane, CA 1961 1 116,400 100 89,773 0.1 0.77
Brisbane Industrial
Park, Building 11,
Brisbane, CA 1968 1 35,744 100 214,464 0.2 6.00
Brisbane Industrial
Park, Building 12,
Brisbane, CA 1968 1 24,786 100 138,949 0.1 5.61
Brisbane Industrial
Park, Building 13,
Brisbane, CA 1962 1 58,000 100 307,703 0.3 5.31
Brisbane Industrial
Park, Building 14,
Brisbane, CA 1969 1 19,100 100 99,912 0.1 5.23
Huntwood Avenue,
Hayward, CA 1982 1 62,031 100 477,445 0.4 7.70
--- --------- --- --------------- -------- ------
Market Subtotal 15 604,409 100% $ 3,107,308 2.9% $ 5.14
</TABLE>
S-24
<PAGE>
<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(/1/)
---------------- ------------------------
Per
Year Leased
Built/ Number of % % of Sq.
Property Type and Location Renovated Properties Number Leased Amount Total Ft.
- -------------------------- --------- ---------- --------- ------ ---------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Phoenix Market
West Alameda Drive, Building 1, Tempe, AZ 1984 1 30,606 67% $ 93,041 0.1% $ 4.56
West Alameda Drive, Building 2, Tempe, AZ 1984 1 30,606 100 133,165 0.1 4.35
West Alameda Drive, Building 3, Tempe, AZ 1984 1 30,606 100 134,666 0.1 4.40
West Alameda Drive, Building 4, Tempe, AZ 1984 1 30,606 100 149,347 0.1 4.88
South Priest Drive, Tempe, AZ 1998 1 54,900 100 394,200 0.4 7.18
East Encanto Drive, Tempe, AZ 1990 1 81,817 100 329,950 0.3 4.03
--- --------- --- ---------------- -------- ------
Market Subtotal 6 259,141 96% $ 1,234,369 1.1% $ 4.96
Seattle Market
Kent West Corporate Park I, Building 1, Kent, WA 1989 1 41,700 100% $ 501,984 0.5% $12.04
Kent West Corporate Park I, Building 2, Kent, WA 1989 1 16,000 86 93,096 0.1 6.77
Kent West Corporate Park I, Building 3, Kent, WA 1989 1 36,250 50 77,064 0.1 4.24
Kent West Corporate Park I, Building 4, Kent, WA 1989 1 57,990 100 225,108 0.2 3.88
--- --------- --- ---------------- -------- ------
Market Subtotal 4 151,940 87% $ 897,252 0.9% $ 6.82
--- --------- --- ---------------- -------- ------
West Region Subtotal 41 1,869,634 98% $10,345,351 9.7% $ 5.63
Southwest Region
Dallas Market
DFW Trade Center, Building 3, Grapevine, TX 1997 1 202,361 100% $ 1,723,670 1.6% $ 8.52
Diplomat Drive, Building 1, Farmers Branch, TX 1997 1 53,375 100 325,044 0.3 6.09
--- --------- --- ---------------- -------- ------
Southwest Region/Market Subtotal 2 255,736 100% $ 2,048,714 1.9% $ 8.01
Midwest Region
Chicago Market
Feehanville Drive, Mount Prospect, IL 1987 1 57,150 100% $ 454,342 0.4% $ 7.95
Tower Lane, Bensenville, IL 1977 1 76,737 100 449,872 0.4 5.86
Business Center, Building 1, Mount Prospect, IL 1985 1 43,250 100 356,379 0.3 8.24
Business Center, Building 2, Mount Prospect, IL 1989 1 79,900 100 777,677 0.8 9.73
--- --------- --- ---------------- -------- ------
Market Subtotal 4 257,037 100% $ 2,038,270 1.9% $ 7.93
Cincinnati/Northern Kentucky Market
Empire Drive, Florence, KY 1991 1 101,250 100% $ 318,999 0.3% $ 3.15
Spiral Drive, Building 1, Florence, KY 1988 1 26,556 100 236,900 0.2 8.92
Spiral Drive, Building 2, Florence, KY 1989 1 34,999 87 231,972 0.2 7.64
Airport Exchange Drive, Erlanger, KY 1997 1 67,749 100 462,373 0.4 6.82
Creek Road, Blue Ash, OH 1983 1 66,095 95 469,341 0.5 7.49
--- --------- --- ---------------- -------- ------
Market Subtotal 5 296,649 97% $ 1,719,585 1.6% $ 5.96
Columbus Market
Equity Drive, Building 2, Columbus, OH 1980 1 116,160 61% $ 415,371 0.4% $ 5.83
--- --------- --- ---------------- -------- ------
Minneapolis Market
Woodale Drive, Building 2, Mounds View, MN 1989 1 55,742 100% $ 470,356 0.4% $ 8.44
Woodale Drive, Building 3, Mounds View, MN 1990 1 144,019 100 844,751 0.8 5.87
Woodale Drive, Building 4, Mounds View, MN 1992 1 42,551 100 208,107 0.2 4.89
--- --------- --- ---------------- -------- ------
Market Subtotal 3 242,312 100% $ 1,523,214 1.4% $ 6.29
--- --------- --- ---------------- -------- ------
Midwest Region Subtotal 13 912,158 94% $ 5,696,440 5.3% $ 6.63
Southeast Region
Charlotte Market
Airport Road, Monroe, NC 1957/1972 1 118,930 100% $ 591,600 0.5% $ 4.97
Old Charlotte Highway, Monroe, NC 1957/1972 1 135,000 100 394,400 0.4 2.92
--- --------- --- ---------------- -------- ------
Market Subtotal 2 253,930 100% $ 986,000 0.9% $ 3.88
</TABLE>
S-25
<PAGE>
<TABLE>
<CAPTION>
Rentable Sq. Ft. Annualized Net Rent(/1/)
----------------- ---------------------------
Per
Year Leased
Built/ Number of % % of Sq.
Property Type and Location Renovated Properties Number Leased Amount Total Ft.
- -------------------------- --------- ---------- ---------- ------ --------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Atlanta Market
Cobb International Place, Building
1, Atlanta, GA 1996 1 60,000 100% $ 260,820 0.3% $ 4.35
Cobb International Place, Building
2, Atlanta, GA 1996 1 68,000 100 242,617 0.2 3.57
Town Park Drive, Building 1,
Kennesaw, GA 1995 1 65,830 100 317,275 0.3 4.82
Town Park Drive, Building 2,
Kennesaw, GA 1995 1 55,554 100 250,632 0.2 4.51
South Royal Drive, Building 1,
Tucker, GA 1987 1 53,402 100 256,179 0.2 4.80
South Royal Drive, Building 2,
Tucker, GA 1987 1 43,720 100 179,019 0.2 4.09
South Royal Drive, Building 3,
Tucker, GA 1989 1 37,041 100 150,286 0.1 4.06
--- ---------- --- --------------- -------- ------
Market Subtotal 7 383,547 100% $ 1,656,828 1.5% $ 4.32
Orlando Market
Boggy Creek Road, Building 1,
Orlando, FL 1992 1 52,500 85% $ 217,349 0.2% $ 4.88
Boggy Creek Road, Building 2,
Orlando, FL 1996 1 55,456 100 311,543 0.3 5.62
Boggy Creek Road, Building 3,
Orlando, FL 1998 1 55,456 81 257,928 0.3 5.77
Landstreet Road, Building 2,
Orlando, FL 1997 1 55,456 100 311,812 0.3 5.62
Landstreet Road, Building 3,
Orlando, FL 1996 1 50,018 100 247,589 0.2 4.95
--- ---------- --- --------------- -------- ------
Market Subtotal 5 268,886 93% $ 1,346,221 1.3% $ 5.38
Other Markets
Industrial Drive South, Gluckstadt,
MS 1988 1 160,000 100% $ 690,000 0.7% $ 4.31
--- ---------- --- --------------- -------- ------
Southeast Region Subtotal 15 1,066,363 98% $ 4,679,049 4.4% $ 4.47
Northeast Region
Baltimore/Washington Market
The Crysen Center, Building 1,
Jessup, MD 1985 1 75,820 100% $ 371,997 0.3% $ 4.91
The Crysen Center, Building 2,
Jessup, MD 1985 1 76,043 100 357,158 0.3 4.70
West Nursery Road, Building 1,
Linthicum, MD 1989 1 49,100 100 343,700 0.3 7.00
West Nursery Road, Building 2,
Linthicum, MD 1989 1 39,041 100 380,720 0.4 9.75
Fontana Lane, Building 1,
Baltimore, MD 1988 1 47,434 100 251,103 0.2 5.29
Fontana Lane, Building 2,
Baltimore, MD 1988 1 61,320 84 340,263 0.4 6.58
Bristol Court, Jessup, MD 1988 1 73,071 100 379,683 0.4 5.20
Guilford Road, Annapolis Junction,
MD 1989 1 96,686 100 579,608 0.5 5.99
Nokes Boulevard, Sterling, VA 1998 1 88,489 100 726,576 0.7 8.21
Oakville Industrial Park, Building
1, Alexandria, VA 1949 1 67,225 100 400,179 0.4 5.95
Oakville Industrial Park, Building
2, Alexandria, VA 1940 1 23,683 100 114,883 0.1 4.85
Oakville Industrial Park, Building
3, Alexandria, VA 1947 1 76,089 100 517,389 0.5 6.80
Oakville Industrial Park, Building
4, Alexandria, VA 1952 1 2,800 100 18,624 0.0 6.65
Oakville Industrial Park, Building
5, Alexandria, VA 1955 1 56,134 98 216,197 0.2 3.92
Oakville Industrial Park, Building
6, Alexandria, VA 1946 1 50,876 100 502,253 0.5 9.87
--- ---------- --- --------------- -------- ------
Market Subtotal 15 883,811 99% $ 5,500,333 5.2% $ 6.30
Boston Market
Technology Drive, Auburn, MA 1973 1 54,400 100% $ 194,448 0.2% $ 3.57
John Hancock Road, Taunton, MA 1986 1 34,224 100 206,147 0.2 6.02
--- ---------- --- --------------- -------- ------
Market Subtotal 2 88,624 100% $ 400,595 0.4% $ 4.52
New York/New Jersey Market
New England Avenue, Piscataway, NJ 1975/1995 1 101,553 100% $ 404,861 0.4% $ 3.99
Memorial Drive, Franklin Township,
NJ 1988 1 148,598 100 996,704 0.9 6.71
--- ---------- --- --------------- -------- ------
Market Subtotal 2 250,151 100% $ 1,401,565 1.3% $ 5.60
--- ---------- --- --------------- -------- ------
Northeast Region Subtotal 19 1,222,586 99% $ 7,302,493 6.9% $ 6.02
--- ---------- --- --------------- -------- ------
Workspace Properties Total 90 5,326,477 98% $ 30,072,047 28.2% $ 5.77
--- ---------- --- --------------- -------- ------
Grand Total 206 28,032,991 97% $106,533,677 100.0% $ 3.90
=== ========== === =============== ======== ======
</TABLE>
S-26
<PAGE>
MANAGEMENT
The following table sets forth information with respect to the officers and
trustees of Cabot Trust, our sole general partner.
<TABLE>
<CAPTION>
Positions with Cabot Trust, Business
Name Age Experience and Other Positions
---- --- ------------------------------------
<C> <C> <S>
Ferdinand Colloredo-Mansfeld.. 59 Ferdinand Colloredo-Mansfeld has served as
Chairman of the Board of Trustees and Chief
Executive Officer of Cabot Trust since its
formation in October 1997. Mr. Colloredo-
Mansfeld also serves as the Chairman and
Chief Executive Officer of Cabot Advisors.
Mr. Colloredo-Mansfeld served as Chairman,
Chief Executive Officer and Chief
Investment Officer of Cabot Partners
Limited Partnership from 1990 to 1997,
having previously served in the same
positions with Cabot, Cabot & Forbes Realty
Advisors, Inc., an affiliate of Cabot,
Cabot & Forbes Company, since its formation
in 1986. Mr. Colloredo-Mansfeld began his
real estate career in 1970 when he joined
Cabot, Cabot & Forbes Company, a national
real estate development, management and
construction firm, becoming its Chief
Financial Officer in 1973, Chief Operating
Officer in 1974 and Chief Executive Officer
in 1976, a position he held until his
retirement from that company in 1989. As
Chief Executive Officer, Mr. Colloredo-
Mansfeld oversaw the development and
management of approximately $4 billion of
commercial properties in twenty states,
including 35 master planned suburban
business and industrial parks. Mr.
Colloredo-Mansfeld is a graduate of Harvard
College and Harvard Business School. He is
a limited partner in Brown Brothers
Harriman & Co. and is a Director of Data
General Corporation and Raytheon Company.
He is Chairman of the Board of Trustees of
Massachusetts General Hospital. Mr.
Colloredo-Mansfeld is the father of Franz
Colloredo-Mansfeld, the Chief Financial
Officer of Cabot Trust.
Robert E. Patterson........... 54 Mr. Patterson has served as President and a
Trustee of Cabot Trust since its formation
in October 1997. Mr. Patterson served as
Executive Vice President, Director of
Acquisitions and a member of the Investment
Committee of Cabot, Cabot & Forbes Realty
Advisors, Inc. and Cabot Partners Limited
Partnership from 1987 to 1997. Mr.
Patterson began his real estate career in
1972 as a lawyer with the firm of Gaston,
Snow & Ely Bartlett. In 1978, he became the
first Executive Director of the
Massachusetts Industrial Finance Agency and
remained in that position until 1983 when
he joined the Beal Companies, a Boston-
based real estate development, management
and investment firm as Senior Vice-
President. He joined Cabot, Cabot & Forbes
Realty Advisors, Inc. in 1987 to head its
acquisitions group and was a founding
partner of Cabot Partners Limited
Partnership upon its formation as an
independent entity in 1990. Mr. Patterson
is a graduate of Harvard College and
Harvard Law School. He is a Trustee of The
Putnam Group of Mutual Funds, a Trustee of
the Sea Education Association and Chairman
of the Board of Trustees of the Joslin
Diabetes Center. He is a member of numerous
industry associations, including the
National Association of Real Estate
Investment Trusts and the Urban Land
Institute.
</TABLE>
S-27
<PAGE>
<TABLE>
<CAPTION>
Positions with Cabot Trust, Business Experience
Name Age and Other Positions
---- --- -----------------------------------------------
<C> <C> <S>
George M. Lovejoy, Jr. .. 68 Mr. Lovejoy became a Trustee of Cabot Trust in
March 1999. Mr. Lovejoy has since 1994 been
President of Fifty Associates, a real estate
investment company of which he has been an
executive officer since 1966, and was a senior
executive officer from 1972 to 1993 of Meredith
& Grew, a real estate service company of which
he was President from 1978 to 1988 and Chairman
from 1988 to 1993. He is a Trustee of MGI
Properties, Chairman of the Investment Committee
of Copley Investors Limited Partnership and a
Director or Trustee of a number of funds in the
Scudder family of mutual funds. Mr. Lovejoy's
professional organization affiliations include
the Counselors of Real Estate, the Greater
Boston Building Owners & Managers Association
and the Greater Boston Real Estate Board, of
each of which organizations he is a past
President, the International Council of Shopping
Centers, the Massachusetts Association of
Realtors, the National Association of Realtors
and the Institute of Real Estate Management. He
is also a Trustee and a past President of the
New England Aquarium, a member of the
Corporation of Northeastern University, a member
and past Chairman of the Massachusetts Advisory
Committee of the Nature Conservancy.
Christopher C. Milliken.. 53 Mr. Milliken has been a Trustee of Cabot Trust
since February 1998. He has been President,
Chief Executive Officer and a Director of the
Boise Cascade Office Products Corporation since
April 1998, previously having served as Senior
Vice President, Operations from 1995 to April
1998 and Eastern Regional Manager from 1990 to
1995. Prior to beginning his career at Boise
Cascade Office Products Corporation in 1977,
Mr. Milliken served in various merchandise
management positions at Marshall Field & Company
from 1970 to 1977.
Maurice Segall........... 69 Mr. Segall has been a Trustee of Cabot Trust
since February 1998. Mr. Segall has been a
senior lecturer at the MIT-Sloan School of
Management and a senior advisor to the Boston
Consulting Group since 1989. Until 1989, he was
Chairman, President and Chief Executive
Corporate Officer of Zayre Corporation, which he
joined as President and Chief Executive Officer
in 1978. Mr. Segall is a Director of AMR
Corporation and Harcourt General, Inc. He is a
Trustee of Massachusetts General Hospital and
the Boston Museum of Fine Arts.
W. Nicholas Thorndike.... 65 Mr. Thorndike has served as a Trustee of Cabot
Trust since February 1998. Mr. Thorndike retired
in 1988 from Wellington Management
Company/Thorndike, Doran, Paine and Lewis where
he was Chairman of the Board and Managing
Partner. Mr. Thorndike serves as a Director of
Courier Corporation, Data General Corporation,
the Providence Journal (where he is Chairman of
the Executive Committee) and Bradley Real
Estate, Inc. He also serves as a Trustee of
Massachusetts General Hospital, having served as
its Chairman of the Board from 1987 to 1992 and
President from 1992 to 1994, and serves as a
Trustee of Eastern Utilities Associates,
Northeastern University and The Putnam Funds.
</TABLE>
S-28
<PAGE>
<TABLE>
<CAPTION>
Positions with Cabot Trust, Business Experience
Name Age and Other Positions
---- --- -----------------------------------------------
<C> <C> <S>
Ronald L. Skates.......... 57 Mr. Skates has been a Trustee of Cabot Trust
since February 1998. Mr. Skates has been
President, Chief Executive Officer and Director
of Data General Corporation since 1989. Prior
to joining Data General Corporation in 1986,
Mr. Skates was a Partner of Price Waterhouse
LLP, certified public accountants. He is a
member of the American Institute of Certified
Public Accountants and the Massachusetts
Society of Certified Public Accountants. He is
also a Trustee of Massachusetts General
Hospital and Vice Chairman and a Director of
the Massachusetts High Technology Council.
Franz Colloredo-Mansfeld.. 36 Franz Colloredo-Mansfeld has been Chief
Financial Officer of Cabot Trust since October
1997 and served as a Senior Vice President of
Cabot Partners since 1996. He was a Senior
Engagement Manager of McKinsey & Company, Inc.
from 1992 through 1996. He previously worked
for the Deutsche Bank real estate investment
group in 1992 and was a Robert Bosch Fellow at
the German Central Bank (Bundesbank) in
Frankfurt, Germany in 1991. He was also an
investment banker with Merrill Lynch & Co. from
1986 through 1989 where he specialized in
mergers and acquisitions. Mr. Colloredo-
Mansfeld is a graduate of Harvard College and
Harvard Business School. He is on the Board of
Advisors of Gilbane, Inc. and is a director or
trustee of numerous charitable organizations.
Mr. Colloredo-Mansfeld is the son of Ferdinand
Colloredo-Mansfeld, the Chief Executive Officer
of Cabot Trust.
Andrew D. Ebbott.......... 43 Mr. Ebbott has served as Senior Vice
President--Director of Acquisitions of Cabot
Trust since October 1997. Mr. Ebbott joined
Cabot, Cabot & Forbes Realty Advisors, Inc. in
1988 as Director of Research and a member of
its acquisition department, becoming a Vice-
President in 1991 and a Senior Vice President
in 1995 of Cabot Partners Limited Partnership.
Mr. Ebbott is a graduate of Dartmouth College
and the University of Chicago Business School.
He has over 13 years experience in real estate
finance, investment and research and is a
member of the American Institute of Certified
Public Accountants.
Howard B. Hodgson, Jr. ... 43 Mr. Hodgson has been a Senior Vice President--
Director of Real Estate Operations of Cabot
Trust since October 1997, and has served as a
Senior Vice President--Director of Asset
Management and Member of the Investment
Committee of Cabot Partners Limited Partnership
from 1992 to October 1997. Mr. Hodgson began
his real estate career in 1979 with the Boston-
based real estate firm of R.M. Bradley & Co.,
Inc., becoming the head of its institutional
property management group prior to joining
Cabot, Cabot & Forbes Asset Management Company
in 1991 as a Senior Vice President and head of
its property management group. Mr. Hodgson is a
graduate of Northeastern University. He is a
Trustee and member of the Executive Committee
of the Cambridge Savings Bank and is a Trustee
of Cambridge Financial Group, Inc. He is a
member of the Building Owners and Managers
Association and the National Association of
Industrial and Office Parks and is a corporate
Trustee of the Trustees of Reservations.
</TABLE>
S-29
<PAGE>
<TABLE>
<CAPTION>
Positions with Cabot Trust, Business Experience and
Name Age other Positions
---- --- ---------------------------------------------------
<C> <C> <S>
Neil E. Waisnor... 44 Mr. Waisnor has served as Senior Vice President--
Finance, Treasurer and Secretary of Cabot Trust since
October 1997. Mr. Waisnor was a founding partner of
Cabot Partners Limited Partnership, joining as a Vice
President and Treasurer in 1990 and becoming a Senior
Vice President and Chief Financial Officer in 1995.
Prior to joining Cabot Partners Limited Partnership, he
was Vice President and Controller of Cabot, Cabot &
Forbes Company, where he served in a variety of
financial capacities since 1985. He worked for Arthur
Andersen & Co. from 1977 until 1985 where he was a
senior audit manager serving real estate and high
technology companies. Mr. Waisnor is a graduate of the
University of Massachusetts at Amherst and is a member
of the American Institute of Certified Public
Accountants and the Massachusetts Society of Certified
Public Accountants and has served on the Accounting
Committee of the National Council of Real Estate
Investment Fiduciaries.
Eugene F. Reilly.. 38 Mr. Reilly has been Senior Vice President--Director of
Development of Cabot Trust since October 1997. Mr.
Reilly served as Director of Leasing and Marketing of
Cabot Partners Limited Partnership from 1992 to October
1997, becoming Senior Vice President in 1996. Mr.
Reilly began his real estate career with the Boston
commercial real estate brokerage firm of Leggat McCall
and Werner in 1983 and subsequently became a leasing
broker with Julien J. Studley, Inc. In 1985, he joined
National Development Corporation where he became a
Senior Vice President prior to joining Cabot Partners
Limited Partnership as a Vice President in 1992. Mr.
Reilly is a graduate of Harvard College. He is a member
of the National Association of Industrial and Office
Parks, the Industrial Development Research Council and
the Council of Logistics Managers.
</TABLE>
S-30
<PAGE>
DESCRIPTION OF THE NOTES
The following description of the material terms of the notes offered hereby
supplements the description of the general terms and provisions of the debt
securities set forth in the accompanying prospectus under the caption
"Description of Debt Securities." In this description, the words "we," "our,"
"ours" and "us" refer only to Cabot L.P. and not to any of its Subsidiaries.
We will issue the notes under the indenture dated as of , 1999, as
supplemented, between us and The Bank of New York, as trustee.
The following description is a summary of the provisions of the indenture
relating to the notes. It does not restate the indenture in its entirety. We
urge you to read the indenture, because it, and not this description, will
define your rights as a holder of the notes. We have filed a copy of the
indenture as an exhibit to the registration statement which includes the
accompanying prospectus, copies of which are available for inspection at our
offices.
Brief Description of the Notes
The notes:
. will be our direct, senior unsecured obligations and will not be
obligations of or guaranteed by Cabot Trust;
. will rank equally with our other unsecured and unsubordinated
indebtedness;
. will be effectively subordinated to our mortgage indebtedness, to our
other secured indebtedness and to the indebtedness and other liabilities
of our subsidiaries; and
. will be issued in denominations of $1,000 and integral multiples of
$1,000.
As of December 31, 1998, we had approximately $238.9 million of indebtedness,
of which approximately $38.9 million was indebtedness secured by mortgages on
our properties. At that date, our subsidiaries had approximately $9.3 million
of indebtedness, all of which was secured by mortgages on their properties. In
February 1999, we borrowed $87.6 million, secured by specified properties, and
used the proceeds of this borrowing to repay a portion of the balance
outstanding under our acquisition facility.
Except as described below under the heading "Covenants--Limitations on
Incurrence of Indebtedness" or in the accompanying prospectus under the heading
"Description of Debt Securities--Merger, Consolidation or Sale," the indenture
does not contain any provisions that would limit our ability to incur
indebtedness or that would protect you in the event of:
. a highly leveraged or similar transaction involving us or any of our
affiliates;
. a change of control; or
. a reorganization, restructuring, merger or similar transaction involving
us or Cabot Trust that may adversely affect you.
We do not presently intend to engage in a transaction which would result in a
change of control. In addition, there are restrictions on the ownership and
transfer of Cabot Trust's common shares that are intended to protect its status
as a real estate investment trust for federal income tax purposes but may also
act to prevent or hinder a change of control of Cabot Trust. These
restrictions, as well as Cabot Trust's shareholder rights plan and other
provisions that may prevent or hinder attempts to acquire
S-31
<PAGE>
control of Cabot Trust that are not approved by its Board of Trustees, are
described in the accompanying prospectus under the headings "Description of
Common Shares--Restrictions on Transfer" and "Description of Common Shares--
Shareholder Rights Plan."
Principal, Maturity and Interest
We will issue the notes in an aggregate principal amount of $ million.
The notes will mature on , 200 , unless earlier redeemed.
Interest on the notes will accrue at the rate of % per year and will be
payable semiannually in arrears on and , commencing on , 1999. We
will make each interest payment to the holders of the notes of record on the
immediately preceding and .
Interest on the notes will accrue from the date of original issuance or, if
interest has already been paid, from the date to which interest on the notes
was most recently paid. Interest will be computed on the basis of a 360-day
year comprised of twelve 30-day months.
If any interest payment date, maturity date or redemption date falls on a day
that is not a business day, the payment will be made on the next business day
and that payment will not include interest for the period from and after that
interest payment date, maturity date or redemption date. A business day is any
day, other than a Saturday or Sunday, that is neither a legal holiday nor a day
on which banks in New York City or in Boston are authorized or required to
close.
We will make all payments on the notes in New York City at the office or agency
of The Bank of New York, which will act as our paying agent and whose office is
located at . Alternatively, we may, at our option, pay interest on a note
by check mailed to the address of the person entitled thereto or by a wire
transfer of funds to that person at an account maintained within the United
States.
Optional Redemption
The notes will be redeemable, in whole or in part, at our option at any time at
a redemption price equal to the greater of (a) 100% of the principal amount of
the notes to be redeemed plus the interest accrued thereon to the redemption
date, and (b) an amount equal to the sum of the present values of the remaining
scheduled payments of principal and interest on the notes to be redeemed, not
including any portion of such payments of interest accrued as of the redemption
date, discounted to the redemption date on a semi-annual basis, assuming a 360-
day year consisting of twelve 30-day months, at the Adjusted Treasury Rate plus
basis points plus, the interest accrued on the notes to be redeemed to the
redemption date.
