<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 2, 1999
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________________
CAPITAL AUTOMOTIVE REIT
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
MARYLAND 6798 54-1870224
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification Number)
organization)
</TABLE>
SEE TABLE OF ADDITIONAL REGISTRANT
__________________________
1420 SPRING HILL ROAD, SUITE 525
MCLEAN, VIRGINIA 22102
(703) 288-3075
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
___________________
THOMAS D. ECKERT, PRESIDENT AND CHIEF EXECUTIVE OFFICER, CAPITAL AUTOMOTIVE REIT
1420 SPRING HILL ROAD, SUITE 525
MCLEAN, VIRGINIA 22102
(703) 288-3075
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
With a copy to:
JOHN B. WATKINS, ESQUIRE
WILMER, CUTLER & PICKERING
2445 M STREET, N.W.
WASHINGTON, D.C. 20037
(202) 663-6000
___________________
Approximate date the registrant proposes to begin selling securities
to the public: From time to time after the effective date of this registration
statement.
____________________
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 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. [_]
<PAGE>
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CALCULATION OF REGISTRATION FEE
=============================================================================================================================
PROPOSED MAXIMUM
TITLE OF SECURITIES AMOUNT PROPOSED MAXIMUM AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED TO BE REGISTERED(1) OFFERING PRICE PER SECURITY PRICE(2) REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Shares of
Beneficial Interest, Debt
Securities, $200,000,000 (2) $200,000,000 $55,600
Preferred Shares of
Beneficial Interest,
Warrants (3).................
=============================================================================================================================
</TABLE>
(1) In no event will the aggregate maximum offering price of all Securities
registered under this Registration Statement exceed $200,000,000. The Securities
registered hereunder may be issued in any class or series and may be offered
and sold separately or in units with other Securities registered hereunder.
(2) The proposed maximum offering price per Security has been omitted pursuant
to General Instruction II.D of Form S-3 and the Company will establish the
proposed maximum offering price per Security if and when it offers Securities
registered under this Registration Statement.
(3) Subject to footnote (1), there is being registered an indeterminate number
of Common Shares, Preferred Shares and Warrants at indeterminate prices and an
indeterminate number of Common Shares or Preferred Shares as may be issuable at
indeterminate prices upon the exercise of any Warrants and upon the conversion,
redemption or exchange of any convertible, redeemable or exchangeable
Securities registered hereunder, as the case may be.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL IT FILES A FURTHER
AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT IS TO
BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OR UNTIL
THE REGISTRATION STATEMENT BECOMES EFFECTIVE ON THE DATE THE SEC, ACTING UNDER
SECTION 8(A), DETERMINES.
================================================================================
<PAGE>
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<CAPTION>
TABLE OF ADDITIONAL REGISTRANTS
JURISDICTION IRS
REGISTRANT OF ORGANIZATION SIC CODE EMPLOYER NUMBER
- ---------- --------------- -------- ---------------
<S> <C> <C> <C>
Capital Automotive L.P. Delaware 6798 54-1882000
</TABLE>
<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 2, 1999
- --------------------------------------------------------------------------------
The information in this prospectus is not complete and may be changed. The
Company 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 the offer or sale is not permitted.
- --------------------------------------------------------------------------------
PROSPECTUS
$200,000,000
[LOGO] CAPITAL AUTOMOTIVE REIT
COMMON SHARES, PREFERRED SHARES, DEBT SECURITIES AND WARRANTS
Capital Automotive REIT is a self-administered and self-managed Maryland
real estate investment trust formed to invest in the real property and
improvements used by operators of multi-site, multi-franchised motor vehicle
dealerships and motor vehicle related businesses predominantly located in major
metropolitan areas throughout the United States. Through this prospectus,
Capital Automotive REIT may periodically offer common shares of beneficial
interest, preferred shares of beneficial interest, debt securities or warrants.
The aggregate initial public offering price of the securities that Capital
Automotive REIT may offer through this prospectus will be up to $200,000,000.
Capital Automotive REIT will describe the specific terms of these securities in
supplements to this prospectus.
Please read this prospectus and the applicable supplement carefully before
you invest.