The "Adjusted Treasury Rate," with respect to any redemption date, is the rate
per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue,
expressed as a percentage of its principal amount, equal to the Comparable
Treasury Price for such redemption date.
For purposes of determining the Adjusted Treasury Rate, the following terms
have the meanings summarized below:
"Comparable Treasury Issue" means the United States Treasury security having a
maturity comparable to the remaining term of the notes that are to be redeemed
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of the notes that are
to be redeemed.
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<PAGE>
"Comparable Treasury Price" means, with respect to any redemption date, (a) the
average of the Reference Treasury Dealer Quotations of the bid and asked prices
for the Comparable Treasury Issue for that redemption date, after excluding the
highest and lowest Reference Treasury Dealer Quotations obtained, or (b) if the
trustee obtains fewer than three Reference Treasury Dealer Quotations, the
average of the quotations obtained. The entities that will be consulted to
obtain the Reference Treasury Dealer Quotations will be primary dealers in the
United States government securities markets located in New York City who will
be selected by us and who may include J.P. Morgan Securities Inc. and .
We will give notice of any optional redemption at least 30 but not more than 60
days before the redemption date. The notice of redemption will specify, among
other things, the redemption price and the principal amount of the notes held
by a noteholder that will be redeemed.
If we redeem less than all of the notes, we will notify the trustee at least 45
days before our intended redemption date, or a shorter period that is
satisfactory to the trustee, of the aggregate principal amount of the notes to
be redeemed and their redemption date. In that event, the trustee will select
the notes to be redeemed in a manner it deems fair and appropriate. We will not
redeem notes in less than $1,000 increments.
Covenants
The following paragraphs summarize the covenants to which we will agree in
connection with the issuance of the notes. The definitions of important terms
used in these covenants are provided below under the subheading "Definitions."
These definitions should be read for further information regarding the intended
operation and effect of the covenants. Additional general covenants applicable
to the notes and other debt securities we may issue are described in the
prospectus under the heading "Description of Debt Securities--Covenants."
Limitations on Incurrence of Indebtedness.
Aggregate Debt Test. We will not, and will not permit any of our Subsidiaries
to, incur any Indebtedness, other than Intercompany Indebtedness, if,
immediately after giving effect to the incurrence of such additional
Indebtedness and the application of the proceeds thereof, the aggregate
principal amount of all of our outstanding Indebtedness and that of our
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles is greater than the 60% of the sum of, without
duplication:
(1) our Total Assets and those of our Subsidiaries as of the end of the period
covered in our Annual Report on Form 10-K or Quarterly Report on Form 10-Q,
as the case may be, most recently filed with the Securities and Exchange
Commission (or, if such filing is not permitted under the Securities
Exchange Act, then with the trustee, or if we have not yet filed our first
quarterly report on Form 10-Q, then as of December 31, 1998) prior to the
incurrence of the proposed additional Indebtedness; and
(2) the purchase price of any real estate assets or mortgage loans receivable
acquired by us or any of our Subsidiaries, and the amount of any securities
offering proceeds received that were not used to acquire real estate assets
or mortgage loans receivable or used to reduce indebtedness, in each case
since the end of the period, including the proceeds to be obtained from the
incurrence of the proposed additional Indebtedness.
S-33
<PAGE>
Secured Debt Test. In addition to the preceding limitation on the incurrence of
Indebtedness, we will not, and will not permit any of our Subsidiaries to,
incur any Indebtedness secured by any mortgage, lien or security interest on or
in any of our property or any of our Subsidiaries' property, whether owned at
the date of the indenture or thereafter acquired, if, immediately after giving
effect to the incurrence of the proposed additional Indebtedness and the
application of the proceeds thereof, the aggregate principal amount of all of
our outstanding Indebtedness and that of our Subsidiaries on a consolidated
basis which is secured by any mortgage, lien or security interest on or in our
property or any of our Subsidiaries' property is greater than 40% of the sum
of, without duplication:
(1) our Total Assets and those of our Subsidiaries as of the end of the period
covered in our Annual Report on Form 10-K or Quarterly Report on Form 10-Q,
as the case may be, most recently filed with the Securities Exchange
Commission (or, if such filing is not permitted under the Exchange Act,
then with the trustee, or if we have not yet filed our first quarterly
report or Form 10-Q, then as of December 31, 1998) prior to the incurrence
of the proposed additional Indebtedness; and
(2) the purchase price of any real estate assets or mortgage loans receivable
acquired, and the amount of any securities offering proceeds received that
were not used to acquire real estate assets or mortgage loans receivable or
used to reduce Indebtedness, in each case by us or any of our Subsidiaries
since the end of the calendar quarter, including the proceeds to be
obtained in connection with the incurrence of the proposed additional
Indebtedness.
Annual Debt Service Test. In addition to the preceding limitations on the
incurrence of Indebtedness, we will not, and will not permit any of our
Subsidiaries to, incur any Indebtedness if the ratio of Consolidated Income
Available for Debt Service to the Annual Debt Service Charge for the four
consecutive fiscal quarters most recently ended prior to the date on which the
proposed additional Indebtedness is to be incurred was less than 1.5:1 on a pro
forma basis after giving effect to the proposed additional Indebtedness and to
the application of the proceeds of that Indebtedness, and calculated on the
assumption that:
(1) the proposed Indebtedness and any other Indebtedness incurred by us and our
Subsidiaries since the first day of the four-quarter period and the
application of the proceeds therefrom, including to refinance other
Indebtedness, had occurred at the beginning of the period;
(2) the repayment or retirement of any other Indebtedness by us and our
Subsidiaries since the first day of the four-quarter period had been repaid
or retired at the beginning of the period, except that, in making this
computation, the amount of Indebtedness under any revolving credit facility
will be computed based upon the average daily balance of that Indebtedness
during the period;
(3) in the case of Acquired Indebtedness or Indebtedness incurred in connection
with any acquisition since the first day of the four-quarter period, the
related acquisition had occurred as of the first day of the period with the
appropriate adjustments with respect to the acquisition being included in
the pro forma calculation; and
(4) in the case of any acquisition or disposition by us or our Subsidiaries of
any asset or group of assets since the first day of the four-quarter
period, whether by merger, stock purchase or sale, or asset purchase or
sale, the acquisition or disposition or any related repayment of
Indebtedness had occurred as of the first day of the period with the
appropriate adjustments with respect to the acquisition or disposition
being included in the pro forma calculation.
Required Maintenance of Total Unencumbered Assets. We and our Subsidiaries will
at all times maintain Total Unencumbered Assets of not less than 150% of the
aggregate outstanding principal amount of our Unsecured Indebtedness and that
of our Subsidiaries on a consolidated basis.
S-34
<PAGE>
Provision of Financial Information.
So long as any notes are outstanding and whether or not required by the
Securities and Exchange Commission, we will furnish to the trustee within 15
days of the time periods specified in the SEC's rules and regulations:
(1) all quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if we were
required to file those forms, including a "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and, with
respect to annual information only, a report on our annual financial
statements by our certified independent accountants; and
(2) all current reports that would be required to be filed with the SEC on Form
8-K if we were required to file such reports.
If we are not subject to Sections 13 and 15(d) of the Exchange Act, we will
furnish to the holders of the notes, without cost to the holders, a copy of the
information and reports referred to in clauses (1) and (2) above within 15 days
after the filing dates therefor specified in the SEC's rules and regulations.
In addition, whether or not required by the SEC, we will file a copy of the
information and reports referred to in clauses (1) and (2) above with the SEC
for public availability within the time periods specified in the SEC's rules
and regulations, unless the SEC will not accept such a filing, in which case we
will supply copies of the documents upon written request and payment of the
reasonable cost of duplication and delivery by any holder or prospective holder
of the notes.
Waiver of Covenants.
We may omit to comply with any term, provision or condition of the covenants
described above, and with any other term, provision or condition with respect
to the notes, except any such term, provision or condition which could not be
amended without the consent of all holders of notes, if before or after the
time for compliance the holders of at least a majority in principal amount of
all the outstanding notes, by act of such holders, either waive compliance in
the particular instance or waive compliance generally. Except to the extent
expressly waived, and until the waiver becomes effective, our obligations and
the duties of the trustee in respect of any term, provision or condition of the
indenture and the notes will remain in full force and effect.
Definitions.
The definitions of important terms used in this prospectus supplement and the
indenture are summarized below.
"Acquired Indebtedness" means Indebtedness of a person (1) existing at the time
the person becomes a Subsidiary of ours or (2) assumed in connection with the
acquisition of assets from the person, in each case, other than Indebtedness
incurred in connection with, or in contemplation of, the person becoming a
Subsidiary of ours or such acquisition. Acquired Indebtedness will be deemed to
be incurred on the date of the related acquisition of assets from any person or
the date the acquired person becomes a Subsidiary of ours.
S-35
<PAGE>
"Annual Debt Service Charge" for any period means the aggregate interest
expense for the period in respect of, and the amortization during the period of
any original issue discount of, our Indebtedness and that of our Subsidiaries
and the amount of dividends which are payable during the period in respect of
Disqualified Stock.
"Consolidated Income Available for Debt Service" for any period means our
Earnings from Operations and that of our Subsidiaries plus amounts which have
been deducted, and minus amounts which have been added, for the following,
without duplication:
(1) interest on our Indebtedness and that of our Subsidiaries;
(2) provision for our taxes and those of our Subsidiaries based on income;
(3) amortization of debt discount and deferred financing costs;
(4) provisions for gains and losses on properties and depreciation and
amortization;
(5) increases in deferred taxes and other non-cash investments;
(6) the effect of any non-cash charge resulting from a change in accounting
principles in determining Earnings from Operations for the period; and
(7) amortization of deferred charges.
"Disqualified Stock" means, with respect to any person, any capital stock
(including all types of ownership interests in an entity and warrants and
options to purchase the same) of such person which by the terms of such capital
stock, or by the terms of any security into which it is convertible or for
which it is exchangeable or exercisable, upon the happening of any event or
otherwise,
(1) matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, other than capital stock which is redeemable
solely in exchange for capital stock which is not Disqualified Stock or
the maturity price or redemption price of which may, at the option of
the person, be paid in capital stock which is not Disqualified Stock;
(2) is convertible into or exchangeable or exercisable for Indebtedness or
Disqualified Stock; or
(3) is redeemable at the option of the holder thereof, in whole or in part,
other than capital stock which is redeemable solely in exchange for
capital stock which is not Disqualified Stock or the redemption price
of which may, at the option of the person, be paid in capital stock
which is not Disqualified Stock, in each case on or prior to the stated
maturity of the notes.
"Earnings from Operations" for any period means net income excluding the net
amount of any:
(1) provisions for gains and losses on sales of investments;
(2) extraordinary and non-recurring items; and
(3) property valuation losses;
in each case, as reflected in our consolidated financial statements and those
of our Subsidiaries for the period, as determined on a consolidated basis in
accordance with generally accepted accounting principles.
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<PAGE>
"Indebtedness" means any of our indebtedness or that of any Subsidiary of ours,
whether or not contingent, in respect of:
(1) borrowed money or that is evidenced by bonds, notes, debentures or
similar instruments, whether or not such indebtedness is secured by any
mortgage, lien or security interest existing on or in property owned by
us or any Subsidiary of ours;
(2) indebtedness for borrowed money of a person other than us or a
Subsidiary of ours which is secured by any mortgage, lien or security
interest existing on or in property owned by us or any Subsidiary of
ours, to the extent of the lesser of,
(a) the amount of indebtedness so secured, and
(b) the fair market value of the property subject to such mortgage,
lien or security interest;
(3) the reimbursement obligations, contingent or otherwise, in connection
with any letters of credit actually issued or amounts representing the
balance deferred and unpaid of the purchase price of any property or
services, except any balance that constitutes an accrued expense or
trade payable, all conditional sale obligations and all obligations
under any title retention agreement;
(4) the principal amount of all of our and our Subsidiaries' obligations
with respect to the redemption, repayment or other repurchase of any
Disqualified Stock; or
(5) any lease of property by us or any Subsidiary of ours as lessee which
is reflected on our consolidated balance sheet as a capitalized lease
in accordance with generally accepted accounting principles.
Indebtedness also includes, to the extent not otherwise included, any
undertaking by us or any Subsidiary of ours to be liable for, or to pay, as
obligor, guarantor or otherwise, other than for purposes of collection in the
ordinary course of business, any Indebtedness of another person, other than us
or any Subsidiary of ours. Indebtedness will be deemed to be incurred by us or
any Subsidiary of ours whenever we or the Subsidiary create, assume, guarantee
or otherwise become liable in respect thereof. Indebtedness of a Subsidiary of
ours existing prior to the time it became a Subsidiary will be deemed to be
incurred upon the Subsidiary's becoming a Subsidiary of ours. Indebtedness of a
person existing prior to a merger or consolidation of that person with us or
any Subsidiary of ours in which the person is the successor to us or our
Subsidiary will be deemed to be incurred upon the completion of the merger or
consolidation. However, Indebtedness shall not include any indebtedness that
has been the subject of an "in substance" defeasance and is therefore no longer
considered indebtedness in accordance with generally accepted accounting
principles.
"Intercompany Indebtedness" means indebtedness to which the only parties are
us, Cabot Trust and any Subsidiary of ours, but only so long as that
indebtedness is held solely by any of us, Cabot Trust and any Subsidiary of
ours, and is subordinate in right of payment to the notes.
"Subsidiary" means, with respect to any person, any corporation or other entity
of which a majority of the voting power of the voting equity securities or the
outstanding equity interests are owned, directly or indirectly, by the person.
For the purposes of this definition, "voting equity securities" means equity
securities having voting power for the election of directors, whether at all
times or only so long as no senior class of security has that voting power by
reason of any contingency.
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<PAGE>
"Total Assets" as of any date means the sum of:
(1) the Undepreciated Real Estate Assets; and
(2) all of our other assets and those of our Subsidiaries, determined in
accordance with generally accepted accounting principles, but excluding
accounts receivable and intangibles, except that the term "Total
Assets" does not include any assets which have been deposited in trust
in connection with an "in substance" defeasance in accordance with
generally acceptable accounting principles.
"Total Unencumbered Assets" means the sum of:
(1) those Undepreciated Real Estate Assets that are not subject to any
mortgage, lien or security interest given as security for borrowed
money; and
(2) all of our other assets and those of our Subsidiaries that are not
subject to any mortgage, lien or security interest for borrowed money,
as determined in accordance with generally accepted accounting
principles, but excluding accounts receivable and intangibles, except
that the term "Total Unencumbered Assets" does not include any assets
which have been deposited in trust in connection with an "in substance"
defeasance in accordance with generally acceptable accounting
principles.
"Undepreciated Real Estate Assets" as of any date means the historical cost
plus the cost of capital improvements of our real estate assets and those of
our Subsidiaries on that date, before depreciation and amortization, determined
on a consolidated basis in accordance with generally accepted accounting
principles.
"Unsecured Indebtedness" means Indebtedness that is not secured by any
mortgage, lien or security interest upon any of our properties or those of any
of our Subsidiaries.
Events of Default
The events of default under the indenture and the remedies therefor, which
include the right to declare the principal amount of the notes to be
immediately due and payable, are described in the accompanying prospectus under
the heading "Description of Debt Securities--Events of Default." If the
maturity of the notes is so accelerated the note holders will be entitled to
receive an amount equal to the redemption price described herein under the
heading "Optional Redemption," determined as if a redemption had occurred on
the same date as the event of default.
Discharge, Defeasance and Covenant Defeasance
The provisions of the indenture relating to defeasance and covenant defeasance
will apply to the notes. These provisions are described in the accompanying
prospectus under the heading "Description of Debt Securities--Discharge,
Defeasance and Covenant Defeasance". Each of the covenants described in this
prospectus supplement under the heading "Covenants" and under the heading
"Description of Debt Securities--Covenants" in the accompanying prospectus will
be subject to covenant defeasance.
Book-Entry System
The Depository Trust Company will act as securities depository for the notes.
The notes will be issued as fully registered securities that are registered in
the name of Cede & Co., which is the
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<PAGE>
nominee of DTC, and will be deposited with DTC. The provisions described under
the heading "Description of Debt Securities--Book-Entry Securities" in the
accompanying prospectus will apply to the notes.
DTC has provided the following information to us: 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
United States 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 deposit with DTC. DTC also records the
settlement among its participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in its participants' accounts. This eliminates the need to exchange
certificates. Direct participants of DTC include securities brokers and dealers
(including the underwriters), 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, the American Stock Exchange, Inc. and the National Association of
Securities Dealers, Inc. DTC's book-entry system is also used by other
organizations such as securities brokers and dealers, banks and trust companies
that work through a direct participant. The rules that apply to DTC and its
participants are on file with the SEC.
DTC management is aware that some computer applications, systems and the like
for processing data that are dependent upon calendar dates, including dates
before, on and after January 1, 2000, may encounter "Year 2000 problems." DTC
has informed its participants and other members of the financial community that
it has developed and is implementing a program so that its systems, as the same
relate to the timely payment of distributions, including principal and interest
payments, to securityholders, book-entry deliveries and settlement of trades
within DTC continue to function appropriately. This program includes a
technical assessment and a remediation plan, each of which is complete.
Additionally, DTC's plan includes a testing phase, which is expected to be
completed within appropriate time frames.
DTC's ability to perform properly its services is also dependent upon other
parties, including but not limited to issuers and their agents, as well as
DTC's direct and indirect participants and third-party vendors, from whom DTC
licenses software and hardware, and third-party vendors on whom DTC relies for
information or the provision of services, including telecommunication and
electrical utility service providers, among others. DTC has informed its
participants and other members of the financial community that it is
contacting, and will continue to contact, third-party vendors from whom DTC
acquires services to impress upon them the importance of such services being
Year 2000 compliant and to determine the extent of their efforts for Year 2000
remediation and, as appropriate, testing of their services. In addition, DTC is
in the process of developing such contingency plans as it deems appropriate.
According to DTC, the foregoing information with respect to DTC has been
provided to its participants and those other members for informational purposes
only and is not intended to serve as a representation, warranty or contract
modification of any kind.
S-39
<PAGE>
Governing Law
The indenture will be governed by, and shall be construed in accordance with,
the laws of the State of New York.
No Personal Liability
No past, present or future partner, stockholder, employee, officer or director
of ours or any successor of us shall have any liability for any of our
obligations, covenants or agreements contained under the notes or the
indenture. By accepting the notes, you waive and release all liabilities
described in the preceding sentence. This waiver and release is part of the
consideration for the issuance of the notes.
S-40
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the underwriting agreement
dated the date hereof, we have agreed to sell to each of the underwriters named
below, severally, and each of the underwriters has severally agreed to
purchase, the principal amount of the notes set forth opposite its name below:
<TABLE>
<CAPTION>
Principal
Amount of
Underwriters Notes
------------ ---------
<S> <C>
J.P. Morgan Securities Inc. ....................................... $
-------
Total............................................................ $
=======
</TABLE>
If the underwriters take any of the notes, then they are obligated to take and
pay for all of the notes.
The underwriters initially propose to offer part of the notes directly to the
public at the offering price set forth on the cover page and part to selected
dealers at a price that represents a concession not in excess of % of the
principal amount of the notes. Any underwriter may allow, and any dealer may
reallow, a concession not in excess of % of the principal amount of the notes
to some other dealers. After the initial offering of the notes, the
underwriters may from time to time vary the offering price and other selling
terms.
We intend to list the notes on the New York Stock Exchange. Currently, there is
no public market for the notes.
We have agreed to indemnify the underwriters against various liabilities,
including liabilities under the Securities Act, or to contribute to payments
which the underwriters may be required to make in respect of any of those
liabilities.
In connection with the offering of the notes, the underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
notes. Specifically, the underwriters may overallot in connection with the
offering of the notes, creating a syndicate short position. In addition, the
underwriters may bid for, and purchase, notes in the open market to cover
syndicate short positions or to stabilize the price of the notes. The
underwriting syndicate may reclaim selling concessions allowed for distributing
the notes in the offering of the notes, if the syndicate repurchases previously
distributed notes in syndicate covering transactions, stabilization
transactions or otherwise. Any of these activities may stabilize or maintain
the market price of the notes above independent market levels. The underwriters
are not required to engage in any of these activities and may end any of them
at any time.
We estimate that the expenses associated with this offering that will be paid
by us will be approximately $ .
In the ordinary course of their respective businesses, the underwriters and
their affiliates have engaged, and may in the future engage, in commercial
banking or investment banking transactions with us and with our affiliates.
Morgan Guaranty Trust Company of New York, which is an affiliate
S-41
<PAGE>
of J.P. Morgan Securities Inc. is the lead agent for the syndicate of banks,
and is itself a lender, under our acquisition facility. Morgan Guaranty will
receive a portion of the amounts to be repaid under that acquisition facility
with the net proceeds of this offering.
LEGAL MATTERS
The legality of the notes will be passed upon for us by Mayer, Brown & Platt,
which firm will rely upon the opinion of Ballard Spahr Andrews & Ingersoll, LLP
as to various matters of Maryland law. Cahill Gordon & Reindel, a partnership
including a professional corporation, will act as counsel to the underwriters
in connection with this offering.
S-42
<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 an offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MARCH 22, 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 Trust may offer from time to time, in one or more series and on terms
to be determined at the time of offering, up to $400,000,000 of any of the
following types of securities: common shares of beneficial interest, preferred
shares of beneficial interest, depositary shares representing preferred shares
and warrants to purchase common shares or preferred shares.
Cabot L.P. may offer from time to time up to $600,000,000 of its unsecured
senior debt securities in one or more series and on terms to be determined at
the time of offering. Cabot Trust may unconditionally guarantee Cabot L.P.'s
payment obligations on debt securities on the terms described herein and in the
applicable prospectus supplement.
Each time we offer any of the securities described in this prospectus we will
provide a prospectus supplement that will describe the specific terms of the
securities being offered. You should read both this prospectus and the
applicable prospectus supplement carefully before you invest in any securities.
This prospectus may not be used to sell any securities unless it is accompanied
by the applicable prospectus supplement.
The common shares are listed on the New York Stock Exchange under the symbol
"CTR." On March 19, 1999, the last reported sale price of the common shares was
$18.875 per share.
See "Risk Factors" beginning on page 1 for descriptions of material
considerations relevant to an investment in the securities described in this
prospectus.
-----------
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 March , 1999
<PAGE>
RISK FACTORS
Investing in the securities described in this prospectus involves various
risks. You should carefully consider the following material risks that we and
our investors face and should read this entire prospectus and the applicable
prospectus supplement before purchasing any of the securities described herein.
We May Not Be Able to Maintain Our Shareholder Distributions at Their Current
Level
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. We base the level
of our cash distributions to shareholders on numerous assumptions and
projections that we make regarding our future performance, any of which may
prove to be incorrect, 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, and
. competition and the costs of compliance with environmental and other
laws.
Provisions of Our Declaration of Trust and Bylaws, and Our Shareholder Rights
Plan, May Discourage Changes in Control of Us
Share Ownership Limited to 9.8% of Outstanding Shares. In order to remain
qualified as a real estate investment trust for federal income tax purposes
under the federal Tax Code, five or fewer persons 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, subject to
specified exceptions, no person may own more than 9.8% in number or value of
our issued and outstanding 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 the ownership limit, the transfer will be void.
This ownership limit 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 only one class being elected each year. These staggered terms may
lengthen to two years the time needed to change a majority of the members of
our Board of Trustees and may thereby reduce the possibility of an attempt to
acquire control of Cabot Trust.
Possibility of Additional Share Issuances. 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. Under the Maryland law governing our operations,
you will have no preemptive right to acquire any of our equity securities.
Accordingly, to the extent we issue additional equity securities, the voting
power of existing shareholders may be diluted.
Shareholder Rights Plan. We have adopted a shareholder rights plan that
could delay, defer or prevent change in control of Cabot Trust. See
"Description of Common Shares--Shareholder Rights Plan."
1
<PAGE>
We Would Incur Adverse Tax Consequences If We Fail to Qualify as a REIT
Adverse Consequences of Failure to Qualify as a REIT 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. We have received an opinion from our legal counsel that we
are organized in conformity with the requirements for qualification as a REIT
as of the taxable year ended December 31, 1998 and that the actual and proposed
methods of operation that we have described to our counsel satisfy 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.
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 tax rates. In 1998, this would
have resulted in our net income of $21.8 million, for which, based on our
assumed qualification as a REIT, no taxes have been provided in our Financial
Statements being taxed at regular corporate income tax rates. Unless entitled
to relief under 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
to our shareholders 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.
Limited Management Experience in Maintaining REIT Qualification. 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. The relevant requirements are detailed and complex.
Our management did not have experience in operating in compliance with these
requirements prior to the commencement of our operations in our current form in
February 1998.
We May Need to Borrow Funds to Meet Our REIT Minimum Distribution
Requirements. To qualify as a REIT, we are generally required to distribute at
least 95% of our annual 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 the 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 derive our income primarily from our share of Cabot L.P.'s income and the
cash available for distribution to our shareholders comes primarily from cash
distributions from Cabot L.P. We may have to borrow funds 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 cash income and pay deductible
expenses and when the income and expenses are included in our taxable income.
We Can Change Our Financing, Investment, Distribution and Other Business
Policies Without Your Approval.
Our Board of Trustees establishes our financing, investment, distribution
and other business policies based on management's recommendations and the
Board's evaluation of business and general economic conditions and other
relevant factors. The Board may change these policies without your consent.
Among other policies, it is our 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
and this policy could therefore be changed by the Board at any time. Our "debt-
to-total market capitalization ratio" is the ratio of our total consolidated
and unconsolidated debt as a percentage of the sum of the market value of
2
<PAGE>
all of our outstanding common shares and all outstanding partnership units of
Cabot L.P. that we do not own plus total consolidated and unconsolidated debt,
but excluding all nonrecourse consolidated debt in excess of our proportionate
share of the debt and all nonrecourse unconsolidated debt of partnerships in
which we are a limited partner.
Our Business Consists Primarily of Acquiring and Operating Real Estate and Is
Therefore Subject to Real Estate Investment and Operating Risks
Summary of Real Estate Risks. The yields available from equity investments
in real estate depend in large part on rental income, as compared with
operating and other expenses, and any appreciation in the value of the real
estate. The following factors, a number of which are not subject to our
control, may adversely affect our revenues and the value of our properties over
time:
. 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;
. the perceptions of prospective tenants of the attractiveness, convenience
and safety of our properties;
. our ability to provide adequate property management, maintenance and
insurance;
. our ability to collect rent from tenants on a timely basis;
. the expense of periodically renovating, repairing and reletting spaces in
our properties;
. increasing operating costs, including real estate taxes and utilities, to
the extent that the increased costs cannot be passed through to tenants;
. costs of compliance with environmental and other state and federal laws;
. interest rate levels; and
. the availability of financing.
Tenant Defaults and Bankruptcies May Reduce Our Income and Cash Flow. We
derived more than 98% of our income from rental operations during 1998. If a
significant number of tenants fail to meet their lease obligations, our
revenues and cash flow will decrease and we may be unable to make expected
distributions to our shareholders. We have not to date experienced any
significant tenant defaults and none were experienced by our organizer and
sponsor, Cabot Partners Limited Partnership, with respect to the investments of
its advisory clients. There is no assurance, however, that this favorable
experience will continue.
Defaulting tenants may seek bankruptcy protection, which could result in
payment delays or in the rejection and termination of the tenants' leases. This
would reduce our income, cash flow and amounts available to distribute to our
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.
We May Be Adversely Affected by Increases in Real Estate Operating Costs. 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.
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. 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. 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 those costs upon
renewal of their leases or that new tenants will agree to pay those costs.
3
<PAGE>
We May Encounter Significant Delays in Reletting Vacant Space and Resulting
Losses of Income. 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. Leases covering approximately
15.7% of our total leased rental space will expire in 1999 and leases covering
approximately 12.1% of our total rental space will expire in 2000, based on
annualized base rent.
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. Our estimates may prove to
be inaccurate. If we are unable promptly to relet or renew the leases for all
or a substantial portion of our space, if the rental rates upon the renewal or
reletting are significantly lower than expected rates or if our cost estimates
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 our existing
properties or at newly acquired properties and on the rents charged.
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, which would have an
adverse effect on our expected growth in funds from operations.
We May Incur Significant Environmental Remediation Costs or Liabilities. As
an owner and operator of real properties, we are subject to various federal,
state and local environmental laws, ordinances and regulations that impose
liability on current and previous owners and operators of real property for the
costs of removal or remediation of hazardous or toxic substances on, under or
in the property. Some of these laws impose liability whether or not the owner
or operator knew of, or was responsible for, the presence of the hazardous or
toxic substances. 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 the facility is or ever was owned or operated by the person. In
addition, the presence of hazardous or toxic substances, or the failure to
remediate the property properly, may adversely affect the owner's ability to
borrow using the real property as collateral.
Environmental laws and common law principles could be used to impose
liability for release into the air of and exposure to hazardous substances,
including asbestos-containing materials, and third parties may seek recovery
from owners or operators of real properties for personal injury or property
damage associated with exposure to the released hazardous substances. As an
owner of real properties, we could be liable for these types of costs.
Phase I environmental site assessment reports 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's for all of the properties
that we have acquired since the date of our formation. The purpose of Phase I's
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's for our properties were obtained in 1988 and
Phase I's on approximately 19% of the properties owned by us as of December 31,
1998 were obtained prior to 1995. Commonly accepted standards and practices for
Phase I's have evolved to encompass higher standards and more extensive
procedures over the period from 1988 to the present.
4
<PAGE>
The Phase I's 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 material
environmental liability. It is possible, however, that the Phase I's 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 or by
third parties unrelated to us.
We May Be Adversely Affected by Changes in Laws. Our properties are subject
to various federal, state and local regulatory requirements, including 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 current regulatory requirements.
However, new requirements may be imposed that would require us to make
significant unanticipated expenditures and that 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,
flood, earthquake and rental loss insurance with respect to our properties with
policy terms and conditions customarily carried for similar properties. We
believe that our current insurance coverage is adequate. However, our insurance
is subject to normal limitations on the amounts of coverage and some types of
losses, such as from wars or from earthquakes for properties located in
California, may be uninsurable or may only be insurable at a cost that we
believe outweighs the value of obtaining insurance. 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 1970s 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.
Seismic upgrading has been completed on 11 of the California properties.
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.
The Relative Illiquidity of Our Real Estate Investments May Limit Our
Ability to Adjust Our Property Portfolio to Respond to Market Changes. Equity
real estate investments are relatively illiquid. 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. These factors will tend to limit our ability to
vary our portfolio promptly in response to changes in market or general
economic or other conditions.
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 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 real
estate development and construction activities include:
5
<PAGE>
. we may find it necessary to abandon development project activities after
expending significant resources to determine their feasibility;
. the construction cost of a project may exceed original estimates;
. occupancy rates and rents at a newly completed property may not be
sufficient to make the property profitable;
. financing may not be available on favorable terms for development of a
property;
. the construction and lease up of a property may not be completed on
schedule, resulting in increased debt service and construction costs; and
. we may fail to obtain, or may experience delays in obtaining, necessary
zoning, land-use, building occupancy and other required governmental
permits and authorizations.
Conflicts of Interest
Possible Differing Objectives Between the Chief Executive Officer and Cabot
Trust Relating to Sales of Properties. As a holder of partnership units in
Cabot L.P., Ferdinand Colloredo-Mansfeld, who is our Chief Executive Officer
and the Chairman of our Board of Trustees, has unrealized taxable gains
associated with his interests in approximately $27.6 million in net book value
of properties that he contributed to Cabot L.P. in connection with its
formation. These seven contributed properties represented approximately 2.5% of
our total assets at December 31, 1998. Because he may incur different and more
adverse tax consequences than would our other investors upon the sale of those
properties he may have different views regarding the appropriate pricing and
timing of any sale of these properties. While the full Board of Trustees has
the ultimate authority to determine whether and on what terms to sell our
properties, Mr. Colloredo-Mansfeld could have an incentive to discourage sale
of the properties even though the sales might be financially advantageous for
Cabot Trust and its other shareholders as a whole.
Our Duties to Our Shareholders May Conflict with Our Duties to the Partners
of Cabot L.P. As the general partner of Cabot L.P., Cabot Trust owes fiduciary
duties to Cabot L.P.'s limited partners. Discharging these fiduciary duties
could conflict with its shareholders' interests. Pursuant to Cabot L.P.'s
limited partnership agreement, the limited partners have acknowledged that
Cabot Trust is acting both on behalf of its shareholders and, in its capacity
as general partner of Cabot L.P., on behalf 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 Cabot L.P. to take, or to decline to take, any
actions.
Influence of Significant Shareholders, Trustees and Executive Officers. As
of December 31, 1998 our senior management beneficially owned approximately
3.8% of our outstanding common shares, assuming the exchange of all Cabot L.P.
partnership units not held by Cabot Trust for common shares. At the same date,
the IBM Retirement Plan Trust, the New York State Teachers' Retirement System
and the Pennsylvania Public School Employes' Retirement System beneficially
owned approximately 23.6%, 13.7% and 12.7%, respectively, of our outstanding
common shares, assuming the exchange of all Cabot L.P. partnership units not
held by Cabot Trust for common shares. These holders were each original
investors in Cabot Trust and are permitted to hold their respective beneficial
ownership percentages of our shares pursuant to an exception to the above-
described general ownership limit of 9.8% set forth in Cabot Trust's
Declaration of Trust. 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.
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
6
<PAGE>
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 substantial sales
of common shares 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 at that date and
22,699,884 additional common shares issuable on conversion of outstanding units
of limited partnership interest in Cabot L.P. were 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 Cabot
L.P. partnership units will not be transferable, with exceptions for transfers
to related parties, donative transfers and bona fide pledges of shares, until
February 4, 2000. We have also reserved a total, as of December 31, 1998, of
4,347,500 common shares for issuance pursuant to options and other stock awards
to be granted to employees, officers and Trustees under our Long Term Incentive
Plan, of which 3,215,999 shares are subject to options and other awards that
have been granted to date, subject to four-year vesting schedules. We further
expect to acquire additional properties in exchange for units of limited
partnership interest in Cabot L.P. that will be exchangeable for our common
shares unless we exercise our right to purchase the units for cash instead of
issuing our common shares. 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
Potential Adverse Effects of Debt Financing on Our 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 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 existing indebtedness or that the
refinancing terms will be unfavorable. If we do not make mortgage payments, the
property or properties subject to the mortgage indebtedness could be foreclosed
upon by or transferred to the lender.
Rising Interest Rates. We have a 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.
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission using a "shelf" registration process. Under
this shelf process, Cabot 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 Cabot L.P. 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 specific terms of the securities being
offered and of the offering. The prospectus supplement may also supplement 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 "Cabot Trust," "we," "us," "our" and similar
references mean Cabot Trust and its subsidiaries, including Cabot L.P. and its
subsidiaries. All references herein to "Cabot L.P." mean Cabot Industrial
Properties, L.P. and its subsidiaries.
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WHERE YOU CAN FIND MORE INFORMATION
Cabot Trust and Cabot L.P. are subject to the reporting requirements of the
Securities Exchange Act of 1934, and are required to file annual, quarterly and
special reports with the SEC. Cabot Trust also files proxy statements and other
information with the SEC. You may read and copy any of these documents 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., 20 Broad Street,
New York, New York 10005.
A registration statement on Form S-3, of which this prospectus is a part,
has been filed jointly by Cabot Trust and Cabot L.P. with the SEC to register
offers and sales of the securities described in this prospectus under the
Securities Act of 1933. The registration statement contains additional
information about us and the 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, or on the SEC's World Wide Web
site, 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. Under the
SEC's regulations, 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 subsequently filed document
of the types described below.
We incorporate into this prospectus by reference the following documents
filed by Cabot Trust 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
----------------------------- --------------------------------
<S> <C>
Annual Report on Form 10-K................... Year ended December 31, 1998
Current Reports on Form 8-K.................. Filed on January 29, 1999 and March 22, 1999
Description of common shares contained in
Registration Statement on Form 8-A, as
amended..................................... Filed on January 27, 1998
Financial statements included in Registration
Statement on Form S-11 (Registration No.
333-61543).................................. Filed on August 14, 1998
All subsequent documents filed by Cabot Trust
pursuant to Sections 13(a), 13(c), 14 or After the date of this prospectus and prior
15(d) of the Exchange Act................... to the termination of the offering
</TABLE>
All filings made by Cabot L.P. with the SEC after the date hereof pursuant
to Section 15(d) of the Exchange Act are also incorporated into this prospectus
by reference.
To receive a free copy of any of the documents incorporated by reference in
this prospectus telephone or write Cabot Trust, Two Center Plaza, Suite 200,
Boston, MA 02108, Attention: Secretary; telephone: 617/723-0900. Exhibits to
the documents will not be provided unless they are specifically incorporated by
reference therein.
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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
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," "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 factors
described above under the heading "Risk Factors," as well as changes in the
industrial real estate market and the general economy, could cause future
events and actual results to differ materially from those set forth or
contemplated in the forward-looking statements.
CABOT TRUST AND CABOT L.P.
Cabot Trust is a real estate company formed to continue and expand the
national industrial real estate business of Cabot Partners Limited Partnership.
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 properties and have a significant presence in
targeted markets across the United States. We believe that our geographic and
property diversification and our substantial presence in multiple markets is a
strategic advantage that allows us to serve industrial space users with
multiple site and property type requirements, to compete more effectively in
our chosen markets and to respond quickly to acquisition opportunities across
the country.
Substantially all of our assets, including our interests in our properties,
are held by and our operations are conducted through Cabot L.P. Cabot Trust is
the sole general partner, and thereby controls the operations, of Cabot L.P.
and held an approximate 42.7% partnership interest therein as of December 31,
1998. Cabot L.P. receives substantially all of the economic benefit of the real
estate investment management business carried on by Cabot Advisors, Inc. by
virtue of its ownership of all of Cabot Advisor's outstanding preferred stock.
Cabot Trust was formed as a Maryland real estate investment trust, and Cabot
L.P. was organized as a limited partnership under Delaware law, on October 10,
1997.
The seven individuals who comprise our senior management have an average of
approximately 19 years of experience in the real estate industry. They have
worked together since 1987 as executive officers of Cabot Partners Limited
Partnership prior to the formation of Cabot Trust and, previously, as executive
officers of Cabot, Cabot & Forbes Realty Advisors, Inc. Realty 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.
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
We intend to use the net proceeds from the sale of the securities described
in this prospectus for the acquisition or development and construction of
industrial properties as suitable opportunities arise, repayment of our
outstanding indebtedness and for general business purposes. Pending their use,
we may invest the net proceeds in short-term, interest bearing securities.
RATIOS OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges for each of Cabot Trust and Cabot
L.P. for the year ended December 31, 1998 was 7.25x. Neither Cabot Trust nor
Cabot L.P. had any outstanding preference securities during the period.
The ratios of earnings to fixed charges are computed by dividing income from
continuing operations, plus fixed charges, excluding capitalized interest, by
fixed charges. For this purpose, income from continuing operations include,
with respect to Cabot Trust only, income from minority interests, but exclude
earnings from equity interests. Fixed charges consist of interest costs,
whether expensed or capitalized, the interest component of rental expense and
amortization of debt premiums and discounts.
DESCRIPTION OF DEBT SECURITIES
The debt securities will be issued under the indenture among Cabot L.P.,
Cabot Trust and The Bank of New York, as trustee. The indenture is subject to,
and is governed by, the Trust Indenture Act of 1939, as amended.
The following description summarizes what Cabot Trust and Cabot L.P. believe
to be the material provisions of the debt securities and the indenture, but is
not a complete statement of all of the provisions of the indenture or of any of
the debt securities. All section references appearing in the following
description are to sections of the indenture, and capitalized terms used but
not defined herein have the respective meanings set forth in the indenture. For
further information you should read the form of the indenture that is included
as an exhibit to the registration statement of which this prospectus forms a
part. See "Where You Can Find More Information" for instructions on how to
obtain a copy of the indenture.
Summary of Terms
The debt securities will be direct, senior unsecured and unsubordinated
obligations of Cabot L.P. and will rank equally with our other unsecured and
unsubordinated indebtedness, but will be subordinate to secured indebtedness,
of Cabot L.P. 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 by resolutions of Cabot Trust's Board of
Trustees, as general partner of Cabot L.P., or as established in one or more
indentures supplemental to the indenture.
The prospectus supplement relating to any series of debt securities offered
by Cabot L.P. will describe the specific terms of those debt securities and of
the guarantees, if any, endorsed on the debt securities, including, where
applicable:
(1)the title of the debt securities;
(2)any limit on the aggregate principal amount of the debt securities;
(3) the date or dates, or the method for determining the dates, on
which the principal of the debt securities will be payable and the
amounts of principal payable thereon;
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(4) the rate or rates, or the method by which the rates will be
determined, at which the debt securities will bear interest, if
any, and the date or dates, or the method for determining the
dates, from which any interest will accrue, the interest payment
dates on which any interest will be payable, the regular record
dates, if any, for the interest payment dates, or the method by
which the regular record dates will be determined, and the basis
on which interest will be calculated if other than a 360-day year
comprised of twelve 30-day months;
(5) the place or places where the required payments on the debt
securities will be made, where the debt securities may be
surrendered for registration of transfer or exchange and where
notices or demands to or upon Cabot L.P., or Cabot Trust if the
debt securities are guaranteed by it, in respect of the debt
securities, any related guarantees and the indenture may be
served;
(6) the periods within which, the prices at which, the currencies,
currency units or composite currencies in which, and the other
terms and conditions upon which the debt securities may be
redeemed, in whole or in part, at the option of Cabot L.P., if
Cabot L.P. is to have this option, including any provision for the
payment of any amount (a "Make-Whole Amount") in lieu of the
interest that, but for the redemption, would accrue during the
remaining original term of the debt securities to be redeemed;
(7) the obligation, if any, of Cabot L.P. to redeem, repay or purchase
the debt securities pursuant to any sinking fund or analogous
provision or at the option of a holder thereof, and the periods
within which, the dates on which, the prices at which, the
currencies, currency units or composite currencies in which, and
the other terms and conditions upon which the debt securities will
be redeemed, repaid or purchased, in whole or in part;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denomination in which the debt securities will be
issuable;
(9) if other than the trustee, the identity of the security registrar
and the paying agent for the debt securities;
(10) the percentage of the principal amount at which the debt
securities will be issued and, if other than their full principal
amount, the portion of the principal amount of the debt securities
that would be payable upon declaration of acceleration of the
maturity thereof;
(11) if other than United States dollars, the currency or currencies in
which payments on the debt securities are denominated and payable;
(12) whether the amounts of payments required to be made on the debt
securities are to be determined with reference to an index,
formula or other method and the manner in which those amounts will
be determined;
(13) whether the required payments on the debt securities are to be
payable, at the election of Cabot L.P. or a holder of the debt
securities, in one or more currencies, currency units or composite
currencies other than that in which the debt securities are
denominated or stated to be payable, the periods within which, and
the terms and conditions upon which, the 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
currencies in which the debt securities are denominated or stated
to be payable and the currencies, currency units or composite
currencies in which the debt securities are to be so payable;
(14) provisions, if any, granting special rights to the holders of the
debt securities upon the occurrence of specified events;
(15) any deletions from, modifications of or additions to the terms of
the debt securities as compared with the events of default,
covenants or other terms set forth in the initial form of the
indenture and described herein;
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(16) whether the debt securities are to be issuable in permanent global
form and, if so, whether beneficial owners of interests in any
permanent global debt security may exchange the interests for debt
securities of the same series and of like tenor of any authorized
form and denomination, the circumstances under which any exchanges
may occur and the identity of the depository for the series of
debt securities;
(17) the person to whom any interest on any debt security is payable,
if other than the person in whose name the debt security is
registered at the close of business on the regular record date for
the interest;
(18) the applicability, if any, of the defeasance and covenant
defeasance provisions of the indenture to the debt securities and
any provisions in modification thereof, in addition thereto or in
lieu thereof;
(19) if the debt securities are to be issuable in definitive form only
upon receipt of certificates, documents or conditions, the form
and terms of the certificates, documents or conditions;
(20) whether the debt securities are to be accompanied by a guarantee
and, if so, the terms of the guarantees endorsed thereon;
(21) whether and under what circumstances Cabot L.P. will be required
to pay additional amounts ("Additional Amounts") under the terms
of a series of debt securities in respect of taxes imposed on any
holder who is not a United States person and, if so, whether and
on what terms Cabot L.P. will have the option to redeem the debt
securities rather than pay the Additional Amounts; and
(22) any other terms of the 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
may bear no interest or may bear interest at a rate which at the time of
issuance is below market rates (such debt securities being referred to herein
as "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, Cabot L.P. will have the ability to reopen a previously
issued series of debt securities and issue additional debt securities of that
series without the consent of the holders of that series of debt securities
(Section 301).
The indenture will not contain any other provisions that would limit the
ability of Cabot L.P. or Cabot Trust to incur indebtedness or that would
protect holders of debt securities in the event of:
(1) a highly leveraged or similar transaction involving Cabot L.P. or
Cabot Trust, the management of Cabot L.P. or Cabot Trust, or any
affiliate of them;
(2)a change of control of Cabot L.P. or Cabot Trust; or
(3) a reorganization, restructuring, merger or similar transaction
involving Cabot L.P. or Cabot Trust that may adversely affect the
holders of the debt securities.
However, Cabot Trust's Declaration of Trust contains restrictions on ownership
and transfers of Cabot Trust's common and preferred shares which are designed
to preserve Cabot Trust's status as a REIT but may also act to prevent or
hinder a change of control of Cabot Trust. Cabot Trust's Shareholder Rights
Plan and provisions of its Declaration of Trust and Bylaws may also inhibit
changes in control of Cabot Trust. See "Description of Common Shares" and
"Selected Provisions of Maryland Law and of Cabot Trust's Declaration of Trust
and
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Bylaws" for further information regarding the shareholder rights plan and the
limitations on ownership and transfer of Cabot Trust's shares.
Denominations
The debt securities of any series will be issuable in denominations of
$1,000 and integral multiples thereof. (Section 302).
Principal and Interest
Unless otherwise described in the applicable prospectus supplement, all
required payments on any series of debt securities will be payable at the
corporate trust office of the trustee, provided that, at the option of Cabot
L.P., 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 the person at an account maintained within the United
States (Sections 301, 305, 306, 307 and 1002).
If any payment date falls on a day that is not a business day, the required
payment will be made on the next business day and no additional interest will
be paid as a result of the delay in payment (Section 113). Any interest not
punctually paid or duly provided for on any interest payment date will cease to
be payable to the holder on the applicable regular record date and either may
be paid to the person in whose name the debt security is registered at the
close of business on a special record date for the payment of the defaulted
interest to be fixed by the trustee, 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 limitations imposed by the indenture 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 the
debt securities at the corporate 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
must 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 Cabot L.P. may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith
(Section 305).
Cabot L.P. 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 Cabot L.P. has designated an office or
agency, Cabot L.P. may at any time rescind the designation or approve a change
in the location of the office or agency, except that Cabot L.P., or Cabot Trust
in the case of a series of debt securities guaranteed by it, will be required
to maintain an office or agency in each place of payment for the debt
securities (Section 1002).
Neither Cabot L.P. nor the trustee will 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 the debt security not to be so
repaid (Section 305).
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Merger, Consolidation or Sale
Cabot L.P. or Cabot Trust may consolidate with, or sell, lease or convey all
or substantially all of its assets to, or merge with or into, any other person
without the consent of the holders of that series of debt securities, if:
(1) either (A) Cabot L.P. or Cabot Trust, will be the continuing
entity, or (B) the successor entity formed by or resulting from any
consolidation or merger or which will have received the transfer of
the assets is a person organized and existing under the laws of the
United States or any state thereof and will expressly assume
payments on all of the debt securities, in the case of any
successor to Cabot L.P., or any applicable guarantee in the case of
any successor to Cabot Trust, and the due and punctual performance
and observance of all of the covenants and conditions contained in
the indenture and the debt securities or guarantee;
(2) immediately after giving effect to the transaction and taking into
account any indebtedness which becomes an obligation of Cabot L.P.
or Cabot Trust or any subsidiary, no event of default under the
indenture will have occurred and be continuing; and
(3) an officer's certificate and legal opinion as to compliance with
the conditions described above is delivered to the trustee.
(Sections 801, 803, 804 and 806)
Covenants
Under the indenture, Cabot Trust and we will each generally be required to
comply with the following covenants.
Existence. Except as permitted under the circumstances described under the
heading "Merger, Consolidation or Sale," each of Cabot L.P. and we will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence, rights and franchises, except that neither of us 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. Cabot L.P. and 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, except that we will not be prevented from selling our properties or
otherwise disposing of them for value in the ordinary course of business
(Section 1005).
Insurance. Cabot L.P. and 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. Cabot L.P. and we will pay or discharge
or cause to be paid or discharged, before the same 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, except that we will not be required to
pay or discharge or cause to be paid or discharged any 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 Cabot L.P. or we are
subject to Section 13 or 15(d) of the Exchange Act, Cabot L.P. and we will, to
the extent permitted under the Exchange Act, file with the
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SEC the annual reports, quarterly reports and other documents which each of us
would have been required to file with the SEC pursuant to Section 13 or 15(d)
if we were so subject, on or prior to the respective dates by which they would
have been required so to file the documents. Cabot L.P. and Cabot Trust 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
the holders, copies of the annual reports and quarterly reports
which Cabot L.P. and we would have been required to file with the
SEC pursuant to Section 13 or 15(d) of the Exchange Act if each of
us were subject to these Sections; and
(B) file with the trustee copies of the annual reports, quarterly
reports and other documents which Cabot L.P. and we would have been
required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act if each of us were subject to these Sections; and
(2) if the filing of the above documents by either of 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 the documents to any prospective holder
(Section 1008).
Possible Additional Covenants 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.
Events of Default, Notice and Waiver
The indenture provides that each of 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 the series;
(2) default in the payments of principal on any debt security of the
series at its maturity;
(3) default in making any sinking fund payment that is required for any
debt security of the series;
(4) default in the performance of any other covenant or warranty
contained in the indenture that continues for 60 days after written
notice of the default is given 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 Cabot L.P., or of
Cabot Trust if the debt securities of the series are guaranteed by
Cabot Trust, or any mortgage, indenture or other instrument under
which the indebtedness is issued or secured, but only if the
default has occurred after the expiration of any applicable grace
period, the default has resulted in the acceleration of the
maturity of the indebtedness and the indebtedness has not been
discharged or the acceleration of the indebtedness has not been
rescinded or annulled;
(6) judgments against Cabot L.P. or any of its subsidiaries, or against
Cabot Trust or any of its subsidiaries if the debt securities of
the series are guaranteed by Cabot Trust, in an aggregate amount,
not covered by insurance, exceeding $20,000,000;
(7) specified events of bankruptcy, insolvency or reorganization, or
court appointment of a receiver, liquidator or trustee for Cabot
L.P., for Cabot Trust if the debt securities are guaranteed by
Cabot
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Trust, for any Significant Subsidiary of Cabot L.P. or, if the debt
securities are guaranteed by Cabot Trust, Cabot Trust, or for all or
substantially all of the properties of Cabot L.P.; and
(8) any other event of default provided with respect to a particular
series of debt securities (Section 501).
The term Significant Subsidiary as used above means "significant subsidiary"
as defined in Regulation S-X of the SEC.
If an event of default occurs and continues unremedied, the trustee or the
holders of at least 25% of the principal amount of the outstanding debt
securities of that series may declare to be immediately due and payable the
principal of (or, if the debt securities of that series are Original Issue
Discount Securities or Indexed Securities, the portion of the principal that
may be specified in the terms thereof), and any applicable Make-Whole Amount
or other amount that under the terms of the debt securities of that series may
be declared to be due and payable upon the occurrence of an event of default,
in each case immediately by written notice to Cabot L.P., and to Cabot Trust
if the series of debt securities is guaranteed by Cabot Trust, and to the
trustee if the notice is given by the holders of the debt securities.
At any time after a declaration of acceleration with respect to debt
securities of a series has been made, but before a judgment or decree for
payment of the money due has been obtained by the trustee, the holders of a
majority in principal amount of the outstanding debt securities of the series
may rescind and annul the declaration and its consequences if:
(1) Cabot L.P., or Cabot Trust if the series of debt securities is
guaranteed by it, has paid or deposited with the trustee all
required payments on the debt securities of the series, plus
reasonable compensation, expenses, disbursements and advances of the
trustee; and
(2) all events of default, other than the nonpayment of amounts owing
with respect to debt securities of the series, have been cured or
waived as provided in the indenture (Section 502).
The indenture also provides that the holders of at least a majority in
principal amount of the outstanding debt securities of any series may waive
any past default with respect to the series and its consequences, except a
default in the payment on any debt security of the 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, except that the trustee may
withhold notice to the holders of any series of debt securities, except a
payment default, if a responsible officer of the trustee considers the
withholding to be in the interest of the 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 at
least 25% in principal amount of the outstanding debt securities of the
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 on the debt securities on or
after the due dates (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 the
holders have offered to the trustee reasonable security or indemnity (Section
602). The holders of a majority in principal amount of the outstanding debt
securities of any series will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the trustee, or
of exercising any trust or power conferred on the
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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 the series not joining therein (Section 512).
Within 120 days after the end of each fiscal year, Cabot L.P., and Cabot
Trust for any series of debt securities guaranteed by it, must deliver a
certificate to the trustee, signed by one of several specified officers,
stating whether or not the officer has knowledge of any default under the
indenture and, if so, specifying each default and the nature and status thereof
(Section 1009).