______________________
YOU SHOULD BE AWARE THAT AN INVESTMENT IN THE SECURITIES OF THE COMPANY INVOLVES
VARIOUS RISKS. SEE "RISK FACTORS" ON PAGE 1 AND IN THE COMPANY'S CURRENT REPORT
ON FORM 8-K FILED ON FEBRUARY 26, 1999, WHICH IS INCORPORATED IN THIS PROSPECTUS
BY REFERENCE FOR A DISCUSSION OF CERTAIN FACTORS THAT YOU SHOULD CONSIDER BEFORE
BUYING THE SECURITIES OFFERED BY THIS PROSPECTUS.
______________________
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is March _, 1999.
<PAGE>
TABLE OF CONTENTS
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Page No.
--------
About this Prospectus..................................................... i
Risk Factors.............................................................. 1
Subordination and Priority Liens..................................... 1
Fraudulent Conveyance Matters........................................ 2
Releases of Guarantees............................................... 3
Terms of Indebtedness................................................ 3
Dependence on Subsidiaries........................................... 4
No Public Trading Market............................................. 4
The Company............................................................... 5
Use of Proceeds........................................................... 7
Market Price of Common Shares............................................. 7
Ratio of Earnings to Fixed Charges........................................ 8
Description of Debt Securities............................................ 8
Description of Shares of Beneficial Interest.............................. 32
Description of the Partnership Agreement.................................. 47
Federal Income Tax Consequences........................................... 50
Plan of Distribution...................................................... 75
Legal Matters............................................................. 77
Experts................................................................... 77
Where You Can Find More Information....................................... 77
</TABLE>
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that Capital Automotive
REIT (the "Company") filed with the Securities and Exchange Commission (the
"SEC") utilizing a "shelf" registration process. Under this shelf process, the
Company may sell any combination of the securities described in this prospectus
in one or more offerings up to a total dollar amount of $200 million. This
prospectus provides you with a general description of the securities the Company
may offer. Each time the Company offers and sells securities, it will provide a
prospectus supplement that will contain specific information about all of the
terms of that offering. The prospectus supplement may also add, update or
change information contained in this prospectus. You should read both this
prospectus and any prospectus supplement together with additional information
described under the heading "Where You Can Find More Information."
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This prospectus, including the documents incorporated by reference,
contains forward-looking statements within the meaning of Section 27A of the
Securities Act. Also, documents subsequently filed by Capital Automotive REIT
with the SEC and incorporated by reference will contain forward-looking
statements. When the Company refers to forward-looking statements or
information, sometimes the Company uses words such as "may," "will," "could,"
"should," "plans," "intends," "expects," "believes," "estimates," "anticipates"
and "continues." In particular, the risk factors included or incorporated by
reference in this prospectus describe forward-looking information. The risk
factors are not all inclusive, particularly with respect to possible future
events. Other parts of, or documents incorporated by reference into, this
prospectus may also describe forward-looking information. Many things can
happen that can cause actual results to be very different than those described
by the Company. The Company makes no promise to update any of the Company's
forward-looking statements, or to publicly release the results if the Company
revises any of them.
Unless the context otherwise requires, the term the Company refers to
Capital Automotive REIT and the term the Partnership refers to Capital
Automotive L.P. The term Capital Automotive Group refers to the Company and the
Partnership and their subsidiaries. In this prospectus, the term "subsidiary"
of the Company or the Partnership means a corporation, partnership, limited
liability company or similar entity if the Company or the Partnership, alone or
together, directly or indirectly own at least a majority of the equity interests
of the entity.
RISK FACTORS
You should carefully review the following risks and the risk factors
incorporated by reference from the Company's Form 8-K filed on February 26,
1999, as well as the other information in this prospectus or referred to in
this prospectus, before buying the Company's securities.
SUBORDINATION AND PRIORITY LIENS - IF YOU PURCHASE DEBT SECURITIES, YOU WILL BE
AN UNSECURED CREDITOR BEHIND HOLDERS OF THE COMPANY'S MORE SENIOR DEBT, SOME OF
WHOM HOLD SECURITY INTERESTS IN CAPITAL AUTOMOTIVE GROUP'S ASSETS.
Subordinated Debt Securities. Subordinated debt securities offered through
this prospectus will be junior in payment to all present and future senior debt.