Modification of the Indenture
Modifications of and amendments to the indenture may be made with the
consent of the holders of at least a majority in principal amount of all
outstanding debt securities which are affected by the modification or
amendment, except that no modification or amendment may, without the consent of
the holder of each debt security affected thereby:
(1) change the maturity date of payments on any debt security;
(2) reduce the rate of interest or payment amounts on any debt
security, or reduce the amount of principal of an Original Issue
Discount Security or the Make-Whole Amount, if any, that would be
due and payable on any 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 debt security;
(3) change the place of payment, or the currency for payment of any
debt security;
(4) impair the right to institute suit for the enforcement of any
payment on or with respect to any 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 provisions thereof or 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 Cabot Trust under the related
guarantees in respect of payments on any series of debt securities
guaranteed by it; or
(7) modify any of the foregoing provisions or any of the provisions
relating to the waiver of certain past defaults or covenants,
except to increase the required percentage to effect the action or
to provide that other provisions may not be modified or waived
without the consent of the holder of the debt security (Section
902).
The holders of at least a majority in principal amount of each series of
outstanding debt securities have the right to waive compliance by Cabot L.P.
and Cabot Trust with the covenants given by them in the indenture (Section
1011).
Cabot L.P., Cabot Trust 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 Cabot L.P. as
obligor under the indenture or Cabot Trust as the guarantor under
any 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 terms of, debt securities in bearer
form, or to permit or facilitate the issuance of debt securities
in uncertificated form, provided that the action will not
adversely affect the interests of the holders of any series of
debt securities in any material respect;
(5) to change or eliminate any provisions of the indenture, provided
that any change or elimination will become effective only when
there are no debt securities outstanding of any series created
prior thereto which are entitled to the benefit of the provision;
(6) to secure the debt securities;
(7) to establish the form or terms of any series of debt securities;
(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 the action will not
adversely affect the interests of holders of any series of debt
securities 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; or
(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 the debt securities, provided that the action will not
adversely affect the interests of the holders of any series of
debt securities in any material respect.
The indenture contains provisions for convening meetings of the holders of a
series of debt securities (Section 1501). A meeting may be called at any time
by the trustee, and also, upon request, by Cabot L.P., Cabot Trust in the case
of a series of debt securities guaranteed by it, or the holders of at least 10%
in principal amount of the outstanding debt securities of the series, in any
case upon notice given as provided in the indenture (Section 1502).
Discharge, Defeasance and Covenant Defeasance
Cabot L.P.may discharge 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, including scheduled for redemption within one year, by
irrevocably depositing funds with the trustee, in trust, in an amount
sufficient to make all payments that are due or that will become due through
the maturity date or the redemption date of the debt securities, as the case
may be (Section 1401, 1402, 1403 and 1404).
The indenture contains provisions that, if made applicable to the debt
securities of or within a series pursuant to Section 301 of the indenture, will
permit Cabot L.P. to elect either a "defeasance" or a "covenant defeasance"
(each as defined in the following paragraphs) with respect to the debt
securities at any time, or at the time or times as may be specified under the
terms of the securities. Either of the elections may be made, however, only
upon the irrevocable deposit with the trustee, in trust, of a specified amount
of cash or Governmental Obligations or both. The "specified amount" of cash or
Government Obligations required to be deposited is the amount, which, through
the scheduled payment of principal and interest in accordance with the terms
will provide money in an amount sufficient to pay all amounts due on the debt
securities, and any mandatory sinking fund or analogous payments thereon, on
the scheduled due dates (Section 1404).
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A "defeasance" means an election by Cabot L.P. to defease and discharge
itself and, if applicable, Cabot Trust from any and all obligations with
respect to the debt securities. However, Cabot L.P. and, if applicable, Cabot
Trust would, in the event of a defeasance, still be obligated to:
(1) pay Additional Amounts, if any, upon the occurrence of events of
tax, assessment or governmental charge with respect to payments on
the debt securities;
(2) register the transfer or exchange of the debt securities;
(3) replace temporary or mutilated, destroyed, lost or stolen debt
securities;
(4) maintain an office or agency in respect of the debt securities; and
(5) hold moneys for payment in trust (Section 1402).
A "covenant defeasance" means an election by Cabot L.P. to release itself
and, if applicable, Cabot Trust from its obligations with respect to the debt
securities under Sections 1004 to 1008, inclusive, of the indenture (which are
the restrictions described above under the heading "---Covenants") and, if
provided pursuant to Section 301 of the indenture, their obligations with
respect to any other covenant. Any subsequent omission to comply with those
obligations would not constitute a default or an event of default with respect
to the debt securities (Section 1403).
A trust may only be established for the purpose of effecting a defeasance or
covenant defeasance if, among other things, Cabot L.P. or, if applicable, Cabot
Trust has delivered to the trustee an Opinion of Counsel (as specified in the
indenture) to the effect that the holders of the applicable debt securities
will not recognize income, gain or loss for United States federal income tax
purposes as a result of the defeasance or covenant defeasance and will be
subject to United States federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if the defeasance or
covenant defeasance had not occurred. In the case of defeasance, the Opinion of
Counsel must further refer to and be based on a ruling of the Internal Revenue
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 the
government which issued the foreign currency in which the debt
securities of the series are payable, the payment of which is
unconditionally guaranteed as a full faith and credit obligation by
the United States of America or the other government;
which, in either case, are not callable or redeemable at the option of the
issuer thereof, and will also include a depository receipt issued by a bank or
trust company as custodian with respect to any Government Obligation or a
specific payment of interest on or principal of any Government Obligation held
by the custodian for the account of the holder of a depository receipt,
provided that (except as required by law) the custodian is not authorized to
make any deduction from the amount payable to the holder of the 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 the depository receipt (Section 101).
If after Cabot L.P. or, if applicable, Cabot Trust 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
the series is entitled to, and does, elect pursuant to Section 301 of the
indenture or the terms of the debt security to receive payment in a currency,
currency unit or composite currency other than that in which the deposit has
been made in respect of the debt security or (b) a Conversion Event (as defined
below) occurs in
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respect of the currency, currency unit or composite currency in which the
deposit has been made, the indebtedness represented by the debt security will
be deemed to have been, and will be, fully discharged and satisfied through the
payments due on the debt security as they become due out of the proceeds
yielded by converting the amount so deposited in respect of the debt security
into the currency, currency unit or composite currency in which the debt
security becomes payable as a result of the 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 the 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.
All payments on any debt security that, under the terms of the indenture, are
payable in a foreign currency that ceases to be used by its government of
issuance must be made in United States dollars (Section 101).
If Cabot L.P. effects covenant defeasance with respect to any debt
securities and those 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 the debt securities), the amount in
the currency, currency unit or composite currency in which the debt securities
are payable, and Government Obligations on deposit with the trustee, will be
sufficient to pay amounts due on the debt securities at the time of their
stated maturity but may not be sufficient to pay amounts due on the debt
securities at the time of the acceleration resulting from the event of default.
However, Cabot L.P. or, if applicable, Cabot Trust would remain liable to make
payments due at the time of acceleration.
The applicable prospectus supplement may further describe the provisions, if
any, permitting the 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 Cabot Trust or equity interest in Cabot L.P.
Book-Entry Securities
The debt securities of a series may be represented by one or more global
certificates. A global certificate representing debt securities will be
deposited with, or on behalf of, The Depository Trust Company or a successor
depository appointed by Cabot L.P. (the "Depository") and registered in the
name of the Depository or its nominee.
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 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
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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. The Rules applicable to DTC
and its participants are on file with the SEC.
Purchases of debt securities represented by global certificates 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 (a "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 purchasers of securities take physical
delivery of the securities in definitive form. Such laws may impair a holder's
ability to transfer beneficial interests in debt securities represented by
global certificates.
So long as the Depository for debt securities represented by global
certificates, or its nominee, is the registered owner of the global
certificates, the Depository or its nominee, as the case may be, will be
considered the sole owner or holder of those securities represented by the
global certificates for all purposes under the indenture. Except as provided
below, beneficial owners of debt securities represented by global certificates
will not be entitled to have debt securities represented by the global
certificates 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 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 the debt
securities are credited, which may or may not be the beneficial 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 that 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 Cabot
L.P. 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 and who are
identified in a listing attached to the omnibus proxy.
Payments of amounts due on debt securities represented by the global
certificates registered in the name of DTC or its nominee will be made by Cabot
L.P. 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 debt securities represented by the global
certificates. None of Cabot L.P., Cabot Trust, 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 in
debt securities represented by global certificates or for maintaining,
supervising or reviewing any records relating to those beneficial ownership
interests.
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Cabot L.P. has been advised that DTC, upon receipt of any payments in
respect of debt securities represented by global certificates, 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
the participant and not of DTC, the paying agent, Cabot L.P. or Cabot Trust,
subject to any statutory or regulatory requirements that may be in effect from
time to time. Payments to DTC are the responsibility of the paying agent, Cabot
L.P. or Cabot Trust, as the case may be, disbursement of the payments to direct
participants of DTC will be the responsibility of DTC, and disbursement of the
payments to the beneficial owners shall be the responsibility of DTC's 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 Cabot L.P. within 90 days, Cabot L.P. will issue certificated notes in
exchange for the debt securities represented by the Global Security.
No Personal Liability
No past, present or future trustee, officer, employee or shareholder of
Cabot L.P. or Cabot Trust or any successor thereof will have any liability for
any obligations of Cabot L.P. or Cabot Trust under the debt securities or for
any claim based on, in respect of, or by reason of, the obligations or their
creation. Each holder of debt securities by accepting the debt securities
waives and releases all liabilities described in the preceding sentence. The
waiver and release are part of the consideration for the issue of debt
securities (Section 111).
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 the series. In the event that two or more Persons are acting as trustee with
respect to different series of debt securities, each trustee will 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 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).
DESCRIPTION OF GUARANTEES OF DEBT SECURITIES
Cabot Trust may unconditionally and irrevocably guarantee, on a senior or
subordinated basis, the due and punctual payment of amounts due on one or more
of the series 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. The
applicability and any additional terms of any guarantee relating to a series of
debt securities will be described in the applicable prospectus supplement. The
guarantees will be unsecured obligations of Cabot Trust.
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DESCRIPTION OF COMMON SHARES
Summary of Terms
Our Declaration of Trust provides that we may issue up to 150,000,000 shares
of beneficial interest, which may consist of common shares and any other types
or classes of shares that the Trustees may create and authorize from time to
time, including preferred shares. At December 31, 1998, we had 18,586,764
common shares and no preferred shares outstanding.
As permitted by Maryland law, the Declaration of Trust permits the Board of
Trustees, without any action by the shareholders of Cabot Trust, to amend the
Declaration of Trust to increase or decrease the aggregate number of shares or
the number of shares of any class or series of shares of beneficial interest
that the Trust has authority to issue. The additional shares, including common
shares, will be available for issuance without further action by Cabot Trust'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 Cabot
Trust'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 the heading "Shareholder Rights Plan."
The following paragraph describes the rights of holders of the common shares
to which any prospectus supplement may relate, including a prospectus
supplement relating to common shares issuable pursuant to subscription
offerings or rights offerings or upon conversion of preferred shares which are
offered pursuant to the 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 Cabot Trust. For further information regarding the common shares,
including a description of some provisions that could have the effect of
delaying, deferring or preventing a change in control, see "Selected Provisions
of Maryland Law and of Cabot Trust's Declaration of Trust and Bylaws."
The issued and outstanding common shares are fully paid and, except as set
forth below under the heading "--Shareholder Liability," non-assessable.
Subject to the provisions of the Declaration of Trust regarding Excess Shares,
which are described below under the heading "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 distributions that may be declared from time
to time by the Board out of funds legally available therefor. Cabot Trust
currently pays regular quarterly dividends. Holders of common shares have no
conversion, redemption, preemptive or exchange rights to subscribe to any
securities of Cabot Trust. In the event of a liquidation, dissolution or
winding up of the affairs of Cabot Trust, the holders of the common shares are
entitled to share ratably in the assets of Cabot Trust 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 Cabot Trust, including
any preferred shares issued 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 June 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 additional common share issued. Each purchase right
entitles the holder, under some circumstances, to purchase one one-hundredth
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of a share of a series of participating preferred shares, par value $.01 per
share 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 the Acquiring Persons
becoming the beneficial owner of 15% or more of our outstanding common
shares.
Some 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 (the "Grand Fathered
Persons") will not be deemed 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 and restated as of
September 10, 1998, between Cabot Trust 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
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 some 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, Cabot Trust must meet some
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 attribution rules), by five or fewer individuals (as defined in the
Tax Code to include some 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 some 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% in number or value of
our issued and outstanding 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 ownership
attribution rules under the Tax Code, 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 Cabot Trust 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 the common or preferred shares
so transferred.
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Subject to the exceptions described in the following paragraph, 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 Cabot Trust 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 the
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 the 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.
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 the 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 some 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 applicable ownership attribution rules,
of shares of beneficial interest in excess of the Ownership Limit would result
in the termination of our REIT status.
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 the 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. The transfer must be made within
60 days after the latest of the date of the transfer that resulted in the
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 the 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 the 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 the transfer) and the price per share
received by the Share Trustee from the sale of the 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.
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 the Excess Shares (or, in the case of a gift or
devise, the market price per share on the date of the transfer) and the market
price per share on the date that we accept, or our designee accepts, the offer.
We have the right to accept the offer for a period of 90 days after the later
of the date of the purported transfer which resulted in the Excess Shares and
the date we determine in good faith that a transfer resulting in the 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 the class of shares on the trading
day immediately preceding the relevant date as reported on any exchange or
quotation system on or through which the class of shares may be traded, or if
not then traded on or through any exchange or quotation system, then the market
price of the 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 the event or, in the event of a
proposed or
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attempted transfer, must give at least 15 days prior written notice of the
event, and will be further required to provide to us other information as we
may request in order to determine the effect, if any, of the 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 the
direct or indirect owner, the number of common and preferred shares owned
directly or indirectly by the person and a description of how the shares are
held. In addition, each direct or indirect shareholder must provide to us
additional information as we may request in order to determine the effect, if
any, of the ownership on our REIT status and to ensure compliance with the
Ownership Limit.
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 limitation 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 Cabot Trust will be personally liable for any
obligations of Cabot Trust, other than the obligation to pay to Cabot Trust 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
Cabot Trust must indemnify each shareholder against claims or liabilities to
which the shareholder may become subject by reason of his being or having been
a shareholder. Cabot Trust must also reimburse each shareholder for all legal
and other expenses reasonably incurred in connection with any of those claims
or liabilities, unless, in either case, the claims or liabilities arise out of
the shareholder's bad faith, willful misconduct or gross negligence. In either
case, the shareholder must give prompt notice as to the claims or liabilities
and must take such action as will permit Cabot Trust to conduct the defense
thereof. In addition, it is Cabot Trust's policy to include a clause in its
contracts which provides that shareholders assume no personal liability for
obligations entered into on behalf of Cabot Trust. However, with respect to
tort claims, contractual claims where shareholder liability is not so negated,
claims for taxes and statutory liability, a shareholder may, in some
jurisdictions, be personally liable to the extent that the claims are not
satisfied by Cabot Trust. Cabot Trust carries public liability insurance which
it considers adequate. For this reason, Cabot Trust believes that any risk of
personal liability to shareholders is limited to situations in which Cabot
Trust's assets plus its insurance coverage are not sufficient to satisfy the
claims against Cabot Trust 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, Cabot Trust 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 Cabot
Trust or is or was serving at the request of Cabot Trust 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 the person may become
subject by reason of service in this capacity and to pay or
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reimburse reasonable expenses, as the expenses are incurred, of each trustee in
connection with the proceedings. The Board believes that the indemnification
provision will enhance Cabot Trust's ability to attract and retain superior
Trustees and officers for Cabot Trust and subsidiaries of Cabot Trust.
Additionally, Cabot Trust has entered into indemnity agreements with each of
its executive officers and Trustees that require Cabot Trust to indemnify them
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 Cabot Trust.
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 securities to be offered pursuant to
this prospectus and an applicable prospectus statement.
DESCRIPTION OF PREFERRED SHARES
The Declaration of Trust provides that Cabot Trust may issue up to
150,000,000 Shares, consisting of common shares and any other types or classes
of securities, including preferred shares, that the Trustees may create and
authorize from time to time and designate as representing a beneficial interest
in Cabot Trust. 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 the heading "Description of Common Shares--Shareholders Rights
Plan" below. Cabot Trust will contribute proceeds of issuances of each series
of preferred shares to Cabot L.P. in exchange for "mirror" preferred
partnership units having terms that are substantially similar to those of the
preferred shares.
The following description summarizes what Cabot Trust believes to be the
material 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 the registration statement by the filing of a
Current Report on Form 8-K.
Permitted 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 the provisions as may be desired concerning
voting, redemption, dividends, dissolution or the distribution of assets,
conversion or exchange, and other subjects or matters as may be fixed by
resolution of the Board of Trustees. The Board may provide to holders 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 Cabot Trust. The preferred
shares will, when issued, be fully paid and nonassessable by Cabot Trust
(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 Cabot Trust will describe the specific terms thereof, including, where
applicable:
(1) the title and stated value of the preferred shares;
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(2) the number of the preferred shares offered, the liquidation preference
per share and the offering price of the preferred shares;
(3) the dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculation thereof applicable to the preferred shares;
(4) the date from which dividends on the preferred shares will accumulate,
if applicable;
(5) the procedures for any auction and remarketing, if any, for the
preferred shares;
(6) the provisions for a sinking fund, if any, for the preferred shares;
(7) the provisions for redemption, if applicable, of the preferred shares;
(8) any listing of the preferred shares on any securities exchange;
(9) the terms and conditions, if applicable, upon which the preferred
shares will be convertible into common shares of Cabot Trust,
including the conversion price (or manner of calculation thereof);
(10) any other specific terms, preferences, rights, limitations or
restrictions of the preferred shares;
(11) a discussion of federal income tax considerations applicable to the
preferred shares;
(12) the relative ranking and preferences of the preferred shares as to
dividend rights and rights upon liquidation, dissolution or winding up
of the affairs of Cabot Trust;
(13) any limitations on issuance of any series of preferred shares ranking
senior to or on a parity with the series of preferred shares as to
dividend rights and rights upon liquidation, dissolution or winding up
of the affairs of Cabot Trust; 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 Cabot Trust as a REIT.
Rank
The preferred shares will, with respect to dividend rights and rights upon
liquidations, dissolution or winding up of Cabot Trust, rank:
. senior to all classes or series of common shares of Cabot Trust, and to
all equity securities ranking junior to the preferred shares;
. on a parity with all equity securities issued by Cabot Trust the terms of
which specifically provide that the equity securities rank on a parity
with the preferred shares; and
. junior to all equity securities issued by Cabot Trust the terms of which
specifically provide that the 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 Cabot Trust
legally available for payment, cash dividends at the rates and on the dates as
will be set forth in the applicable prospectus supplement. Each dividend will
be payable to holders of record as they appear on the share transfer books of
Cabot Trust on the record dates that will 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
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dividend payment date on any series of the preferred shares for which dividends
are non-cumulative, then the holders of the series of the preferred shares will
have no right to receive a dividend in respect of the dividend period ending on
the dividend payment date, and Cabot Trust will have no obligation to pay the
dividend accrued for the period, whether or not dividends on the 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 shares of Cabot Trust of any
other series ranking, as to dividends, on a parity with or junior to the
preferred shares of the series for any period. However, dividends may be so
declared or paid or set apart for payment on the shares of Cabot Trust:
(1) if the 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 the payment on the preferred shares of the series for all past
dividend periods and the then current dividend period; or
(2) if the 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 the payment on the
preferred shares of the series.
When dividends are not paid in full (or a sum sufficient for the 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 the series (the "Equally Ranked Series"), all dividends
declared upon preferred shares of the series and any Equally Ranked Series will
be declared pro rata. As used in the preceding sentence, "pro rata" means that
the amount of dividends declared per preferred share of the series and the
other Equally Ranked Series will bear to each other the same ratio that accrued
dividends per share on the preferred shares of the series (not including any
accumulation in respect of unpaid dividends if the preferred shares do not have
a cumulative dividend) and the other Equally Ranked Series bear to each other.
No interest, or sum or money in lieu of interest, will be payable in respect of
any dividend payment or payments on preferred shares of the series which may be
in arrears.
Except as provided in the immediately preceding paragraph, no dividends
(other than in common shares or other shares ranking junior to the preferred
shares of the series as to dividends and upon liquidation) will be declared or
paid or set aside for payment (or other distribution declared or made) upon the
common shares, or any other shares of Cabot Trust ranking junior to or on a
parity with the preferred shares of the series as to dividends or upon
liquidation unless:
(1) if the series of preferred shares has a cumulative dividend, full
cumulative dividends on the preferred shares of the 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 the series of preferred shares does not have a cumulative dividend,
full dividends on the preferred shares of the 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 shares of Cabot Trust ranking junior to or
on a parity with the preferred shares of the series as to dividends or upon
liquidation, may 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 the shares) by Cabot Trust. However, a redemption, purchase
or other acquisition is allowed if it is a conversion into or an exchange for
other shares of Cabot Trust ranking junior to the preferred shares of the
series as to dividends and upon liquidation.
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Redemption
Individual series of preferred shares may be made subject to mandatory
redemption or redemption at the option of Cabot Trust, 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 the preferred shares
that must be redeemed by Cabot Trust in each year commencing after a date to be
specified. The prospectus supplement will also specify a redemption price per
share that must be paid, together with an amount equal to all accrued and
unpaid dividends thereon to the date of redemption, unless the preferred shares
do not have a cumulative dividend, in which case the full amount payable will
not include any accumulation in respect of unpaid dividends for prior dividend
periods. 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 shares of Cabot Trust, the terms of
the preferred shares may provide that, if no shares 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, the preferred shares will automatically
and mandatorily be converted into the applicable shares of Cabot Trust pursuant
to the conversion provisions specified in the applicable prospectus supplement.
However, no shares of any series of preferred shares may be redeemed without
simultaneously redeeming all outstanding preferred shares of the series unless:
(1) if the 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 the 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, Cabot Trust will not be permitted to purchase or otherwise acquire
directly or indirectly any preferred shares of the series (except by conversion
into or exchange for shares of Cabot Trust ranking junior to the preferred
shares of the 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, will not
prevent the purchase or acquisition of preferred shares of the series to
preserve the REIT status of Cabot Trust or pursuant to a purchase or exchange
offer made on the same terms to holders of all outstanding preferred shares of
the 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 Cabot
Trust and the shares may be redeemed pro rata from the holders of record of the
shares in proportion to the number of the shares held or for which redemption
is requested by the holder, with adjustments to avoid redemption of fractional
shares, or by lot in a manner determined by Cabot Trust.
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
Cabot Trust. Each notice must state:
(1) the redemption date;
(2) the number of shares and series of the preferred shares to be redeemed;
(3) the redemption price;
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(4) the place or places where certificates for the 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 the
redemption date; and
(6) the date upon which the holder's conversion rights, if any, as to the
shares will terminate.
If fewer than all the preferred shares of any series are to be redeemed, the
notice mailed to each holder thereof must also specify the number of preferred
shares to be redeemed from each holder. If notice of redemption of any
preferred shares has been given and if the funds necessary for the redemption
have been set aside by Cabot Trust 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 the preferred shares, and all rights of
the holders of the 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 Cabot Trust, then, before any distribution or payment may be
made to the holders of any common shares or any other class or series of shares
of Cabot Trust ranking junior to the preferred shares in the distribution of
assets upon any liquidation, dissolution or winding up of Cabot Trust, the
holders of each series of preferred shares will be entitled to receive out of
assets of Cabot Trust legally available for distribution to shareholders
liquidating distributions in the amount of the liquidation preference per share
stated 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 the preferred
shares do not have a cumulative dividend). After payment of the full amount of
the liquidating distributions to which they are entitled, the holders of
preferred shares will have no right or claim to any of the remaining assets of
Cabot Trust. In the event that, upon the voluntary or involuntary liquidation,
dissolution or winding up, the available assets of Cabot Trust 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 shares of Cabot Trust ranking on a parity with the preferred shares
in the distribution of assets, then the holders of the preferred shares and all
other classes or series of shares will be entitled to share ratably in the
distribution of assets in proportion to the full liquidating distributions to
which they would otherwise be respectively entitled.
If liquidating distributions have been made in full to all holders of
preferred shares, the remaining assets of Cabot Trust will be distributed among
the holders of any other classes or series of 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 these purposes, the consolidation or merger of
Cabot Trust 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
Cabot Trust, will not be deemed to constitute a liquidation, dissolution or
winding up of Cabot Trust.
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 the series or any other series of preferred shares ranking
on a parity with the series of preferred shares with respect in each case to
the payment of dividends or 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 the series, voting together as a class with
the holders of any other series of Parity Shares (any other series, the "Voting
Preferred Shares"), will have the right to elect two
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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 the
series and the Voting Preferred Shares and at each subsequent annual meeting of
shareholders until all the dividends and dividends for the current quarterly
period on the preferred shares of the series and the other Voting Preferred
Shares have been paid or declared and set aside for payment. The voting rights
will terminate when all the 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 the voting rights.
The approval of two-thirds of the outstanding preferred shares of the 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 the series or the Voting Preferred Shares;
(2) enter into a share exchange that affects the preferred shares of the
series, consolidate with or merge into another entity, or permit
another entity to consolidate with or merge into Cabot Trust, unless
the preferred shares of the series remain outstanding without a
material and adverse change to their terms and rights or are 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 those of the preferred shares of the
series, except for changes that do not materially and adversely affect
the holders of the preferred shares of the series; or
(3) authorize, reclassify, create, or increase the authorized amount of any
class of shares having rights senior to the preferred shares of the
series with respect to the payment of dividends or amounts upon
liquidation, dissolution or winding up.
However, Cabot Trust may create additional classes of Parity Shares and series
of preferred shares ranking junior to the series of preferred shares with
respect in each case to the payment of dividends or 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 the
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 Cabot Trust or a sale of all or substantially all of
the assets of Cabot Trust.
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 the 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 Cabot Trust;
and
(3) the events requiring an adjustment of the conversion price, the manner
of determining any adjustment and provisions affecting conversion in
the event of the redemption of the 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
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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 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
Cabot Trust 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. Cabot Trust will
deposit preferred shares represented by depositary shares with a depositary
pursuant to a separate deposit agreement among Cabot Trust, 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. 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 Cabot Trust 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 the material anticipated provisions
thereof and are not complete statements of all of their provisions. For more
information 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 the holders,
subject to obligations of holders to file proofs, certificates and other
information and to pay 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 obligations of holders
to file proofs, certificates and other information and to pay 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 that have been converted or
exchanged into or for other securities.
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 exchanged into or for
other securities into Excess Shares or otherwise), the holders will be entitled
to delivery at the corporate trust office, or upon each 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 the
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 the
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 be withdrawn, the preferred shares depositary
will deliver to the holder at the same time a new depositary receipt evidencing
the excess number of depositary shares.
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Redemption of Depositary Shares
Whenever Cabot Trust 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 the series of
preferred shares so redeemed, provided that Cabot Trust 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 the series of
preferred shares. If Cabot Trust 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 Cabot Trust 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 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 the 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 the
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 the series of preferred shares
represented by the depositary shares in accordance with the instructions, and
Cabot Trust 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 vote made, as long as any 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 Cabot Trust 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
The depositary shares will not be convertible into common shares or any
other securities or property. See "Description of Common Shares--Restrictions
on Transfer."
Amendment and Termination of Deposit Agreements
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 Cabot Trust and the
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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 the
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
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 amendment becomes effective will be deemed, by continuing to
hold the depositary receipt, to consent and agree to the amendment and to be
bound by the applicable deposit agreement as amended.
Cabot Trust may terminate a deposit agreement upon not less than 30 days'
prior written notice to the preferred shares depositary if the termination is
necessary to preserve Cabot Trust'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. Cabot Trust 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) Cabot Trust has redeemed all outstanding depositary shares;
(2) a final distribution has been made on each series of preferred
shares in connection with Cabot Trust's liquidation, dissolution or
winding up and the distribution has been distributed to the holders
of the depositary receipts evidencing the depositary shares
representing the series of preferred shares; or
(3) each related preferred share has been converted into a security of
Cabot Trust which is not represented by depositary shares.
Charges of Preferred Shares Depositary
Cabot Trust will pay all transfer and other taxes and governmental charges
arising solely from the existence of the deposit agreement. In addition, Cabot
Trust 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 Cabot
Trust notice of its election to do so, and Cabot Trust may at any time remove
the preferred shares depositary, any 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 Cabot Trust which are received by
the preferred shares depositary with respect to the related preferred shares.
Cabot Trust 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. Cabot Trust'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). Cabot Trust 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. Cabot Trust 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 Cabot Trust
believes in good faith to be competent to give the 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
Cabot Trust, on the other hand, the preferred shares depositary will be
entitled to act on the claims, requests or instructions received from Cabot
Trust.
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 securities
described in this prospectus that are offered pursuant to any prospectus
supplement and the warrants may be attached to or may be transferable
separately from the other securities being offered. 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 Cabot Trust's agent in connection with the warrants of
the 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 Cabot Trust
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 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 Cabot Trust'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.
DESCRIPTION OF SECURITYHOLDER PURCHASE RIGHTS
As set forth under "Plan of Distribution" below, Cabot Trust may sell the
securities described in this prospectus directly through securityholder
purchase rights. If securities are to be sold through securityholder purchase
rights, the securityholder purchase rights will be distributed as a dividend to
securityholders of Cabot Trust or Cabot L.P., for which the securityholders
will not be required to pay any separate consideration. The prospectus
supplement relating to any offer by Cabot Trust of 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 the securities to
be offered pursuant to the securityholder purchase rights;
(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.
SELECTED PROVISIONS OF MARYLAND LAW AND OF
CABOT TRUST'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 material. 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 filed with the SEC 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 Cabot Trust may be established by a majority of the entire Board of Trustees
but may not be fewer than three nor more than fifteen. There are currently
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 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. If 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) may elect that number of
Independent Trustees necessary to cause the Board to include a majority of
Independent Trustees.
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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.
Cabot Trust believes that classification of the Board of Trustees in this
manner helps to assure the continuity and stability of Cabot Trust'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
Cabot Trust, even though such an attempt might be considered by some or many
shareholders to be beneficial to Cabot Trust 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 their removal.
Business Combinations
Under Maryland law, "business combinations" between a Maryland real estate
investment trust and an interested shareholder or an affiliate of an interested
shareholder are prohibited for five years after the most recent date on which
the interested shareholder becomes an interested shareholder. These business
combinations include a merger, consolidation, share exchange, or, in
circumstances specified in the statute, an asset transfer or issuance or
reclassification of equity securities. An interested shareholder is defined as:
. 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 shares of the trust.
After the five-year prohibition, any business combination between the trust and
an interested shareholder generally must be recommended by the board of
trustees of the trust and approved by the affirmative vote of at least:
. 80% of the votes entitled to be cast by holders of outstanding shares
of voting shares of the trust; and
. 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 single voting group.
These super-majority vote requirements do not apply if the trust's common
shareholders receive a minimum price, as defined under Maryland law, for their
shares in the form of cash or other consideration in the same form as
previously paid by the interested shareholder for its shares. None of these
provisions of the Maryland law will 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.
The business combination statute may discourage others from trying to
acquire control of us and increase the difficulty of consummating any offer.
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Control Share Acquisitions
Maryland law provides that "control shares" of a Maryland real estate
investment trust acquired in a "control share acquisition" have no voting
rights except to the extent approved by a vote of two-thirds of the votes
entitled to be cast on the matter. Shares owned by the acquiror, by officers or
by trustees who are employees of the trust are excluded from shares entitled to
vote on the matter. As permitted by Maryland law, we have elected in our By-
laws that the control share provisions of Maryland law will not apply to
transactions involving Cabot Trust, but the Board of Trustees retains the
discretion to change this election in the future.
"Control shares" are voting shares which, if aggregated with all other
shares owned by the acquiror or shares for which the acquiror is able to
exercise or direct the exercise of voting power except solely by virtue of a
revocable proxy, would entitle the acquiror to exercise voting power in
electing trustees within one of the following ranges of voting power:
. one-fifth or more but less than one-third;
. one-third or more but less than a majority; or
. 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. Except
as otherwise specified in the statute, a "control share acquisition" means the
acquisition of control shares.
Once a person who has made or proposes to make a control share acquisition
has undertaken to pay expenses and satisfied other conditions, the person may
compel the board of trustees 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 the conditions and limitations in the statute, the trust may
redeem any or all of the control shares for fair value, except for control
shares for which voting rights previously have been approved. Fair value is
determined without regard to the absence of voting rights for control shares,
as of the date of the last control share acquisition or of any meeting of
shareholders at which the voting rights of control shares are considered and
not approved. If voting rights for control shares are approved at a
shareholders meeting and the acquiror 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 these
appraisal rights may not be less than the highest price per share paid in the
control share acquisition. Some of the limitations and restrictions otherwise
applicable to the exercise of dissenters' rights do not apply in the context of
a control share acquisition.
The control share acquisition statute does not apply to shares acquired in a
merger, consolidation or share exchange if the trust is a party to the
transaction or to acquisitions approved or exempted by the charter or bylaws of
the trust.
Amendment of Declaration of Trust
The Trustees, by a two-thirds vote, may amend the provisions of the
Declaration of Trust, without shareholder approval, to qualify Cabot Trust 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 Cabot Trust has the authority to issue. Otherwise, Cabot Trust's
Declaration of Trust generally may be amended only by the affirmative vote or
written consent of the holders of at least a majority of the outstanding Shares
then entitled to vote. Subject to the provisions of any class or series of
shares then outstanding, the shareholders are only entitled to vote with
respect to amendments to the Declaration of Trust and:
. 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);
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. 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);
. 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);
. our termination (which requires the affirmative vote of two-thirds of
our outstanding shares); and
. matters submitted to the shareholders at the direction of the Board
of Trustees.
Termination of Cabot Trust and REIT Status
The Declaration of Trust permits the termination of Cabot Trust and the
discontinuation of its operations by the affirmative vote or written consent of
the holders of not less than two-thirds of Cabot Trust's outstanding shares of
all classes. The Declaration of Trust also permits the termination of Cabot
Trust's qualification as a REIT if qualification as a REIT, in the opinion of
the Board of Trustees, is no longer advantageous to Cabot Trust's 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:
. pursuant to Cabot Trust's notice of the meeting;
. by or at the direction of the Board of Trustees; or
. by a shareholder who was a shareholder of record at the time of
giving advance notice of the 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 Cabot Trust's notice of meeting
may be brought before the meeting of shareholders.
Anti-takeover Effect of Selected Provisions of Maryland Law and of the
Declaration of Trust and Bylaws
The business combination provisions of Maryland law, 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 Cabot Trust 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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CABOT L.P. PARTNERSHIP AGREEMENT
Partnership Structure
As the general partner of Cabot L.P., Cabot Trust has the exclusive power
under Cabot L.P.'s limited partnership agreement to manage and conduct the
business of Cabot L.P. The Board of Trustees of Cabot Trust manages the affairs
of Cabot Trust by directing the affairs of Cabot L.P. Cabot L.P. is responsible
for, and pays when due, its share of all administrative and operating expenses
of the properties. Cabot Trust's interest in Cabot L.P. entitles it to share in
cash distributions from, and in the profits and losses of, Cabot L.P. in
proportion to Cabot Trust's percentage ownership of Cabot L.P., apart from tax
allocations of profits and losses to take into account pre-contribution
property appreciation. Cabot L.P.'s limited partners own the economic interest
in Cabot L.P. not held by Cabot Trust.
Cabot Trust holds one partnership unit in Cabot L.P. for each common share
that it has issued. The net proceeds from issuances of common shares are
contributed by Cabot Trust to Cabot L.P. in exchange for an equivalent number
of partnership units.
The following paragraphs summarize what Cabot L.P. believes to be the
material provisions of the partnership agreement. For a complete statement of
all of its provisions, you should refer to the partnership agreement, which is
described herein under the heading "Where You Can Find More Information."
Management
Cabot L.P. has been organized as a Delaware limited partnership pursuant to
the terms of the partnership agreement. Cabot Trust, as the sole general
partner of Cabot L.P., generally has full, exclusive and complete discretion in
managing and controlling Cabot L.P. The limited partners of Cabot L.P. have no
authority to transact business for, or to participate in the management
activities or decisions of, Cabot L.P., except as provided in the 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 Cabot L.P., except as otherwise provided in
the partnership agreement;
(2) possess Cabot L.P. property, or assign any rights to specific Cabot
L.P. property for other than an Cabot L.P. purpose, except as
otherwise provided in the partnership agreement;
(3) admit a person as a partner, except as otherwise provided in the
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 partnership agreement or under Delaware
law.
Indemnification
The 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 Cabot
L.P. or a trustee or officer of Cabot Trust or any other person as Cabot Trust
may designate from time to time in its sole and absolute discretion (each, an
"Indemnitee") will be indemnified and held harmless by Cabot L.P. for any act
relating to the operation of Cabot L.P. 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
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.
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The 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 partnership agreement, create a rebuttable
presumption that the individual acted in a manner contrary to that specified
above. Any indemnification so made may only be made out of the assets of Cabot
L.P.
Capital Contributions
When Cabot Trust contributes additional capital to Cabot L.P. from the
proceeds of common shares or preferred shares issued by Cabot Trust, its
interest in Cabot L.P. 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 partnership agreement, Cabot Trust is the tax matters
partner of Cabot L.P. and has authority to make tax related decisions and tax
elections under the Code on behalf of Cabot L.P.
Operations
The partnership agreement allows Cabot Trust to operate Cabot L.P. in a
manner that enables Cabot Trust to satisfy the requirements for being
classified as a REIT. The partnership agreement also requires the distribution
of cash available for distribution of Cabot L.P. quarterly on a basis in
accordance with the partnership agreement.
Duties and Conflicts
The partnership agreement provides that Cabot Trust is not permitted to
enter into or conduct any business other than in connection with its
ownership, acquisition and disposition of partnership interests in Cabot L.P.
and the management of the business and incidental activities of Cabot L.P.
Therefore, all activities pertaining to the acquisition, development,
management and operation of any properties, must be conducted through Cabot
L.P.
Term
Cabot L.P. will continue in full force and effect until December 31, 2097
or until sooner dissolved upon:
(1) the withdrawal of Cabot Trust as a general partner (unless all of
the limited partners elect to continue Cabot L.P.);
(2) by the election of Cabot Trust, with the consent of a majority in
interest of Limited Partners;
(3) in connection with a merger or other combination of Cabot L.P.;
(4) by the sale or other disposition of all or substantially all of the
assets of Cabot L.P.;
(5) entry of a decree of judicial dissolution of Cabot L.P.; or
(6) bankruptcy or insolvency of Cabot Trust.
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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 Federal Income
Tax Code of 1986 (the "Code"). We can give no assurance, however, that the
requirements will be met. The following summarizes the federal income tax
considerations for Cabot Trust 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 Cabot Trust 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 this qualification. Their opinion is based on assumptions relating to the
organization and operation of Cabot Trust, Cabot L.P. and Cabot Advisors. These
assumptions include: (1) that the Formation Transactions were consummated in
accordance with the operative documents therefor, (2) that the documents
accurately reflect the material facts of the transactions, (3) that Cabot
Trust, Cabot L.P. and Cabot Advisors 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
the documents will be complied with by all parties involved. Their opinion is
also conditioned upon representations made to them in reference to factual
matters relating to our organization. In addition, this opinion is based on the
law existing and in effect on this date. 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. Our
qualification and taxation as a REIT will depend on compliance with the 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 the 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 that its
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, the entity remains subject to tax in some 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 Cabot
Trust--General" and "--Taxation of Cabot Trust--Failure to Qualify."
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 some types of shareholders, such as insurance companies,
tax-exempt entities, financial institutions, broker-dealers, foreign
corporations and persons who are not citizens or residents of the United
States, that may be subject to special treatment under the federal income tax
laws.
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Taxation of Cabot Trust
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 our undistributed long-term
capital gain in income. However, they receive a credit for their share of any
taxes paid on the gain by Cabot Trust.
Notwithstanding our qualification as a REIT, we may also be subject to
taxation in some 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 some other requirements are met), we will be
subject to a 100% tax on the greater of the amount by which we fail either the
75% or the 95% test, multiplied by a fraction intended to reflect our
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 the
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 the year, (2) 95% of our REIT capital gain
net income for the year and (3) any undistributed taxable income from prior
years, we would be subject to a 4% excise tax on the excess of the 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, the 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 situations not presently contemplated. Cabot Advisors 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 by a 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 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 common
shares may be owned, directly or indirectly and including the effects of
constructive ownership rules, by five or fewer individuals, which for this
purpose includes tax-exempt entities. However, for purposes of this test, any
common shares 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 the trust rather than by the trust. These share ownership
requirements need not be met until the second taxable year of Cabot Trust 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 comply with the foregoing share ownership tests, we have placed
restrictions on the ownership and transfer of common shares. 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 common
shares and the 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 the shares of beneficial interest (as prescribed by Treasury regulations). A
list of those persons failing or refusing to comply with the 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 other
information. In addition, our Declaration of Trust provides restrictions
regarding the ownership and
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transfer of our common shares 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 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 Stock Test at the close of each
quarter of our taxable years ended 1998 and afterwards. Where we invest in a
partnership (such as Cabot L.P.), 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 Our Investments
in Partnerships--General." Accordingly, our investment in the properties
through our interest in Cabot L.P. is intended to constitute an investment in
qualified assets for purposes of the 75% asset test.
Cabot L.P. owns 100% of the non-voting preferred stock of Cabot Advisors. By
virtue of our partnership interest in Cabot L.P., we are deemed to own
initially a pro rata share of the non-voting preferred stock. Because Cabot
L.P. owns none of the voting common stock of Cabot Advisors, and because the
non-voting preferred stock's approval right is limited to some 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 Cabot
Advisors owned by Cabot L.P. relative to the estimated value of the total
assets owned by Cabot L.P., we believe that our pro rata share of the stock of
Cabot Advisors held by Cabot L.P. 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 the effect with respect to the value of the stock and
assets.
The Value Test must be satisfied at the end of any quarter in which we
increase our interest in Cabot Advisors or acquire other property. If any
Limited Partner exercises its conversion option to exchange partnership units
for common shares, we will thereby increase our proportionate (indirect)
ownership interest in Cabot Advisors. This will require us to meet the Value
Test in any quarter in which the conversion option is exercised. A similar
result will follow in the case of any exchange of partnership units by
employees of Cabot L.P. or Cabot Advisors 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 the steps will always be successful and will not require a
reduction in Cabot L.P.'s overall interest in Cabot Advisors.
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 Our 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;
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(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 the 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
the 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 us owns, directly or constructively 10% or more of the 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, the 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 the services do not
exceed 1% of all amounts received or accrued, directly or indirectly, by us
during the taxable year with respect to the 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. Cabot L.P. provides services at the properties that it owns and may
provide the services at any newly acquired properties of it. We believe that
for purposes of the 75% and 95% gross income tests, the services provided at
the properties (and any other services and amenities provided by Cabot L.P. 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 Cabot L.P., Cabot Advisors
or other agents. We anticipate that the dividend income on our indirect
investment in Cabot Advisors will not cause us to fail the 75% gross income
test.
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%
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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
the property for at least four years, and some 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 Cabot Trust--
General" and "--Tax Aspects of Our 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 Cabot L.P. 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 Cabot L.P., 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 the year if we are
entitled to relief under 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 Cabot Trust's net
capital gain) and (y) 95% of the net income (after tax), if any,
from foreclosure property, minus
(2) the sum of items of non-cash income.
We must pay the 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 the 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 we have and will
satisfy these distribution requirements for our taxable years ended 1998 and
afterwards. In this regard, the partnership agreement authorizes us in our
capacity as general partner to take the steps as may be necessary to cause
Cabot L.P. 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
the income and deduction of the expense (in computing our REIT taxable income)
on the other hand. Additionally, this may be due to Cabot L.P.'s inability to
control cash distributions (relating to any properties over which it does not
have decision making control), or
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for other reasons. We will closely monitor the relationship between our REIT
taxable income and cash flow and, if necessary, borrow funds (or cause Cabot
L.P. or other affiliates to borrow funds) to satisfy the distribution
requirement. However, we cannot assure that the borrowing would be available at
the 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 this event, to the extent of
current and accumulated earnings and profits, all distributions to shareholders
will be taxable as ordinary income and subject to 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 Cabot L.P. 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
Us--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).
Cabot L.P.'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 Cabot L.P. Accordingly, any increase in our
REIT taxable income from our interest in Cabot L.P., whether or not a
corresponding cash distribution is also received from Cabot L.P., will increase
our distribution requirements (see "--Taxation of Us--Annual Distribution
Requirements"). However, this will not be subject to federal income tax in our
hands provided that we distribute an amount equal to the income to our
shareholders. Moreover, for purposes of the REIT asset tests (see "--Taxation
of Us--Asset Tests"), we will include our proportionate share of assets held by
Cabot L.P.
Entity Classification. Based on our representations that Cabot L.P. will
satisfy the 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, Cabot L.P. will be treated for
federal income tax purposes as a partnership, and not as an association taxable
as a corporation. The 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 some 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
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the 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 the property at the time of
contribution (a "Book-Tax Difference"). The 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 Cabot L.P. included
contributions of appreciated property (including some of the properties or
interests therein). Consequently, the partnership agreement requires some
allocations to be made in a manner consistent with Section 704(c) of the Tax
Code.
In general, some of the limited partners of Cabot L.P. as contributors of
some 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 Cabot L.P. on the contributed assets (including the properties).
This will tend to eliminate the Book-Tax Difference over the life of Cabot L.P.
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 some 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. Those determinations could have differing timing and other effects
on us.
Properties acquired by Cabot L.P. 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 these cases.
Sale of Properties. Our share of any gain realized by Cabot L.P. 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 Us--
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
Cabot L.P. 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 the 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 the shareholders as ordinary dividend income and
will not be eligible for the dividends received deduction for corporations.
Distributions of net capital gain that we designate as capital gain dividends
will be taxed to the 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, the
distributions will be treated first as a tax-free return of capital to you,
reducing the tax basis of your common shares by the amount of the excess
distribution (but not below zero), with distributions in excess of your tax
basis being taxed as capital gains if your common shares are held by you 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 of the three months, must be
treated as both paid by us and received by the shareholder on December 31 of
the year as long as we actually pay the dividend during January of the
following calendar year. You may not
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include our net operating losses in your individual income tax returns. Federal
income tax rules may also require that minimum tax adjustments and preferences
be apportioned to you.
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, you must include in
income your proportionate share of our undistributed capital gain for the
taxable year. You also will be deemed to have paid your proportionate share of
the income tax we pay with respect to the undistributed capital gain. The tax
would be credited against your tax liability and subject to normal refund
procedures. In addition, your basis in your shares would be increased by the
amount of undistributed capital gain (less the tax we paid) included in your
income.
The Internal Revenue Service Restructuring and Reform Act of 1998 provides
that gain from the sale or exchange of some 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 the common shares for six months or less (after
applying holding period rules) will be treated as a long-term capital loss, to
the extent distributions from Cabot Trust were required to be treated by the
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 the shareholder is a corporation
or comes within some 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 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 the 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 the 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 the REIT.
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We do not believe we are currently a pension-held REIT. However, pension
funds hold significant amounts of partnership units, which may, subject to some
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
partnership 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 those 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 common shares are held by foreign persons such as 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 the gain is effectively
connected with the person's United States trade or business or, in the case of
an individual foreign person, the 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 the 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, 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 tax
liability.
Other Tax Considerations
Cabot Advisors. The income of Cabot Advisors will be subject to federal and
state income tax at full corporate rates. Cabot Advisors cannot claim a
deduction for the dividends it pays to its shareholders, including Cabot L.P.
To the extent that Cabot Advisors 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. Cabot Advisors will
attempt to minimize the amount of the 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 us
may be modified by legislative, judicial or administrative action at any time
and that the 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 Cabot Trust.
53
<PAGE>
State and Local Taxes. We and our shareholders may be subject to state or
local taxation. We and Cabot L.P. 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 us
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 of the securities described in this prospectus,
including the federal, state, local, foreign and other tax consequences of the
purchase, ownership, sale and election and of potential changes in applicable
tax laws.
54
<PAGE>
PLAN OF DISTRIBUTION
Cabot Trust and Cabot L.P. may offer and sell the securities described in
this prospectus to one or more underwriters for public offering and sale by the
underwriters or they may offer and sell the securities to investors directly or
through agents. Cabot Trust or Cabot L.P. may also offer and sell the
securities to existing securityholders of either of them through distributions,
without consideration, of rights to purchase the securities. The rights, if
distributed, may, but will not necessarily, be transferable in accordance with
the terms as Cabot Trust or Cabot L.P. may determine. See "Description of
Securityholder Purchase Rights." Any underwriter or agent involved in the offer
and sale of the securities will be named in the applicable prospectus
supplement.
The distribution of the securities described in this prospectus 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 securities may also be offered in
exchange for one or more of the classes of outstanding securities of
Cabot Trust or Cabot L.P. Cabot Trust and Cabot L.P. may, from time to time,
authorize underwriters acting as their agents to offer and sell the securities
upon the terms and conditions set forth in the applicable prospectus
supplement. In connection with the sale of securities, underwriters may receive
compensation from Cabot Trust or Cabot L.P. in the form of underwriting
discounts or commissions and may also receive commissions from purchasers of
the securities for whom they may act as agent. Underwriters may sell the
securities to or through dealers, and the 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 Cabot Trust and Cabot L.P. to
underwriters or agents in connection with the offering of securities pursuant
to this prospectus, 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 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
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 Cabot Trust and Cabot L.P., to indemnification
against and contribution toward civil liabilities, including liabilities under
the Securities Act.
If so indicated in the applicable prospectus supplement, Cabot Trust and
Cabot L.P. will authorize dealers acting as their agents to solicit offers by
institutions to purchase securities from Cabot Trust and Cabot L.P. at the
public offering price set forth in the prospectus supplement pursuant to
delayed delivery contracts providing for payment and delivery on the date or
dates stated in the prospectus supplement. Each delayed delivery contract will
be for an amount not less than, and the aggregate principal amount of the
securities sold pursuant to the contracts will be not less nor more than, the
respective amounts stated in the applicable prospectus supplement. Institutions
with whom delayed delivery 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 Cabot Trust and Cabot L.P.
Delayed delivery contracts will not be subject to any conditions except that
the purchase by an institution of the securities covered by its contracts will
not at the time of delivery be prohibited under the laws of any jurisdiction in
the United States to which the institution is subject, and if the securities
are being sold to underwriters, Cabot Trust and Cabot L.P. must have sold to
the underwriters the total principal amount of the securities less the
principal amount thereof covered by the contracts.
Some of the underwriters and their affiliates engage in transactions with or
perform services for Cabot Trust and Cabot L.P. in the ordinary course of
business.
55
<PAGE>
LEGAL MATTERS
The validity of securities offered pursuant to this prospectus will be
passed upon for Cabot Trust and Cabot L.P. 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 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.
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 said 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. The financial
statements and related schedule have been incorporated by reference herein in
reliance upon the 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, have been incorporated by reference in this prospectus from
the registration statement of Cabot Industrial Trust on Form S-11 (No. 333-
61543) 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, have been incorporated by reference in this
prospectus from the registration statement of Cabot Industrial Trust on Form S-
11 (No. 333-61543) 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 Cabot L.P. are offered.]
56
<PAGE>
INFORMATION CONCERNING CABOT L.P.
Substantially all of Cabot Trust's assets and interests in industrial
properties and other assets are held by, and substantially all of its
operations are conducted through, Cabot L.P. Accordingly, the business of Cabot
L.P., the properties owned by Cabot L.P. and the management of Cabot L.P. and
their compensation are substantially the same as those included in "Item 1.
Business," "Item 2. Properties," "Item 7A. Quantitative and Qualitative
Disclosures about Market Risk," "Item 10. Directors and Executive Officers of
the Registrant," and "Item 11. Executive Compensation" in Cabot Trust's Annual
Report on Form 10-K for the year ended December 31, 1998, which Form 10-K has
been incorporated by reference into this prospectus.
57
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Introduction
The following discussions should be read in conjunction with the financial
statements and notes appearing herein. Cabot L.P. 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. Cabot
L.P. owns and operates a diversified portfolio of bulk distribution,
multitenant distribution and "workspace" (light industrial, research, back
office and combination office/warehouse) properties throughout the United
States. At December 31, 1998, Cabot L.P. owned 206 industrial properties, 121
of which properties were acquired in connection with the Formation Transactions
described in Notes 1 and 3 to the consolidated financial statements herein, and
84 of which properties were acquired during the period from February 4, 1998
through December 31, 1998 (21 of the 84 properties were identified in the
prospectus for Cabot Trust's initial public offering dated January 30, 1998).
In addition, Cabot L.P. placed one property included within its development
program into service in 1998. Cabot L.P. was formed on October 10, 1997, but
did not begin operations as a fully integrated real estate company until the
completion of the Formation Transactions and Offerings on February 4, 1998, the
closing date of Cabot Trust's initial public offering. Cabot L.P. had no
operations prior to February 4, 1998.
Results of Operations
Since Cabot L.P. was formed in October 1997 and did not begin operations
until February 4, 1998, the results for the year ended December 31, 1998
represent activity for 331 days (approximately 11 months) only, and no
comparison of results to prior periods are available.