This means that the Company must pay all present and future senior debt before
the Company pays amounts due to holders of subordinated debt securities if the
Company liquidates, dissolves, reorganizes or goes through a similar process.
After making these senior payments, the Company may not have enough assets
remaining to pay the amounts that it owes you.
The Company will describe what debt is defined as "senior" with respect to
any subordinated debt securities the Company offers in a prospectus supplement.
Senior debt, however, will generally include bank debt (whether the Company
incurs the debt before or after the Company issues any subordinated debt
securities) and certain other debt that the Company incurs before the Company
issues any subordinated debt securities.
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Subordinated debt securities offered through this prospectus will rank
equally with other subordinated debt securities. This means that if (after
payment of all senior and secured debt) the Company's remaining assets are not
enough to pay all subordinated debt, subordinated debt securities offered
through this prospectus would share in the Company's remaining assets
proportionately with the other subordinated debt.
In addition, unless the Company says otherwise in a prospectus supplement,
the Company will be prohibited from making any payments on subordinated debt if
the Company fails to make required payments on certain senior debt (the Company
will identify senior debt in a prospectus supplement). If this happened, the
Company would not be able to resume payments on subordinated debt until all
required payments on the senior debt had been made. Unless the Company says
otherwise in a prospectus supplement, all payments on subordinated debt
securities may also be prohibited for up to 179 days if there is a default
(other than by failing to make required payments) on the senior debt the Company
identifies in a prospectus supplement. This later prohibition may be extended if
a default on the senior debt requires the senior debt to be paid in full.
Senior Debt Securities. Senior debt securities offered through this
prospectus may not be secured by any of Capital Automotive Group's assets. Some
of the properties owned by Capital Automotive Group already secure the debt of
certain subsidiaries of the Partnership. Therefore, if the Company liquidates,
dissolves, reorganizes or goes through a similar process, senior debt securities
will only be paid out of assets of the debtor and any guarantor that have not
been pledged as security for other obligations of Capital Automotive Group.
Structural Subordination. Both senior and subordinated debt securities
will be the Company's direct obligations and (unless guaranteed by the
Partnership or other subsidiaries of the Company) not obligations of the
Partnership or other subsidiaries of the Company. If the Company liquidates,
dissolves, reorganizes or goes through a similar process, the Company will only
be able to make payments to holders of senior or subordinated debt securities
after all obligations of the Partnership or other subsidiaries of the Company
are repaid. All subsidiary guarantees will be unsecured obligations of the
guarantor. Even if the senior or subordinated debt securities are guaranteed by
subsidiaries, the senior and subordinated debt securities will only receive
payment after all secured debt and (in the case of subordinated debt securities)
all senior debt of the guarantor is repaid.
FRAUDULENT CONVEYANCE MATTERS - A COURT COULD INVALIDATE OR SUBORDINATE THE
GUARANTEES ASSOCIATED WITH THE COMPANY'S DEBT SECURITIES AND REQUIRE YOU TO
RETURN PAYMENTS YOU MAY HAVE RECEIVED FROM THE GUARANTORS.
A court could apply so-called "fraudulent conveyance" laws to invalidate or
subordinate any guarantees of the Partnership or any other subsidiaries of the
Company. If this happens and you own the Company's debt securities, the
protection afforded to you by the guarantees will be
2
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eliminated or reduced. You will be left with claims only against the Company, or
a subordinated claim against the Partnership and the other subsidiaries (if any)
that issued the guarantees.
A court could invalidate a guarantee of the Partnership or another
subsidiary if it found that the Partnership or the subsidiary intended to
defraud creditors or improperly gave you better rights to repayment than the
Partnership or the subsidiary gave other creditors. It could also invalidate
the guarantee if it found that the Partnership or the subsidiary did not receive
fair consideration for the guarantee and was insolvent, was rendered insolvent,
had inadequate capital, or planned to incur debts knowing it could not repay
them. In conducting its analysis, a court is also likely to consider what
benefits the Partnership or another subsidiary received as a result of the
Company's issuance of the debt securities.
RELEASES OF GUARANTEES - THE COMPANY CAN RELEASE THE PARTNERSHIP OR ANY OF ITS
SUBSIDIARIES FROM ANY OBLIGATIONS TO YOU IF THE PARTNERSHIP AND ITS SUBSIDIARIES
ARE SOLD.