Year Ended December 31, 1998
Net income attributable to partnership unitholders for the year ended
December 31, 1998 totaled $51.0 million, or $1.17 per basic and diluted unit.
Rental revenues for the year ended December 31, 1998 were $102.4 million,
including tenant reimbursements of $13.4 million. Total rental revenue of $74.4
million was generated by the 121 properties still owned as of December 31,
1998, which were also owned as of February 4, 1998, as a result of the
Formation Transactions (the "Baseline Properties"), $27.1 million of rental
revenue was generated by the 84 properties acquired subsequent to February 4,
1998, and the development property placed into service in 1998 and the
remaining $864,000 of rental revenue relates to a property that was sold by
Cabot L.P. during 1998. The ratio of tenant reimbursements to operating and
real estate tax expenses was approximately 73%. Depreciation and amortization
related to real estate investments totaled $20.9 million for the year ended
December 31, 1998.
Interest and other income included $231,000 of earnings from Cabot Advisors.
The remainder of such income consists primarily of interest income earned on
Cabot L.P.'s invested cash balances. Interest expense represents $1.8 million
of interest incurred on $48.2 million of mortgage indebtedness outstanding and
also includes interest expense of $5.2 million related to borrowings under the
Acquisition Facility, net of amounts capitalized to development projects.
Capital Resources and Liquidity
As a result of the completion of the Offerings in February 1998, Cabot Trust
issued 8,625,000 Common Shares to the public and 1,000,000 Common Shares in a
private placement of shares. All of the Common Shares were sold at a price of
$20.00 per share. The proceeds from the Offerings, net of offering costs, were
$176.3 million and were contributed to Cabot L.P.
58
<PAGE>
Cabot L.P. 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. Cabot L.P. may also consider preferred and common equity financing
when such financing is available on attractive terms.
In March 1998, Cabot L.P. executed the Acquisition Facility, which is a $325
million unsecured revolving line of credit, with Morgan Guaranty Trust Company
of New York as lead agent to a syndicate of banks. The Acquisition Facility is
used to fund property acquisitions, development activities, building
expansions, tenant leasing costs and other general corporate purposes. The
Acquisition Facility contains certain restrictions and requirements such as
total debt-to-assets, debt service coverage, minimum unencumbered assets to
unsecured debt ratios and other limitations. Cabot L.P. 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, as of March 8, 1999, Cabot L.P. has
purchased approximately $5.4 million of real estate assets in 1999 and has
commitments to purchase $71.2 million of additional real estate assets. The
completed real estate assets acquisitions were primarily funded through
Acquisition Facility borrowings.
As of December 31, 1998, Cabot L.P. had $48.2 million of fixed rate debt
secured by properties, $200.0 million of unsecured variable rate borrowings
under its Acquisition Facility and a 22% debt-to-total market capitalization
ratio. The debt-to-total market capitalization ratio is calculated based on
Cabot L.P.'s total consolidated debt as a percentage of the market value of
outstanding Units of Cabot L.P. (which is based on the market price of the
Common Shares of Cabot Trust into which the Units are convertible), plus total
debt. In addition, in February 1999, Cabot L.P. borrowed $87.6 million, secured
by properties, the proceeds of which borrowing were used to repay a portion of
the outstanding balance under the Acquisition Facility.
Cabot L.P. entered into an interest rate collar arrangement relating to its
LIBOR-based Acquisition Facility for a notional amount of $140 million for the
period January 1, 1999, through February 15, 1999. The arrangement is intended
to result in limiting the variable LIBOR component of Cabot L.P.'s interest
cost on an equivalent amount of borrowings to the range of 5.05% to 6.25% per
annum. Cabot L.P. has also entered into an interest rate hedge transaction
involving the future sale of $100 million of Treasury Securities based on a
rate of approximately 5.54% for such securities in anticipation of a future
debt issuance of at least $100 million with a maturity of 10 years. Based on
the rate for 10-year Treasury Securities as of close of business on March 8,
1999, the hedge transaction would be settled by Cabot L.P. paying $2.1 million,
which would have the effect of increasing Cabot L.P.'s borrowing rate on $100
million of anticipated borrowings by approximately 0.2%. If an offering of the
size and maturity contemplated is not completed by the time of, or shortly
after, the March 31, 1999 settlement date of the hedge transaction, or if for
any other reason the transaction is determined no longer to qualify for hedge
accounting treatment, Cabot L.P. would be required to record an expense equal
to the fair value of the instrument (or the remaining unmatched portion
thereof) as of the earlier of the termination date of the instrument or the
date of such determination. As of March 8, 1999, the fair value of the
instrument and, accordingly, the expense that Cabot L.P. would have been
required to record was $2.1 million. Such amount changes, in amounts that may
be material, as the market price and the related yield (5.261% at March 8,
1999) on 10-year Treasury Securities varies.
Cash and cash equivalents totaled $2.3 million at December 31, 1998. This
was the result of $78.7 million of cash generated from operating activities and
$322.4 million provided by financing activities, reduced by $398.8 million used
for investing activities.
Year 2000
Cabot L.P. has assessed its Year 2000 readiness with respect to its internal
accounting and information systems. Cabot L.P. also has contacted its
significant vendors, including banks and software providers, to
59
<PAGE>
determine whether those vendors are satisfactorily addressing the Year 2000
problem with respect to the products and services they provide to Cabot L.P. No
significant issues or costs of remediation have been identified with respect to
such systems or vendors. Cabot L.P. has also completed its review of its other
internal systems (consisting primarily of property-related systems, such as
elevators and heating, ventilation, and air conditioning systems) and has
developed a Year 2000 remedial plan to address issues identified in such
review, none of which are considered by Cabot L.P. to be material. Remediation
costs to date have not been material, and Cabot L.P. does not expect any
significant issues or remediation costs as a result of completion of its
remedial plan due to the relatively uncomplicated nature of its real estate
assets (industrial properties) and the general nature of its leases, which in
many instances provide for the reimbursement of costs from its tenants. Cabot
L.P. 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 Cabot L.P.'s internal systems and significant vendors. Cabot L.P. further
believes that adequate alternative service providers will be available to it if
any of its vendors experience unexpected difficulties as a result of Year 2000
systems failures and, accordingly, has not established any specific contingency
plans in this regard. It is not possible to quantify any potential indirect
effects that may result from the lack of Year 2000 readiness on the part of
third parties, including tenants, with whom Cabot L.P. conducts its business.
Inflation
Substantially all of the leases of the Cabot L.P. properties require the
tenant to pay, as additional rent, either all real estate taxes and operating
expenses or all increases in real estate taxes and operating expenses over a
base amount. In addition, many of such leases provide for fixed or indexed
increases (based on the consumer price index or other measures) in base rent.
Management believes that inflationary increases in operating expenses will be
off-set, in part, by these expense reimbursements and contractual rent
increases.
60
<PAGE>
INDEX TO FINANCIAL STATEMENTS
CABOT INDUSTRIAL PROPERTIES, L.P.
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Public Accountants................................. F-2
Consolidated Balance Sheet as of December 31, 1998 and 1997.............. F-3
Consolidated Statement of Operations for the year ended December 31,
1998.................................................................... F-4
Consolidated Statement of Partners' Equity for the year ended December
31, 1998................................................................ F-5
Consolidated Statement of Cash Flows for the year ended December 31,
1998.................................................................... F-6
Notes to Consolidated Financial Statements............................... F-7
Schedule III--Real Estate and Accumulated Depreciation................... F-18
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of
Cabot Industrial Properties, L.P.:
We have audited the accompanying consolidated balance sheet of Cabot
Industrial Properties, L.P. and subsidiaries (Cabot L.P.), a Delaware Limited
Partnership, as of December 31, 1998 and 1997, and the related consolidated
statements of operations, partners' equity, and cash flows for the year ended
December 31, 1998 (Note 1). These financial statements are the responsibility
of Cabot L.P.'s management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Cabot L.P.
as of December 31, 1998 and 1997, and the results of their operations and their
cash flows for the year ended December 31, 1998, in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index to the
financial statements is presented for purposes of complying with the Securities
and Exchange Commission's rules and is not a required part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 9, 1999
(except with respect to the matters
discussed in Note 13, as to which
the date is March 8, 1999).
F-2
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
CONSOLIDATED BALANCE SHEET
(in thousands)
<TABLE>
<CAPTION>
As of December 31,
----------------------
1998 1997
----------- ---------
<S> <C> <C>
ASSETS:
INVESTMENT IN REAL ESTATE:
Land....................................................... $ 199,145 $ --
Buildings.................................................. 873,530 --
Less: Accumulated Depreciation............................. (17,290) --
----------- -------
Net Rental Properties.................................... $ 1,055,385 --
Properties under Development............................... 23,108 --
----------- -------
$ 1,078,493 $ --
----------- -------
OTHER ASSETS:
Cash and Cash Equivalents.................................. $ 2,301 $ 1
Rents and Other Receivables,
net of reserve for uncollectible accounts of $312......... 2,872 --
Deferred Rent Receivable................................... 2,638 --
Deferred Lease Acquisition Costs, Net...................... 17,362 --
Deferred Financing Costs, Net.............................. 1,255 --
Investment in and Advances to Related Party................ 582 --
Other Assets............................................... 5,067 3,480
----------- -------
TOTAL ASSETS............................................... $ 1,110,570 $ 3,481
=========== =======
LIABILITIES AND PARTNERS' EQUITY:
LIABILITIES:
Mortgage Debt.............................................. $ 48,206 $ --
Line of Credit Borrowings.................................. 200,000 --
Accounts Payable........................................... 511 2,255
Accrued Real Estate Taxes.................................. 7,309 --
Distributions Payable...................................... 14,134 --
Due to Related Party....................................... -- 1,225
Tenant Security Deposits and Prepaid Rents................. 4,956 --
Other Liabilities.......................................... 18,156 --
----------- -------
$ 293,272 $ 3,480
----------- -------
COMMITMENTS AND CONTINGENCIES (Note 11)
PARTNERS' EQUITY:
General Partner's Equity................................... $ 348,987 $ 1
Limited Partners' Equity................................... 468,311 --
TOTAL PARTNERS' EQUITY..................................... $ 817,298 $ 1
----------- -------
TOTAL LIABILITIES AND PARTNERS' EQUITY..................... $ 1,110,570 $ 3,481
=========== =======
</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 unit and per unit data)
<TABLE>
<CAPTION>
For the Year Ended
December 31, 1998
(see Note 1)
------------------
<S> <C>
REVENUES:
Rental Income................................................ $ 89,044
Tenant Reimbursements........................................ 13,381
-----------
$ 102,425
-----------
EXPENSES:
Property Operating........................................... $ 6,579
Property Taxes............................................... 11,843
Depreciation and Amortization................................ 20,913
General and Administrative................................... 6,815
Interest..................................................... 7,009
-----------
Total Expenses........................................... $ 53,159
-----------
Gain on Sale of Real Estate.................................. $ 572
Interest and Other Income.................................... 1,120
-----------
Net Income................................................... $ 50,958
===========
Earnings per Unit:
Basic...................................................... $ 1.17
===========
Diluted.................................................... $ 1.17
===========
Weighted Average Units:
Basic...................................................... 43,493,198
===========
Diluted.................................................... 43,586,876
===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-4
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
CONSOLIDATED STATEMENT OF PARTNERS' EQUITY
(in thousands, except unit and per unit data)
<TABLE>
<CAPTION>
Total
Partnership General Limited Partners'
Units Partner Partners Equity
----------- -------- -------- ---------
<S> <C> <C> <C> <C>
Balance, December 31, 1997......... 50 $ 1 $ -- $ 1
Issuance of Units.................. 43,576,149 349,302 469,965 819,267
Repurchase of Units................ (85,727) (205) (1,513) (1,718)
Net income......................... -- 21,766 29,192 50,958
Distributions ($1.177 per unit).... -- (21,877) (29,333) (51,210)
---------- -------- -------- --------
Balance, December 31, 1998......... 43,490,472 $348,987 $468,311 $817,298
========== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-5
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
For the Year Ended
December 31, 1998
(see Note 1)
------------------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income................................................. $ 50,958
Adjustments to reconcile net income to cash provided by op-
erating activities:
Depreciation and Amortization............................ 20,913
Straight Line Rent....................................... (2,638)
Amortization of Deferred Financing Costs................. 466
Company's Share of Net Income of Cabot Advisors.......... (231)
Gain on Sale of Real Estate.............................. (572)
Increase in Rents and Other Receivables.................. (2,872)
Increase in Accounts Payable............................. 406
Increase in Other Assets................................. (2,877)
Increase in Accrued Real Estate Taxes.................... 7,309
Increase in Tenant Security Deposits and Prepaid Rents... 4,956
Increase in Other Liabilities............................ 2,908
---------
Net Cash Provided by Operating Activities.............. $ 78,726
---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of Investments in Real Estate.................... $(376,816)
Construction-in-Progress................................... (19,532)
Purchases of Lease Acquisition Costs....................... (3,059)
Increases in Lease Acquisition Costs....................... (3,798)
Improvements to Real Estate................................ (458)
Acquisition Deposits....................................... (1,579)
Proceeds from Sale of Real Estate.......................... 6,874
Advances to Cabot Advisors................................. (351)
Purchases of Furniture, Fixtures and Equipment............. (76)
---------
Net Cash Used in Investing Activities.................. $(398,795)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in Deferred Financing Costs....................... $ (1,721)
Increase in Other Assets................................... (490)
Debt Principal Repayments.................................. (14,232)
Line of Credit Borrowings, net............................. 200,000
Partner Contributions...................................... 177,606
Repurchase of Partnership Units............................ (1,718)
Distributions paid to Unitholders.......................... (37,076)
---------
Net Cash Provided by Financing Activities.............. $ 322,369
---------
Net Increase in Cash and Cash Equivalents.............. $ 2,300
---------
CASH AND CASH EQUIVALENTS-BEGINNING OF YEAR................ 1
---------
CASH AND CASH EQUIVALENTS-END OF YEAR...................... $ 2,301
=========
Cash paid for interest, net of amounts capitalized......... $ 5,771
=========
</TABLE>
DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
In conjunction with the Offering and Formation Transactions, Cabot L.P.
assumed $18,413 of indebtedness and issued 33,850,000 Partnership Units in
exchange for real estate assets and the advisory business of Cabot Partners
valued at $659,021 and $77, respectively.
In conjunction with the acquisitions of certain real estate, Cabot L.P.
assumed $44,025 of indebtedness and issued Units valued at $2,268.
At December 31, 1998, accrued capital expenditures (including amounts
included in accounts payable) totaled $7,243, accrued development costs totaled
$3,576 and accrued offering costs totaled $1,290.
The accompanying notes are an integral part of these consolidated financial
statements.
F-6
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
1. General
Organization
Cabot Industrial Properties, L.P. ("Cabot L.P.") a Delaware limited
partnership, was formed on October 10, 1997. The general partner of Cabot L.P.
is Cabot Industrial Trust ("Cabot Trust"), a Maryland real estate investment
trust which was also formed on October 10, 1997. As the general partner of
Cabot L.P., Cabot Trust has the exclusive power under the agreement of limited
partnership to manage and conduct the business of Cabot L.P. Cabot Trust 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"). Cabot Trust expects to qualify as a real estate investment
trust (a REIT) for federal income tax purposes. Since Cabot L.P. was formed on
October 10, 1997, and did not begin operations until February 4, 1998 (see The
Formation Transactions below), the results for the year ended December 31,
1998, represent activity for 331 days, or approximately 11 months.
The Formation Transactions
On February 4, 1998, under a Contribution Agreement executed by Cabot Trust,
Cabot L.P., Cabot Partners, and various other contributors, 122 industrial real
estate properties, certain real estate advisory contracts and other assets were
(i) contributed to Cabot L.P. in exchange for Units in Cabot L.P. that may,
subject to certain restrictions, be exchanged for common shares of Cabot Trust
or (ii) contributed to Cabot Trust in exchange for common shares. The
properties contributed to Cabot Trust were concurrently contributed by it to
Cabot L.P. in exchange for the number of general partnership Units in Cabot
L.P. equal to the number of common shares exchanged for the property.
Cabot L.P. contributed the real estate advisory contracts to Cabot Advisors,
Inc. ("Cabot Advisors") and received 100% of the non-voting preferred stock of
Cabot Advisors, which entitles it to 95% of Cabot Advisors' net operating cash
flow. All of the common stock of Cabot Advisors is owned by an officer of Cabot
Trust.
At December 31, 1998, Cabot Trust owned 42.7% of Cabot L.P. The remaining
57.3% was owned by investors that elected to receive Partnership Units.
The Offerings
On February 4, 1998, Cabot Trust completed the offering of 8,625,000 common
shares at an offering price of $20.00 per share. In addition, Cabot Trust
issued 1,000,000 common shares in a private offering at $20.00 per share
(collectively, the "Offerings"). Cabot Trust contributed the net proceeds of
the Offerings to Cabot L.P. in exchange for the number of general partnership
interests in Cabot L.P. equal to the number of common shares sold in the
Offerings.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of
Cabot L.P. and its subsidiaries over which it exercises control. All
significant intercompany accounts and transactions have been eliminated in
consolidation.
F-7
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998
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 the
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.
Investment in Real Estate
Investments in real estate are carried at cost, less accumulated
depreciation. It is Cabot L.P.'s policy to review the carrying value of long-
lived assets for impairment whenever events or changes in circumstances
indicate that the carrying value of such assets may not be recoverable.
Measurement of the impairment loss is based on the fair value of the asset.
Generally, fair value will be determined using valuation techniques such as the
present value of expected future cash flows. No impairment adjustments have
been made as a result of this review process during 1998.
Investments in real estate are primarily 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 extend the useful life of or improve the assets are
capitalized.
Cash Equivalents
Cabot L.P. considers all short-term investments with a maturity of three
months or less to be cash equivalents.
Capitalization of Costs
Cabot L.P. has capitalized as deferred costs certain expenditures related to
the financing and leasing of its properties. Capitalized loan fees are
amortized over the term of the related loans and lease acquisition costs are
amortized over the term of the related leases, or the estimated useful life of
the improvement, if shorter. Deferred Lease Acquisition Costs and Deferred
Financing Costs included in the accompanying consolidated balance sheet are
presented net of accumulated amortization totaling $3,487,000 and $466,000,
respectively, as of December 31, 1998.
Investment in Cabot Advisors
Cabot L.P.'s investment in Cabot Advisors is accounted for using the equity
method. Under the equity method of accounting, Cabot L.P.'s pro rata share of
Cabot Advisors' income (loss) is recorded as an increase (decrease) in the
carrying value of its investment, and any distributions received are recorded
as decreases in the carrying value.
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. Cabot L.P. records rental
income for the full term of each lease on a straight-line basis. The resulting
Deferred Rent Receivable represents the amount due from tenants, net of
reserves, which Cabot L.P. expects to collect over the remaining life of the
leases rather than currently. Deferred rental revenue is not recognized for
income tax purposes until received.
F-8
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998
Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities". The new statement is effective for fiscal
years beginning after June 15, 1999; earlier adoption is allowed. This
statement requires companies to record derivatives on the balance sheet as
assets or liabilities, measured at fair value. Gains or losses resulting from
changes in the values of those derivatives would be accounted for depending on
the use of the derivative and whether it qualifies for hedge accounting. Cabot
L.P. is currently evaluating the impact of this Statement and does not
anticipate a material effect on its results of operations or financial position
resulting from the adoption of SFAS No. 133 due to its relatively limited use
of derivative instruments.
3. Acquisitions of Real Estate Investments
In accordance with generally accepted accounting principles, Cabot L.P. has
accounted for the Formation Transactions using the purchase method of
accounting. As such, the assets acquired and liabilities assumed 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 their 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 costs recorded in connection
with the Formation Transactions:
<TABLE>
<CAPTION>
(in 000's)
----------
<S> <C>
Fair value of Cabot L.P.'s Units, based on the February 4, 1998
value of $20 per Unit, issued to the contributing investors
(except Cabot Partners) and to Cabot Trust...................... $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
--------
Total acquisition cost basis..................................... $667,811
========
Acquisition cost basis allocated to:
Land........................................................... $129,877
Buildings...................................................... 525,471
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>
Subsequent to the Formation Transactions, Cabot L.P. acquired 84 properties
with an aggregate of approximately 9.6 million net rentable square feet. The
aggregate purchase price for the 84 properties was $426.2 million, including
$44.0 million of debt assumed and issuance of $2.3 million in Units of Cabot
L.P.
F-9
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998
4. Debt
The Acquisition Facility
On March 16, 1998, Cabot L.P. entered into a $325 million unsecured
revolving line of credit (the "Acquisition Facility"). The Acquisition Facility
matures on March 16, 2001, and the interest rate ranges from LIBOR plus 75
basis points to LIBOR plus 125 basis points depending on Cabot L.P.'s loan-to-
value ratio. At December 31, 1998, outstanding borrowings under the Acquisition
Facility were $200 million and the interest rate was LIBOR plus 100 basis
points, or 6.60%. The weighted average coupon interest rate on the Acquisition
Facility was 6.58% for the year ended December 31, 1998, including the effect
of the interest rate collar arrangements described below. The Acquisition
Facility is intended to be used to acquire and develop properties and for
working capital purposes.
Cabot L.P. has entered into an interest rate collar arrangement relating to
its LIBOR-based Acquisition Facility for a notional amount of $140 million for
the period from January 1, 1999, through February 15, 1999. The arrangement is
intended to result in limiting the LIBOR component of Cabot L.P.'s interest
rate on an equivalent amount of borrowings to the range of 5.05% to 6.25% per
annum. Similar arrangements in effect during 1998 resulted in interest expense
of $47,000. Cabot L.P. has also entered into an interest rate hedge
transaction, which expires on March 31, 1999, involving the future sale of $100
million of Treasury Securities based on a rate of approximately 5.54% for such
securities in anticipation of a future debt issuance with a maturity of 10
years. (See Note 9.)
Mortgage Loans
Cabot L.P. assumed certain loans in connection with the Formation
Transactions and has assumed certain loans in conjunction with subsequent real
estate acquisitions (the "Mortgage Loans"). The Mortgage Loans bear interest at
annual coupon rates ranging from 7.95% to 9.67% and are secured by certain of
Cabot L.P.'s properties, with a net book value of $92.6 million as of December
31, 1998. Certain of the debt assumed in conjunction with the acquisition of
properties bears a coupon interest rate which differed from the fair market
value interest rate at the date of acquisition. In accordance with generally
accepted accounting principles, such debt was recorded at fair market value and
interest expense recorded in the accompanying consolidated statement of
operations is adjusted based on the fair market interest rate at the date of
purchase.
Aggregate principal payments on Mortgage Loans at December 31, 1998, for the
five years ending December 31 and thereafter are as follows:
<TABLE>
<CAPTION>
(in 000's)
----------
<S> <C>
1999.............................................................. $ 4,100
2000.............................................................. 4,165
2001.............................................................. 1,970
2002.............................................................. 6,648
2003.............................................................. 8,774
Thereafter........................................................ 22,549
</TABLE>
F-10
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998
5. Future Minimum Rents
Future minimum rental receipts due on noncancelable operating leases for
Cabot L.P.'s 206 industrial properties as of December 31, 1998, were as
follows:
<TABLE>
<CAPTION>
(in 000's)
----------
<S> <C>
1999.............................................................. $102,913
2000.............................................................. 87,579
2001.............................................................. 74,617
2002.............................................................. 56,279
2003.............................................................. 39,762
Thereafter........................................................ 94,594
</TABLE>
Cabot L.P. is subject to the usual business risks associated with the
collection of the above-scheduled rents. The above amounts do not include
additional rental receipts that will become due as a result of the expense
reimbursement and escalation provisions in the leases. In addition, Cabot
L.P.'s minimum future rental receipts related to non-industrial properties
total $2.3 million.
6. Income Taxes
No provision for federal and state income taxes has been recorded relating
to Cabot L.P. as the partners report their respective share of the net taxable
income on their individual tax returns.
7. Employee Benefit Plans
Cabot Trust 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 is administered by the
Executive Compensation Committee of the Board of Trustees, except that the
Board of Directors of Cabot Advisors or a committee thereof selects those
employees of Cabot Advisors who are eligible for awards under the Plan (in
either case, the Administrator). Officers and other employees of Cabot Trust,
Cabot L.P. and designated subsidiaries and members of the Board of Trustees who
are not employees of Cabot Trust are eligible to participate.
Options are awarded to Trustees or employees of Cabot Trust in the form of
Common Shares and to employees of Cabot L.P. or Cabot Advisors in the form of
Units. The Plan, at December 31, 1998, 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, and
therefore, currently the Plan authorizes the issuance of up to 4,349,047 Common
Shares and Units. 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
(collectively, "DEUs") 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 determines the terms of the option,
including the option exercise price, any vesting requirements and whether a DEU
shall be awarded. The Administrator has authority to award options at less than
fair market value but at this time has no intention of doing so. The options
granted under the Plan during 1998 have ten-year terms and become exercisable
in four equal annual installments commencing on the first anniversary of the
F-11
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998
date of grant, subject to acceleration of vesting upon a change in control of
Cabot Trust (as defined in the Plan). DEUs entitle an option holder to an award
of additional shares or units with a positive intrinsic value calculated using
a formula that is based on the difference, if any, between the annual
distribution rate on the Units and Common Shares versus the average dividend
rate on stocks included in the S&P 500 index. DEUs vest on the same vesting
schedule as the underlying option and entitle the holder to a share or unit at
the earlier of the year of exercise, or the year of expiration, of the
underlying option. The options granted in 1998 were generally awarded with
DEUs, which resulted in compensation expense of approximately $400,000.
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.
A summary of Cabot Trust's option activity is as follows:
<TABLE>
<CAPTION>
1998
---------------------------
Weighted
Number of Average
Shares/Units Exercise Price
------------ --------------
<S> <C> <C>
Options outstanding, beginning of year.............. -- --
Granted........................................... 3,195,015 $20.04
Exercised......................................... -- --
Forfeited......................................... (68,400) $20.00
--------- ------
Options outstanding, end of year.................... 3,126,615 $20.04
========= ======
Distribution Equivalent Units, end of year.......... 89,384 $ --
========= ======
Options exercisable................................. -- --
========= ======
Options available for grant......................... 1,131,501 --
========= ======
</TABLE>
A summary of the status of Cabot Trust's options at December 31, 1998, is as
follows:
<TABLE>
<CAPTION>
Options Outstanding
--------------------------------------------
Weighted Average Weighted
Number of Remaining Average
Range of Exercise Prices Shares/Units Contractual Life Exercise Price
- ------------------------ ------------ ---------------- --------------
<S> <C> <C> <C>
$17.00--$19.99.................... 973,015 9.95 years $19.76
$20.00............................ 2,028,100 9.10 years $20.00
$20.01--$24.16.................... 125,500 9.37 years $22.90
</TABLE>
Substantially all options granted pursuant to the plan during 1998 related
to Cabot L.P.
Pro Forma Stock-based Compensation Expense
In October 1995, the Financial Accounting Standards Board issued SFAS No.
123, "Accounting for Stock-based Compensation," which sets forth a fair-value
based method of recognizing stock-based compensation expense. As permitted by
SFAS No. 123, Cabot L.P. has elected to apply APB Opinion No. 25 to account for
its stock-based compensation plans. Accordingly, except for the distribution
equivalent units as
F-12
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998
described above, no compensation cost has been recognized for Cabot Trust's
Long Term Incentive Plan as the option prices at the date of grant were equal
to market prices. Had compensation cost for awards in 1998 under Cabot Trust's
stock-based compensation plans been determined based on the fair value at the
grant dates consistent with the method set forth under SFAS No. 123, the effect
on Cabot L.P.'s net income and earnings per share would have been as follows:
<TABLE>
<S> <C>
Net income:
As reported................................................... $50,958,000
Pro forma..................................................... 49,761,000
Basic earnings per unit:
As reported................................................... $ 1.17
Pro forma..................................................... 1.14
Diluted earnings per unit:
As reported................................................... $ 1.17
Pro forma..................................................... 1.14
</TABLE>
Pro forma compensation expense for options granted is reflected over the
vesting period; therefore, future pro forma compensation expense may be greater
as additional options are granted.
The weighted average fair value per unit of options granted was $2.58 in
1998. The fair value of each option grant was estimated on the grant date using
the Black-Scholes option-pricing model with the following weighted-average
assumptions:
<TABLE>
<CAPTION>
1998
----------
<S> <C>
Expected volatility.............................................. 20.66%
Risk-free interest rate.......................................... 4.52--5.60%
Expected life of options......................................... 7 years
Expected dividend yield.......................................... 6.2%
</TABLE>
The Black-Scholes option-pricing model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option-pricing models require the input of
highly subjective assumptions including expected stock price volatility.
Because Cabot L.P.'s employee Unit options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of fair value of its employee Unit options.
401(k) Savings Plan
The Cabot Savings Plan 401(k) covers eligible full-time employees of Cabot
Trust, Cabot L.P., and their affiliates. Contributions to the plan are made by
both the employee and employer. Employer contributions are based on the level
of employee contributions. For this plan, Cabot L.P. contributed and charged to
expense $44,000 in 1998.
F-13
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998
8. Earnings per Unit
In accordance with SFAS 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 subsequent to Cabot L.P.'s commencement
of operations (see Note 1).
Diluted earnings per Unit have been computed considering the dilutive effect
of the exercise of Unit options granted by Cabot L.P. Basic and diluted
earnings per Unit were calculated as follows:
<TABLE>
<CAPTION>
Period ended
December 31, 1998
(see Note 1)
-----------------
<S> <C>
Basic:
Net Income................................................. $50,958,000
-----------
Weighted Average Units..................................... 43,493,198
-----------
Basic Earnings per Unit.................................... $ 1.17
===========
Diluted:
Net Income................................................. $50,958,000
-----------
Weighted Average Units..................................... 43,493,198
Effect of Unit Options..................................... 93,678
-----------
43,586,876
-----------
Diluted Earnings per Unit.................................. $ 1.17
===========
</TABLE>
9. Fair Value of Financial Instruments
Statement of Financial Accounting Standards No. 107, "Disclosures about Fair
Value of Financial Instruments," requires Cabot L.P. to disclose fair value
information for all financial instruments, for which it is practicable to
estimate fair value, whether or not recognized in the balance sheet. Cabot
L.P.'s financial instruments, other than debt and interest rate protection
agreements are generally short-term in nature and contain minimal credit risk.
These instruments consist of cash and cash equivalents, rents and other
receivables and accounts payable. The carrying amount of these assets and
liabilities in the consolidated balance sheet approximate fair value.
The carrying amount and fair value of Cabot L.P.'s long-term obligations and
off-balance-sheet financial instruments as of December 31, 1998, are as
follows:
<TABLE>
<CAPTION>
Carrying Amount Fair Value
--------------- ----------
(in 000's)
<S> <C> <C>
Long-term obligations:
Mortgage loans payable............................. $(48,206) $(51,450)
Off-balance-sheet financial instruments:
Interest rate protection agreements (liability).... -- $ (6,734)
</TABLE>
Cabot L.P.'s mortgage loans are at fixed rates, which in certain cases
differ from borrowing rates currently available to Cabot L.P. with similar
terms and average maturities. The fair market values of Mortgage Loans were
estimated using a valuation technique which discounts expected future cash
flows to net present value. Cabot L.P.'s Acquisition Facility is at a variable
rate, which results in a carrying value that approximates its
F-14
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998
fair value. The fair value of Cabot L.P.'s interest rate protection agreements
is the estimated amount that Cabot L.P. would pay if it had terminated the
contract as of December 31, 1998, taking into account the change in interest
rates and the creditworthiness of the counterparties.
10. Cabot Advisors
Cabot Advisors is responsible for various activities including management of
Cabot L.P.'s properties and properties on behalf of third parties, as well as
providing other real estate related services for third parties. Total
management fees earned by Cabot Advisors related to Cabot L.P.'s properties are
included in Property Operating Expenses in the accompanying consolidated
statement of operations and amounted to $1,037,000.
Summarized unaudited financial information for Cabot Advisors as of December
31, 1998, and for the year then ended, is as follows:
<TABLE>
<CAPTION>
As of and for the
Year Ended
December 31, 1998
-----------------
(unaudited)
<S> <C>
Total assets............................................... $1,103,553
Total revenue.............................................. $3,280,664
Net income................................................. $ 243,626
Cabot L.P.'s share of net income........................... $ 231,445
</TABLE>
Cabot Advisors commenced operations on February 4, 1998, therefore, the
results for the year ended December 31, 1998 represent activity for 331 days,
or approximately 11 months. Cabot L.P.'s share of Cabot Advisors' net income is
included in Interest and Other Income in the accompanying consolidated
statement of operations.
11. Commitments and Contingencies
Concentration of Credit Risk
Cabot L.P. maintains its cash and cash equivalents at financial
institutions. The combined account balances at each institution periodically
exceed FDIC insurance coverage, and as a result, there is a concentration of
credit risk related to amounts on deposit in excess of FDIC insurance coverage.
Management of Cabot L.P. believes the risk is not significant.
Environmental
Cabot L.P., as an owner of real estate, is subject to various environmental
laws of federal and local governments. All of Cabot L.P.'s properties were
subject to Phase I Environmental Assessments, which consist of, among other
things, a visual inspection of the property and its neighborhood and a review
of pertinent public records. Compliance by Cabot L.P. with existing laws has
not had a material adverse effect on Cabot L.P.'s consolidated financial
condition or results of operations and management does not believe it will have
such a material adverse effect in the future.
F-15
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998
Litigation
Management of Cabot L.P. does not believe there is any litigation threatened
against it other than routine litigation arising out of the ordinary course of
business, some of which is expected to be covered by liability insurance, none
of which is expected to have a material adverse effect on the consolidated
operating results or financial position of Cabot L.P.
Minimum Future Lease Obligations
Minimum future lease obligations under noncancelable operating leases for
each of the next five years ending December 31 and thereafter are as follows:
<TABLE>
<S> <C>
1999.............................................................. $ 588,000
2000.............................................................. 596,000
2001.............................................................. 590,000
Thereafter........................................................ --
----------
$1,774,000
</TABLE>
Cabot L.P. incurred rental expense of $192,000 for the year ended December
31, 1998. In addition, Cabot Advisors incurred rental expense of $181,000 for
the year ended December 31, 1998. Cabot L.P.'s only significant leases are for
its office space. The leases provide for the payment of base rent and
reimbursement of operating expenses and real estate taxes over stated base
amounts.
Employment Agreements
Senior executives have entered into employment agreements with Cabot Trust
and Cabot L.P. Agreements with three of the senior executives are for an
initial term of three years, and each year the term automatically extends an
additional year unless terminated in advance. Agreements with four other senior
executives are for an initial term of two years, and each year the term
automatically extends an additional year unless terminated in advance. Each
agreement provides for annual base compensation in amounts ranging from
$175,000 to $265,000 ($1,385,000 in the aggregate in 1998) and an annual cash
bonus to be determined by the Board of Trustees or the Executive Compensation
Committee. The base annual compensation may be increased in subsequent years by
action of the Board of Trustees or the Executive Compensation Committee. Each
of the employment agreements provides for severance payments in the event of a
change in control of Cabot Trust equal to three times the sum of the current
base salary and the annual bonus paid for the preceding year and also provides
for tax reimbursements in certain circumstances.
Severance Agreements
On December 17, 1998, Cabot Trust's Board of Trustees approved a retention
and severance plan covering all full-time employees of Cabot Trust and its
affiliates not covered by employment agreements which will provide for six to
twenty-one months of compensation to be paid, under certain circumstances, in
the event of a change in control.
As of December 31, 1998, total costs payable under the employment and
severance agreements covering senior executives and other employees in the
event of a change in control approximated $11 million.
F-16
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1998
12. Supplementary Quarterly Data
<TABLE>
<CAPTION>
(Unaudited, in 000's)
---------------------------------------------
March 31, June 30, September 30, December 31,
1998(1) 1998 1998 1998
--------- -------- ------------- ------------
<S> <C> <C> <C> <C>
Rental income.................... $14,733 $26,159 $28,417 $33,116
Gain on sale of real estate...... -- -- -- 572
Net income....................... 8,126 14,242 14,055 14,535
Earnings per unit, basic......... .19 .33 .32 .33
Earnings per unit, diluted....... .19 .33 .32 .33
</TABLE>
- --------
(1) Since Cabot L.P. did not begin operations until February 4, 1998, the
results for the quarter ended March 31, 1998, represent activity for 56
days only.
13. Subsequent Events
In February 1999, Cabot L.P. borrowed $87.6 million, secured by properties
with a net book value of approximately $130 million. The borrowing has a fixed
interest rate of 7.25% per annum and a 10-year term. Monthly installments of
principal and interest are due based on a 25-year amortization rate, and any
remaining balance outstanding is due at the end of the 10-year term. This
borrowing is subject to various customary covenants. The proceeds from the
borrowing were used to repay a portion of the balance outstanding under the
Acquisition Facility.
Subsequent to December 31, 1998, Cabot L.P. acquired the following
industrial properties, which acquisitions were funded primarily through
proceeds from the Acquisition Facility:
<TABLE>
<CAPTION>
Property Location Building Type Square Feet Acquisition Cost
- ----------------- ------------------------ ----------- ----------------
<S> <C> <C> <C>
Farmers Branch, TX........ Multitenant Distribution 82,756 $3,250,000
Carrollton, TX............ Workspace 56,531 2,180,000
</TABLE>
In addition, as of March 8, 1999, Cabot L.P. has entered into separate
agreements to acquire 33 additional industrial properties with an estimated
acquisition cost of $71.2 million.
F-17
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
Schedule III -- Real Estate and Accumulated Depreciation
December 31, 1998
(dollar amounts 000's)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent to Gross Amount Carried
Initial Cost Acquisition as of December 31, 1998
------------------- ------------------ ----------------------------
Number of Encum- Buildings and Buildings and Buildings and
Property Name(s) Buildings Location brances Land Improvements Land Improvements Land Improvements
- ---------------- --------- -------- ------- ----- ------------- ---- ------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
North 104th
Avenue.......... 1 Tolleson, AZ $ -- $ 651 $6,476 $-- $ 3 $ 651 $ 6,479
North 47th
Avenue.......... 1 Phoenix, AZ -- 471 3,675 -- -- 471 3,675
South 55th
Avenue.......... 1 Phoenix, AZ -- 334 1,953 -- 31 334 1,984
South 63rd
Avenue.......... 1 Phoenix, AZ -- 528 4,471 -- -- 528 4,471
South 84th
Avenue.......... 1 Tolleson, AZ -- 553 6,067 -- -- 553 6,067
West Van Buren.. 1 Tolleson, AZ -- 475 6,224 -- -- 475 6,224
South 41st
Avenue.......... 2 Phoenix, AZ 8,561 1,261 10,524 -- -- 1,261 10,524
South 49th
Avenue.......... 1 Phoenix, AZ 2,463 787 3,069 -- -- 787 3,069
44th Avenue..... 1 Phoenix, AZ -- 575 3,629 -- 121 575 3,750
South 9th
Street.......... 1 Phoenix, AZ 2,968 1,394 5,709 -- -- 1,394 5,709
South 39th
Avenue.......... 1 Phoenix, AZ 4,663 550 7,606 -- -- 550 7,606
South 40th
Avenue.......... 2 Phoenix, AZ 3,703 1,036 7,474 -- -- 1,036 7,474
South 53rd
Avenue.......... 1 Phoenix, AZ 2,426 226 3,667 -- -- 226 3,667
South 40th
Avenue.......... 1 Phoenix, AZ -- 1,131 5,680 -- -- 1,131 5,680
East Encanto
Drive........... 1 Tempe, AZ 957 460 2,906 -- -- 460 2,906
West Alameda
Drive........... 4 Tempe, AZ -- 1,000 4,572 -- -- 1,000 4,572
South Priest
Drive........... 1 Tempe, AZ -- 813 3,140 -- 147 813 3,287
DeForest
Circle.......... 1 Mira Loma, CA -- 1,870 7,794 -- -- 1,870 7,794
Santa Anita
Avenue.......... 1 Rancho Cucamonga, CA -- 1,641 6,093 -- -- 1,641 6,093
East Jurupa
Street.......... 1 Ontario, CA -- 1,256 2,702 -- 24 1,256 2,726
South
Rockefeller
Avenue.......... 1 Ontario, CA -- 1,259 4,249 -- -- 1,259 4,249
South Vintage
Avenue.......... 2 Ontario, CA -- 4,026 12,031 -- -- 4,026 12,031
Vintage Avenue.. 1 Ontario, CA -- 2,139 7,224 -- -- 2,139 7,224
San Fernando
Road............ 1 Sun Valley, CA -- 2,612 7,118 -- -- 2,612 7,118
Rowland Street.. 1 City of Industry, CA -- 2,000 6,102 -- 165 2,000 6,267
East Dyer Road.. 1 Santa Ana, CA -- 8,160 6,172 -- -- 8,160 6,172
<CAPTION>
Date Depreciable
Accumulated Constructed/ Date Lives
Property Name(s) Total(1) Depreciation Renovated Acquired in Years
- ---------------- -------- ------------ ------------ -------- -----------
<S> <C> <C> <C> <C> <C>
North 104th
Avenue.......... $7,130 $(146) 1995 02/04/98 10-40
North 47th
Avenue.......... 4,146 (88) 1986 02/04/98 10-40
South 55th
Avenue.......... 2,318 (35) 1986 02/04/98 10-40
South 63rd
Avenue.......... 4,999 (102) 1990 02/04/98 10-40
South 84th
Avenue.......... 6,620 (141) 1989 02/04/98 10-40
West Van Buren.. 6,699 (123) 1997 03/16/98 10-40
South 41st
Avenue.......... 11,785 (73) 1985 09/22/98 10-40
South 49th
Avenue.......... 3,856 (22) 1989 09/22/98 10-40
44th Avenue..... 4,325 (77) 1997 03/16/98 10-40
South 9th
Street.......... 7,103 (84) 1983 06/30/98 10-40
South 39th
Avenue.......... 8,156 (51) 1989 09/22/98 10-40
South 40th
Avenue.......... 8,510 (50) 1990 09/22/98 10-40
South 53rd
Avenue.......... 3,893 (25) 1987 09/22/98 10-40
South 40th
Avenue.......... 6,811 0 1987 12/29/98 10-40
East Encanto
Drive........... 3,366 (57) 1990 03/17/98 10-40
West Alameda
Drive........... 5,572 (32) 1984 09/21/98 10-40
South Priest
Drive........... 4,100 (23) 1998 09/21/98 10-40
DeForest
Circle.......... 9,664 (170) 1992 02/06/98 10-40
Santa Anita
Avenue.......... 7,734 (149) 1988 02/04/98 10-40
East Jurupa
Street.......... 3,982 (80) 1986 02/04/98 10-40
South
Rockefeller
Avenue.......... 5,508 (109) 1986 02/04/98 10-40
South Vintage
Avenue.......... 16,057 (308) 1986 02/04/98 10-40
Vintage Avenue.. 9,363 (170) 1988 02/04/98 10-40
San Fernando
Road............ 9,730 (130) 1980 04/07/98 10-40
Rowland Street.. 8,267 (45) 1998 09/01/98 10-40
East Dyer Road.. 14,332 (138) 1954/1965 02/04/98 10-40
</TABLE>
F-18
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
Schedule III -- Real Estate and Accumulated Depreciation (continued)
December 31, 1998
(dollar amounts 000's)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent to Gross Amount Carried
Initial Cost Acquisition as of December 31, 1998
-------------------- ------------------ ----------------------------
Number of Encum- Buildings and Buildings and Buildings and
Property Name(s) Buildings Location brances Land Improvements Land Improvements Land Improvements
- ---------------- --------- -------- ------- ------ ------------- ---- ------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Industry
Circle.......... 1 La Mirada, CA -- 1,802 3,325 -- -- 1,802 3,325
East Santa Ana
Street.......... 2 Ontario, CA 1,272 1,230 5,190 -- -- 1,230 5,190
Jersey Court.... 1 Rancho Cucamonga, CA -- 736 2,420 -- -- 736 2,420
12th Street..... 1 Chino, CA -- 889 3,170 -- -- 889 3,170
West Rincon
Street.......... 1 Corona, CA -- 1,955 6,318 -- -- 1,955 6,318
Artesia Avenue.. 2 Fullerton, CA -- 1,186 3,208 -- -- 1,186 3,208
Commonwealth
Avenue.......... 1 Fullerton, CA -- 640 1,333 -- -- 640 1,333
East Howell
Avenue.......... 2 Anaheim, CA -- 1,382 3,242 -- -- 1,382 3,242
Kovacs Lane..... 1 Huntington Beach, CA -- 1,750 6,243 -- -- 1,750 6,243
Anza Drive...... 3 Valencia, CA -- 588 1,460 -- -- 588 1,460
Royal Avenue.... 1 Simi Valley, CA -- 443 1,320 -- -- 443 1,320
Union Place..... 2 Simi Valley, CA -- 915 4,032 -- 6 915 4,038
Dornoch Court... 1 San Diego, CA -- 1,870 9,030 -- -- 1,870 9,030
Avenida
Encinas......... 2 Carlsbad, CA -- 3,675 9,900 -- -- 3,675 9,900
Airway Road..... 2 Otay Mesa, CA -- 1,301 6,460 -- -- 1,301 6,460
Reed Avenue..... 2 West Sacramento, CA -- 1,837 5,843 -- -- 1,837 5,843
Huntwood
Avenue.......... 1 Hayward, CA -- 880 3,587 -- -- 880 3,587
Brisbane
Industrial
Park............ 14 Brisbane, CA -- 10,007 15,220 -- 5 10,007 15,225
Pepes Farm
Road............ 1 Milford, CT -- 1,637 6,533 -- -- 1,637 6,533
Landstreet Road,
Building 1...... 1 Orlando, FL -- 1,340 13,221 -- 2 1,340 13,223
Kingspointe
Parkway......... 1 Orlando, FL -- 600 2,791 -- 3 600 2,794
Orlando Central
Park............ 6 Orlando, FL -- 7,083 31,176 -- 113 7,083 31,289
Exchange Drive.. 1 Orlando, FL -- 400 3,270 -- 14 400 3,284
Boggy Creek
Road............ 2 Orlando, FL -- 649 4,939 -- -- 649 4,939
Landstreet
Road............ 2 Orlando, FL -- 649 4,817 -- -- 649 4,817
Boggy Creek
Road, Building
3............... 1 Orlando, FL -- 345 1,802 -- -- 345 1,802
Highway 316..... 1 Dacula, GA -- 1,279 10,424 -- -- 1,279 10,424
<CAPTION>
Date Depreciable
Accumulated Constructed/ Date Lives
Property Name(s) Total(1) Depreciation Renovated Acquired in Years
- ---------------- -------- ------------ ------------ -------- -----------
<S> <C> <C> <C> <C> <C>
Industry
Circle.......... 5,127 (17) 1966 10/21/98 10-40
East Santa Ana
Street.......... 6,420 (80) 1990 05/20/98 10-40
Jersey Court.... 3,156 (21) 1989 09/30/98 10-40
12th Street..... 4,059 (25) 1990 09/30/98 10-40
West Rincon
Street.......... 8,273 (47) 1986 09/30/98 10-40
Artesia Avenue.. 4,394 (73) 1991 02/04/98 10-40
Commonwealth
Avenue.......... 1,973 (30) 1965 02/04/98 10-40
East Howell
Avenue.......... 4,624 (75) 1968 02/04/98 10-40
Kovacs Lane..... 7,993 (84) 1988 06/17/98 10-40
Anza Drive...... 2,048 (20) 1990 06/29/98 10-40
Royal Avenue.... 1,763 (18) 1988 06/29/98 10-40
Union Place..... 4,953 (55) 1985 06/29/98 10-40
Dornoch Court... 10,900 (197) 1988 02/06/98 10-40
Avenida
Encinas......... 13,575 (225) 1972 02/04/98 10-40
Airway Road..... 7,761 (101) 1996 05/08/98 10-40
Reed Avenue..... 7,680 (133) 1988 02/04/98 10-40
Huntwood
Avenue.......... 4,467 (90) 1982 02/04/98 10-40
Brisbane
Industrial
Park............ 25,232 (350) 1968 02/04/98 10-40
Pepes Farm
Road............ 8,170 (149) 1980 02/04/98 10-40
Landstreet Road,
Building 1...... 14,563 (301) 1997 02/04/98 10-40
Kingspointe
Parkway......... 3,394 (64) 1991 02/04/98 10-40
Orlando Central
Park............ 38,372 (747) 1983 02/04/98 10-40
Exchange Drive.. 3,684 (36) 1979 07/30/98 10-40
Boggy Creek
Road............ 5,588 (111) 1992 02/13/98 10-40
Landstreet
Road............ 5,466 (102) 1997 02/13/98 10-40
Boggy Creek
Road, Building
3............... 2,147 0 1998 03/04/98 10-40
Highway 316..... 11,703 (228) 1989 02/06/98 10-40
</TABLE>
F-19
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
Schedule III -- Real Estate and Accumulated Depreciation (continued)
December 31, 1998
(dollar amounts 000's)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent Gross Amount Carried
Initial Cost to Acquisition as of December 31, 1998
------------------- ------------------ ----------------------------
Number of Encum- Buildings and Buildings and Buildings and
Property Name(s) Buildings Location brances Land Improvements Land Improvements Land Improvements
- ---------------- --------- -------- ------- ----- ------------- ---- ------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Westgate
Parkway......... 1 Fulton County, GA -- 1,619 4,782 -- 2 1,619 4,784
Atlanta
Industrial
Drive........... 1 Atlanta, GA -- 1,032 2,999 -- 14 1,032 3,013
Westpark Drive.. 2 Fulton County, GA -- 1,404 7,065 -- -- 1,404 7,065
Cobb
International
Place........... 2 Kennesaw, GA -- 750 4,605 -- 2 750 4,607
South Royal
Drive........... 3 Tucker, GA -- 1,125 4,426 -- -- 1,125 4,426
Town Park
Drive........... 2 Kennesaw, GA -- 1,089 4,716 -- 3 1,089 4,719
Ambassador
Road............ 1 Naperville, IL -- 1,060 6,738 -- 101 1,060 6,839
Arthur Avenue... 1 Elk Grove, IL -- 747 5,877 -- -- 747 5,877
Harvester
Drive........... 1 Chicago, IL -- 763 6,358 -- -- 763 6,358
Mark Street..... 1 Wood Dale, IL -- 1,570 7,541 -- -- 1,570 7,541
Remington
Street.......... 1 Bolingbrook, IL -- 980 7,544 -- -- 980 7,544
West 73rd
Street.......... 3 Bedford Park, IL -- 2,540 20,809 -- 6 2,540 20,815
North Raddant
Road............ 1 Batavia, IL -- 931 5,977 -- -- 931 5,977
High Grove
Lane............ 1 Naperville, IL -- 800 3,156 -- -- 800 3,156
Medinah Road.... 2 Chicago, IL -- 2,936 17,471 -- -- 2,936 17,471
Western Avenue.. 1 Lisle, IL -- 700 2,241 -- -- 700 2,241
Swenson Avenue.. 1 St. Charles, IL -- 650 2,479 -- -- 650 2,479
Feehanville
Drive........... 1 Mount Prospect, IL -- 1,043 3,819 -- -- 1,043 3,819
Business Center,
Building 1...... 1 Mount Prospect, IL -- 757 2,867 -- -- 757 2,867
Tower Lane...... 1 Bensenville, IL -- 740 4,040 -- 1 740 4,041
Business Center,
Building 2...... 1 Mount Prospect, IL -- 1,456 5,250 -- -- 1,456 5,250
North State Rd.
#9.............. 1 Howe, IN -- 239 6,583 -- 32 239 6,615
Holton Drive.... 1 Independence, KY -- 2,100 8,244 -- -- 2,100 8,244
International
Way............. 1 Hebron, KY -- 663 4,897 -- -- 663 4,897
Empire Drive.... 1 Florence, KY -- 403 2,563 -- -- 403 2,563
Spiral Drive.... 2 Florence, KY -- 317 3,734 -- -- 317 3,734
Airport Exchange
Drive........... 1 Erlanger, KY -- 744 3,769 -- -- 744 3,769
<CAPTION>
Date Depreciable
Accumulated Constructed/ Date Lives
Property Name(s) Total(1) Depreciation Renovated Acquired in Years
- ---------------- -------- ------------ ------------ -------- -----------
<S> <C> <C> <C> <C> <C>
Westgate
Parkway......... 6,403 (109) 1988 02/04/98 10-40
Atlanta
Industrial
Drive........... 4,045 (29) 1986 09/11/98 10-40
Westpark Drive.. 8,469 (59) 1981 09/08/98 10-40
Cobb
International
Place........... 5,357 (91) 1996 03/13/98 10-40
South Royal
Drive........... 5,551 (94) 1987 02/27/98 10-40
Town Park
Drive........... 5,808 (73) 1995 03/31/98 10-40
Ambassador
Road............ 7,899 (153) 1996 02/04/98 10-40
Arthur Avenue... 6,624 (103) 1978 02/04/98 10-40
Harvester
Drive........... 7,121 (145) 1974 02/04/98 10-40
Mark Street..... 9,111 (144) 1985 02/04/98 10-40
Remington
Street.......... 8,524 (171) 1996 02/04/98 10-40
West 73rd
Street.......... 23,355 (433) 1982 02/04/98 10-40
North Raddant
Road............ 6,908 (58) 1991 08/31/98 10-40
High Grove
Lane............ 3,956 (71) 1994 02/04/98 10-40
Medinah Road.... 20,407 (400) 1986 02/04/98 10-40
Western Avenue.. 2,941 (51) 1979/1985 02/04/98 10-40
Swenson Avenue.. 3,129 (18) 1988 09/24/98 10-40
Feehanville
Drive........... 4,862 (73) 1987 03/31/98 10-40
Business Center,
Building 1...... 3,624 (44) 1985 05/26/98 10-40
Tower Lane...... 4,781 (49) 1977 07/14/98 10-40
Business Center,
Building 2...... 6,706 (27) 1989 10/16/98 10-40
North State Rd.
#9.............. 6,854 (151) 1988 02/04/98 10-40
Holton Drive.... 10,344 (188) 1996 02/04/98 10-40
International
Way............. 5,560 (112) 1990 02/04/98 10-40
Empire Drive.... 2,966 (63) 1991 02/04/98 10-40
Spiral Drive.... 4,051 (66) 1988 03/19/98 10-40
Airport Exchange
Drive........... 4,513 (27) 1997 09/18/98 10-40
</TABLE>
F-20
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
Schedule III -- Real Estate and Accumulated Depreciation (continued)
December 31, 1998
(dollar amounts 000's)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent Gross Amount Carried
Initial Cost to Acquisition as of December 31, 1998
------------------- ------------------ ----------------------------
Number of Encum- Buildings and Buildings and Buildings and
Property Name(s) Buildings Location brances Land Improvements Land Improvements Land Improvements
- ---------------- --------- -------- ------- ----- ------------- ---- ------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
First Avenue.... 1 Needham, MA -- 2,530 4,123 -- -- 2,530 4,123
John Hancock
Road............ 1 Taunton, MA 1,510 257 1,872 -- -- 257 1,872
Technology
Drive........... 1 Auburn, MA -- 663 1,269 -- -- 663 1,269
Oceano Avenue... 1 Jessup, MD -- 1,629 7,862 -- -- 1,629 7,862
Tar Bay Drive... 1 Jessup, MD -- 1,415 6,475 -- -- 1,415 6,475
Port Capital
Drive........... 1 Jessup, MD 1,307 900 4,106 -- -- 900 4,106
The Crysen
Center.......... 2 Jessup, MD -- 1,365 5,454 -- -- 1,365 5,454
Guilford Road... 1 Annapolis Junction, MD -- 1,123 4,718 -- -- 1,123 4,718
Bristol Court... 1 Jessup, MD -- 785 3,132 -- -- 785 3,132
West Nursery
Road............ 2 Linthicum, MD 3,504 1,019 6,749 -- -- 1,019 6,749
Fontana Lane.... 2 Baltimore, MD 4,531 915 5,771 -- -- 915 5,771
Sysco Court..... 1 Grand Rapids, MI 2,038 354 1,788 -- -- 354 1,788
Woodale Drive... 4 Mounds View, MN -- 2,835 17,455 -- -- 2,835 17,455
Industrial Drive
South........... 1 Gluckstadt, MS -- 320 5,697 -- -- 320 5,697
Reames Road..... 1 Charlotte, NC -- 365 2,922 -- 21 365 2,943
Old Charlotte
Highway......... 1 Monroe, NC -- 833 4,196 -- -- 833 4,196
Airport Road.... 1 Monroe, NC -- 555 2,793 -- -- 555 2,793
Birch Creek
Road............ 1 Bridgeport, NJ -- 862 6,900 -- -- 862 6,900
Herrod
Boulevard....... 1 South Brunswick, NJ -- 2,600 15,289 -- -- 2,600 15,289
Pierce Street... 1 Franklin Township, NJ -- 1,400 6,716 -- -- 1,400 6,716
South Middlesex
Avenue.......... 2 Cranbury, NJ -- 2,700 12,532 -- -- 2,700 12,532
Colony Road..... 2 Port Jersey, NJ -- 2,816 10,266 -- -- 2,816 10,266
Industrial
Drive........... 3 Port Jersey, NJ -- 3,024 13,298 -- -- 3,024 13,298
Port Jersey
Boulevard....... 2 Port Jersey, NJ -- 5,493 18,974 -- -- 5,493 18,974
Pulaski
Boulevard....... 1 Port Jersey, NJ -- 1,769 5,572 -- -- 1,769 5,572
Memorial Drive.. 1 Franklin Township, NJ -- 1,859 4,844 -- -- 1,859 4,844
New England
Avenue.......... 1 Piscataway, NJ -- 1,350 2,423 -- -- 1,350 2,423
<CAPTION>
Date Depreciable
Accumulated Constructed/ Date Lives
Property Name(s) Total(1) Depreciation Renovated Acquired in Years
- ---------------- -------- ------------ ------------ -------- -----------
<S> <C> <C> <C> <C> <C>
First Avenue.... 6,653 (94) 1961/1992 02/04/98 10-40
John Hancock
Road............ 2,129 (41) 1986 02/04/98 10-40
Technology
Drive........... 1,932 (29) 1973 02/04/98 10-40
Oceano Avenue... 9,491 (180) 1987 02/04/98 10-40
Tar Bay Drive... 7,890 (148) 1990 02/04/98 10-40
Port Capital
Drive........... 5,006 (42) 1974 08/06/98 10-40
The Crysen
Center.......... 6,819 (118) 1985 02/04/98 10-40
Guilford Road... 5,841 (50) 1989 08/03/98 10-40
Bristol Court... 3,917 (37) 1988 08/03/98 10-40
West Nursery
Road............ 7,768 (50) 1989 08/03/98 10-40
Fontana Lane.... 6,686 (57) 1988 08/03/98 10-40
Sysco Court..... 2,142 (40) 1985 02/04/98 10-40
Woodale Drive... 20,290 (347) 1992 03/31/98 10-40
Industrial Drive
South........... 6,017 (130) 1988 02/04/98 10-40
Reames Road..... 3,308 (67) 1994 02/04/98 10-40
Old Charlotte
Highway......... 5,029 (96) 1957/1972 02/04/98 10-40
Airport Road.... 3,348 (64) 1957/1972 02/04/98 10-40
Birch Creek
Road............ 7,762 (176) 1991/1997 02/04/98 10-40
Herrod
Boulevard....... 17,889 (350) 1989 02/04/98 10-40
Pierce Street... 8,116 (153) 1984 02/04/98 10-40
South Middlesex
Avenue.......... 15,232 (286) 1989 02/04/98 10-40
Colony Road..... 13,082 (239) 1976 02/04/98 10-40
Industrial
Drive........... 16,322 (310) 1976 02/04/98 10-40
Port Jersey
Boulevard....... 24,467 (453) 1974/1982 02/04/98 10-40
Pulaski
Boulevard....... 7,341 (145) 1974 02/04/98 10-40
Memorial Drive.. 6,703 (106) 1988 02/04/98 10-40
New England
Avenue.......... 3,773 (36) 1975/1995 06/26/98 10-40
</TABLE>
F-21
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
Schedule III -- Real Estate and Accumulated Depreciation (continued)
December 31, 1998
(dollar amounts 000's)
<TABLE>
<CAPTION>
Costs Capitalized
Subsequent Gross Amount Carried
Initial Cost to Acquisition as of December 31, 1998
---------------------- ------------------ ----------------------------
Number of Encum- Buildings and Buildings and Buildings and
Property Name(s) Buildings Location brances Land Improvements Land Improvements Land Improvements
- ---------------- --------- -------- ------- -------- ------------- ---- ------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Equity Drive.... 2 Columbus, OH -- 1,854 7,301 -- 91 1,854 7,392
Westbelt Drive.. 2 Columbus, OH -- 1,849 12,301 -- 6 1,849 12,307
Dividend Drive.. 1 Columbus, OH -- 449 3,712 -- -- 449 3,712
International
Street.......... 1 Columbus, OH -- 517 2,657 -- -- 517 2,657
Port Road....... 2 Franklin County, OH -- 1,402 10,085 -- -- 1,402 10,085
Twin Creek
Drive........... 1 Columbus, OH -- 702 3,416 -- -- 702 3,416
International
Road............ 2 Cincinnati, OH -- 2,041 9,833 -- -- 2,041 9,833
Kingsley Drive.. 2 Cincinnati, OH -- 2,766 9,519 -- 8 2,766 9,527
Lake Forest
Drive........... 2 Blue Ash, OH -- 2,320 9,482 -- -- 2,320 9,482
Creek Road...... 1 Blue Ash, OH -- 902 2,790 -- -- 902 2,790
Brackbill Blvd.. 2 Mechanicsburg, PA 6,870 3,722 14,226 -- -- 3,722 14,226
Cumberland
Parkway......... 1 Harrisburg, PA -- 1,851 11,317 -- -- 1,851 11,317
Ritter Road..... 1 Mechanicsburg, PA 1,433 332 1,934 -- -- 332 1,934
Pilot Drive..... 1 Memphis, TN -- 1,364 6,231 -- -- 1,364 6,231
Airline Drive... 2 Coppell, TX -- 1,012 5,999 -- -- 1,012 5,999
DFW Trade
Center.......... 3 Grapevine, TX -- 5,273 45,755 -- 141 5,273 45,896
Luna Road....... 1 Carrollton, TX -- 1,020 6,097 -- -- 1,020 6,097
113th Street.... 1 Arlington, TX -- 506 2,055 -- -- 506 2,055
North Lake
Drive........... 1 Coppell, TX -- 1,165 4,914 -- -- 1,165 4,914
10th Street..... 2 Plano, TX -- 1,677 6,532 -- -- 1,677 6,532
Diplomat Drive,
Building 1...... 1 Farmers Branch, TX -- 110 2,456 -- -- 110 2,456
Oakville
Industrial
Park............ 6 Alexandria, VA -- 5,720 13,736 -- -- 5,720 13,736
Nokes
Boulevard....... 1 Sterling, VA -- 1,344 4,799 -- -- 1,344 4,799
Kent West
Corporate Park
II.............. 1 Kent, WA -- 2,528 9,256 -- 17 2,528 9,273
Kent West
Corporate Park
I............... 4 Kent, WA -- 1,549 5,691 -- 10 1,549 5,701
--- ------- -------- -------- --- ------ ----------- -----------
206 $48,206 $199,145 $872,441 $-- $1,089 $ 199,145 $ 873,530
=== ======= ======== ======== === ====== =========== ===========
<CAPTION>
Date Depreciable
Accumulated Constructed/ Date Lives
Property Name(s) Total(1) Depreciation Renovated Acquired in Years
- ---------------- ---------- ------------ ------------ -------- -----------
<S> <C> <C> <C> <C> <C>
Equity Drive.... 9,246 (166) 1980 02/04/98 10-40
Westbelt Drive.. 14,156 (294) 1979 02/04/98 10-40
Dividend Drive.. 4,161 (87) 1980 02/04/98 10-40
International
Street.......... 3,174 (61) 1988 02/04/98 10-40
Port Road....... 11,487 (238) 1995 02/04/98 10-40
Twin Creek
Drive........... 4,118 (78) 1989 02/04/98 10-40
International
Road............ 11,874 (247) 1990 02/04/98 10-40
Kingsley Drive.. 12,293 (150) 1981 06/09/98 10-40
Lake Forest
Drive........... 11,802 (246) 1978 02/04/98 10-40
Creek Road...... 3,692 (73) 1983 02/04/98 10-40
Brackbill Blvd.. 17,948 (349) 1984 02/17/98 10-40
Cumberland
Parkway......... 13,168 (248) 1992 02/06/98 10-40
Ritter Road..... 2,266 (43) 1986 02/04/98 10-40
Pilot Drive..... 7,595 (143) 1987 02/04/98 10-40
Airline Drive... 7,011 (137) 1990 02/04/98 10-40
DFW Trade
Center.......... 51,169 (964) 1996 02/04/98 10-40
Luna Road....... 7,117 (139) 1997 02/04/98 10-40
113th Street.... 2,561 (47) 1979 02/04/98 10-40
North Lake
Drive........... 6,079 (122) 1982 02/04/98 10-40
10th Street..... 8,209 (91) 1997 06/10/98 10-40
Diplomat Drive,
Building 1...... 2,566 (56) 1997 02/04/98 10-40
Oakville
Industrial
Park............ 19,456 (316) 1955 02/04/98 10-40
Nokes
Boulevard....... 6,143 0 1998 12/15/98 10-40
Kent West
Corporate Park
II.............. 11,801 (212) 1989 02/04/98 10-40
Kent West
Corporate Park
I............... 7,250 (130) 1989 02/04/98 10-40
---------- ------------
$1,072,675 $(17,290)
========== ============
</TABLE>
- -----
(1) The aggregate cost for federal income tax purposes as of December 31, 1998
was approximately $1,057 million.
F-22
<PAGE>
CABOT INDUSTRIAL PROPERTIES, L.P.
Schedule III -- Real Estate and Accumulated Depreciation (continued)
December 31, 1998
Reconciliation of Real Estate
The changes in total investment in real estate assets for the year ended
December 31, 1998, are as follows:
<TABLE>
<CAPTION>
December 31,
1998
------------
(in 000's)
<S> <C>
Balance, Beginning of Year................................... $ --
Acquisitions................................................. 1,077,994
Improvements................................................. 1,089
Disposition of Assets........................................ (6,408)
----------
Balance, End of Year......................................... $1,072,675
==========
</TABLE>
Reconciliation of Accumulated Depreciation
The changes in accumulated depreciation for the year ended December 31,
1998, are as follows:
<TABLE>
<CAPTION>
December 31,
1998
------------
(in 000's)
<S> <C>
Balance, Beginning of Year................................... $ --
Depreciation Expense......................................... 17,396
Disposition of Assets........................................ (106)
-------
Balance, End of Year......................................... $17,290
=======
</TABLE>
F-23
<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 Cabot Trust'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 the 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 Cabot Trust'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 the persons against the 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 insurance or other
arrangement may be procured, maintained or established within the Trust or
with any insurer or other person deemed
II-1
<PAGE>
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. 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 the
insurance or other arrangement shall not be subject to voidability, nor
subject the Trustees approving the insurance or other arrangement to
liability on any ground, regardless of whether Trustees participating and
approving the insurance or other arrangement shall be beneficiaries
thereof."
Cabot Trust has entered into indemnity agreements with each of its officers
and Trustees which provide for reimbursement of all expenses and liabilities of
the officer or Trustee, arising out of any lawsuit or claim against the officer
or Trustee due to the fact that the person was or is serving as an officer or
Trustee, except for the 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 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 the 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 post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of the 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 the 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 the 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
the 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 the 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 the 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
the indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of the 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 the securities at that time shall be deemed to be
the initial bona fide offering thereof.
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 Amendment No. 1
to the Registration Statement to be signed on their behalf by the undersigned,
thereunto duly authorized, in the City of Boston, State of Massachusetts, on
the 22nd day of March, 1999.
CABOT INDUSTRIAL TRUST
/s/ Neil E. Waisnor
By: _________________________________
Neil E. Waisnor
Senior Vice President
CABOT INDUSTRIAL PROPERTIES, L.P.
By: Cabot Industrial Trust, as
general partner
/s/ Neil E. Waisnor
By: _________________________________
Neil E. Waisnor
Senior Vice President
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, March 22, 1999
______________________________________ Chief Executive Officer,
Ferdinand Colloredo-Mansfeld Trustee (Principal
Executive Officer)
/s/ Robert E. Patterson* President, Trustee March 22, 1999
______________________________________
Robert E. Patterson
/s/ Franz Colloredo-Mansfeld* Chief Financial Officer and March 22, 1999
______________________________________ Senior Vice President
Franz Colloredo-Mansfeld (Principal Financial
Officer)
/s/ Neil E. Waisnor Senior Vice President-- March 22, 1999
______________________________________ Finance, Treasurer,
Neil E. Waisnor Secretary (Principal
Accounting Officer)
/s/ Christopher C. Milliken* Trustee March 22, 1999
______________________________________
Christopher C. Milliken
/s/ Maurice Segall* Trustee March 22, 1999
______________________________________
Maurice Segall
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ W. Nicholas Thorndike* Trustee March 22, 1999
____________________________________
W. Nicholas Thorndike
/s/ Ronald L. Skates* Trustee March 22, 1999
____________________________________
Ronald L. Skates
</TABLE>
/s/ Neil E. Waisnor
*By:
------------------------------
Neil E. Waisnor
As attorney-in-fact
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 Cabot Trust, dated
January 26, 1998 (incorporated by reference to Exhibit 3.1 to Cabot
Trust'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 Cabot Trust's Form 8-K filed on September 16, 1998).
4.3 Second Amended and Restated Agreement of Limited Partnership of Cabot
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 Cabot Trust
and the persons listed on the signature page thereto (included as
Exhibit B to Exhibit 4.10).
4.9 Form of Registration Rights and Lock-Up Agreement, between Cabot Trust
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 Trust,
dated as of October 10, 1997, among Cabot Trust, Cabot L.P., Cabot
Partners Limited Partnership 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 to be entered into among Cabot L.P., Cabot Trust and
The Bank of New York, as trustee.
5.1 Opinion of Mayer, Brown & Platt as to the validity of the securities
being registered.
5.2 Opinion of Ballard Spahr Andrews & Ingersoll, LLP regarding the
validity of the securities being registered.**
8.1 Opinion of Mayer, Brown & Platt as to tax matters.
12.1 Statement re: Computation of Ratio of Earnings to Fixed Charges and
Preferred Distributions (Cabot Trust).
12.2 Statement re: Computation of Ratio of Earnings to Combined Fixed
Charges (Cabot L.P.).
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
opinion 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 as originally filed).
25.1 Statement of Eligibility of Trustee on Form T-1.
</TABLE>
- --------
* To be filed by amendment or incorporated by reference in connection with an
offering of the related securities.
** Previously filed.
<PAGE>
Exhibit 4.11
================================================================================
CABOT INDUSTRIAL PROPERTIES, L.P.,
Issuer
AND
CABOT INDUSTRIAL TRUST,
Guarantor
TO
THE BANK OF NEW YORK,
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
Commission........................................................... 3
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 Request 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<C>
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
SECTION 612. Trustee's Application for Instructions from the
Operating Partnership or the Company..................... 57
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE,OPERATING PARTNERSHIP AND
COMPANY..................................................................... 58
SECTION 701. Disclosure of Names and Addresses of Holders............. 58
SECTION 702. Reports by Trustee....................................... 58
</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
SECTION 705. Statement by Officers as to Default...................... 58
SECTION 706. Original Issue Discount.................................. 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 THE BANK OF NEW YORK, a New York banking
corporation, as Trustee hereunder (hereinafter called the "Trustee"), having its
-------
Corporate Trust Office at 101 Barclay Street, New York, New York 10286.
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 101 Barclay Street, New York, New York
10286.
"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.
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"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
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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
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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
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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 New
York. 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
16
<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:
17
<PAGE>
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
Date: By:_________________________________
Authorized Signatory
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.
18
<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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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.
22
<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 signatory, 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 the mailing of a Notice of Redemption of Securities to be redeemed and
ending on such mailing date; 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 the mailing of a Notice of Redemption for
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
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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
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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
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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
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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
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<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 disposed of by the Trustee
in accordance with its procedures for the disposition of cancelled securities in
effect as of the date of such disposition and, upon the written request of the
Operating Partnership and the Company, 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
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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
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(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
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<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
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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.
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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
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(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
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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.
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Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.
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;
45
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(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
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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.
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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
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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, and no implied covenants
or obligations shall be read into this Indenture against the Trustee;
(2) the Trustee may conclusively 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, conclusively 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 at the sole cost of the Operating
Partnership and shall incur as liability or additional liability of any
kind by reason of such inquiry or investigation;
(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 thereof or unless written notice
of such event or fact is received by the Trustee at the Corporate Trust
Office of the Trustee, and such notice references the Securities and this
Indenture;
(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; and
(12) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in
each of its capacities hereunder, and to each agent, custodian and other
Person employed to act hereunder.
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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<PAGE>
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 such compensation
as the Operating Partnership or the Company and the Trustee shall from time
to time agree in writing 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 and
their agents for, and to hold them 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.
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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.
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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
<PAGE>
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.
56
<PAGE>
Dated: THE BANK OF NEW YORK,
as Trustee
By:_______________________________,
as Authenticating Agent
By:_______________________________
Authorized Officer
SECTION 612. Trustee's Application for Instructions from the Operating
Partnership or the Company.
Any application by the Trustee for written instructions from the Operating
Partnership or the Company may, at the option of Trustee, set forth in writing
any action proposed to be taken or omitted by the Trustee under this Indenture
and the date on and/or after which such action shall be taken or such omission
shall be effective. The Trustee shall not be liable for any action taken by,
or omission of, the Trustee in accordance with a proposal included in such
application on or after the date specified in such application (which date shall
not be less than three Business Days after the date any officer of the Operating
Partnership or the Company actually receives such application, unless any such
officer shall have consented in writing to any earlier date) unless prior to
taking any such action (or the effective date in the case of an omission), the
Trustee shall have received written instructions in response to such application
specifying the action to be taken or omitted.
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
<PAGE>
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.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officer's Certificates).
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.
SECTION 705. Statement by Officers as to Default.
The Operating Partnership shall deliver to the Trustee, as soon as possible
and in any event within five days after the Operating Partnership becomes aware
of the occurrence of any Event of Default or an event which, with notice or the
lapse of time or both, would constitute an Event of Default, an Officers'
Certificate setting forth the details of such Event of Default or default and
the action which the Operating Partnership proposes to take with respect
thereto.
SECTION 706. Original Issue Discount.
The Operating Partnership shall provide to the Trustee on a timely basis
such information as the Trustee requires to enable the Trustee to prepare and
file any form required to be submitted by the Operating Partnership with the
Internal Revenue Service and the Holders of any Securities relating to original
issue discount, including, without limitation, Form 1099-OID or any successor
form.
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
61
<PAGE>
(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
62
<PAGE>
(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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<PAGE>
(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.
64
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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 London, England, 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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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 London,
England, 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 New York, New York and
initially appoints the Trustee at its Corporate Trust Office as Paying Agent in
such city and as its agent to receive all such presentations, surrenders,
notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, if and so long as the Securities of any series (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 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 facsimile transmission or letter;
provided, however, that such 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 New York, New York, 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 New York, New York 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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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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<PAGE>
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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<PAGE>
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]
CABOT INDUSTRIAL TRUST,
As Guarantor
By: ______________________________________
[Name]
[Title]
THE BANK OF NEW YORK
As Trustee
By: ______________________________________
[Name]
[Title]
90
<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
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<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:
92
<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-1
<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-2
<PAGE>
Exhibit 5.1
March 19, 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
March 19, 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. In addition, this opinion is based on applicable law and
our knowledge and understanding of relevant factual matters as of the date
hereof.
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
March 19, 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), 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
<PAGE>
Cabot Industrial Trust
March 19, 1999
Page 4
and (g) the Depositary Shares are 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), 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),
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
March 19, 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), 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
March 19, 1999
Page 6
Very truly yours,
MAYER, BROWN & PLATT
<PAGE>
Exhibit 8.1
[Mayer, Brown & Platt letterhead]
March 19, 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 factual 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
March 19, 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 factual
representations set forth in the Officer's Certificate or in the Organizational
Documents or any of the factual, financial or statistical 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
March 19, 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 Year
Ended
December 31,
1998
-------------
<S> <C>
Income (loss) from continuing operations
before minority interest expense and
earnings from equity investments................. $ 50,727
Plus interest expense and amortization
of deferred financing costs...................... 7,009
-----------
Earnings before minority interest
expense and fixed charges........................ $ 57,736
===========
Fixed charges and preferred stock
dividends (b), (c)............................... $ 7,968
===========
Ratio of earnings to combined fixed charges
and preferred stock dividends.................... 7.25x
===========
</TABLE>
- ----------------------
(a) The Company completed its initial public offering on February 4, 1998.
(b) There was no preferred stock outstanding during the period ended
December 31, 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 Year
Ended
December 31,
1998
-------------
<S> <C>
Income (loss) from continuing operations before
earnings from equity investments................. $ 50,727
Plus interest expense and amortization
of deferred financing costs...................... 7,009
-----------
Earnings before fixed charges....................... $ 57,736
===========
Fixed charges and preferred
distributions (b), (c)........................... $ 7,968
===========
Ratio of earnings to combined fixed charges
and preferred distributions...................... 7.25x
===========
</TABLE>
- ----------------------
(a) The Operating Partnership commenced operations on February 4, 1998.
(b) There were no preference securities outstanding during the period ended
December 31, 1998.
(c) Fixed charges consist of interest expense (including amortization of
deferred financing costs) and capitalized interest.
<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 Amendment No. 1 to this registration
statement of Cabot Industrial Trust and Cabot Industrial Properties, L.P. on
Form S-3 and to all references to our firm included in Amendment No. 1 to this
registration statement.
Arthur Andersen LLP
New York, New York
March 18, 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 February 9, 1999 (except with repsect to the matters discussed in Note 13,
as to which the date is March 8, 1999) Cabot Partners Limited Partnership, dated
March 27, 1998, Cabot Industrial Properties, L.P., dated February 9, 1999
(except with respect to the matters discussed in Note 13, as to which the date
is March 8, 1999) 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 Amendment No. 1 to this registration statement of Cabot
Industrial Trust and Cabot Industrial Properties, L.P. on Form S-3 and to all
references to our Firm included in Amendment No. 1 to this registration
statement.
Arthur Andersen LLP
Boston, Massachusetts
March 18, 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 Amendment No. 1
to this registration statement on Form S-3 of Cabot Industrial Trust and Cabot
Industrial Properties, L.P,.
KPMG LLP
Chicago, Illinois
March 18, 1999
<PAGE>
EXHIBIT 23.4.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in 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 which report is included in Cabot Industrial Trust's
registration statement on Form S-11 (No. 333-61543). We also consent to the
reference to our firm under the caption "Experts."
PricewaterhouseCoopers LLP
New York, New York
March 18, 1999
<PAGE>
EXHIBIT 23.4.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the registration statement of
Cabot Industrial Trust and Cabot Industrial Properties, L.P. 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 which
report is included in Cabot Industrial Trust's registration statement on Form
S-11 (No. 333-61543). We also consent to the reference to our firm under the
caption "Experts."
PricewaterhouseCoopers LLP
Atlanta, Georgia
March 18, 1999
<PAGE>
==============================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
CABOT INDUSTRIAL PROPERTIES, L.P.
(Exact name of obligor as specified in its charter)
Delaware 04-3397874
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
CABOT INDUSTRIAL TRUST
(Exact name of obligor as specified in its charter)
Maryland 04-3397866
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Two Center Plaza, Suite 200
Boston, Massachusetts 02108
(Address of principal executive offices) (Zip code)
_____________
Debt Securities
(Title of the indenture securities)
========================================================================