If the Company sells or transfers its interest in the Partnership or any
subsidiary of Capital Automotive Group to a third party, or if the Partnership
or such subsidiary sells substantially all of its assets, the Company may
release the Partnership and such subsidiaries from any guarantees they made of
any of the Company's debt, including debt securities offered through this
prospectus. The assets of the Partnership or such guarantors would no longer
be available to satisfy the Company's obligations under its debt securities.
TERMS OF INDEBTEDNESS - THE COMPANY'S FLEXIBILITY IS LIMITED BY PROMISES THAT
CAPITAL AUTOMOTIVE GROUP HAS MADE TO OTHER LENDERS.
Capital Automotive Group's existing financing agreements prevent certain of
the subsidiaries that have incurred the debt from incurring any other
indebtedness or using the properties owned by those subsidiaries to secure any
other obligations. Those agreements also limit the applicable subsidiary's
ability to sell those properties. Accordingly, those subsidiaries will not be
guarantors of any debt securities issued under this prospectus.
Future financing arrangements may contain additional restrictions and
tests. These restrictions and tests may prevent the Company from taking action
that could increase the value of the Company's securities, or may require
actions that decrease the value of securities. If Capital Automotive Group
defaults on any obligations, creditors could require immediate payment of the
obligations or foreclose on collateral. If this happened, Capital Automotive
Group could be forced to sell assets or take other action that would reduce the
value of the Company's securities.
3
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DEPENDENCE ON SUBSIDIARIES - THE COMPANY WILL NOT BE ABLE TO MAKE PAYMENTS ON
ITS SECURITIES UNLESS IT RECEIVES PAYMENTS FROM ITS SUBSIDIARIES.
Substantially all the Company's cash generating operations are carried on
through the Partnership and other subsidiaries. Accordingly, the Company will
only be able to make payments on securities offered through this prospectus to
the extent it receives funds from the Partnership and subsidiaries of Capital
Automotive Group. Agreements governing indebtedness of some of the Capital
Automotive Group's subsidiaries may limit the ability of those subsidiaries to
make payments to the Company.
NO PUBLIC TRADING MARKET - IF THERE IS NO PUBLIC MARKET FOR SECURITIES OFFERED
THROUGH THIS PROSPECTUS, YOU MAY HAVE DIFFICULTY SELLING THE SECURITIES.
The Company may use this prospectus to offer securities for which no public
market exists. If no public market exists at the time of your purchase, the
Company cannot be certain an active market will develop, or continue even if one
does develop. If there is no public market for the securities, you may find
that you cannot sell them for the price you paid, or may not be able to sell
them at all. Even if a market does develop and continue, the Company cannot
predict how easily you will be able to convert your securities to cash.
The development of a market for securities you may buy through this
prospectus, and the prices at which the securities will trade in such a market,
will depend on many factors beyond the Company's control, including:
. market interest rates and the markets for similar securities;
. general economic conditions; and
. the financial condition, historic financial performance and future
prospects of Capital Automotive Group.
In particular, you should be aware of the following regarding trading
prices for the securities:
. preferred shares may trade below their liquidation preference; and
. debt securities may trade below their principal amount.
4
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THE COMPANY
The Company is a Maryland real estate investment trust formed in October
1997. The Company owns its property interests through the Partnership and its
subsidiaries. The Company is the sole general partner of the Partnership. The
Company closed its initial public offering of common shares and began generating
rental income in February 1998.
Capital Automotive Group's primary business purpose is to own and lease
real estate properties (land, buildings and other improvements) used by
operators of new and used automobile and truck dealerships, motor vehicle
auctioneers, motor vehicle service, repair or parts businesses and related
businesses. In this prospectus, Capital Automotive Group uses the term
"dealerships" to refer to these types of businesses that are operated on its
properties.
As of February 1, 1999, Capital Automotive Group owned 131 properties
located in 18 states, making up approximately 760 acres of land and containing
approximately 4.8 million square feet of buildings and improvements. Capital
Automotive Group's lessees operate 203 motor vehicle franchises on these
properties, representing 36 brands of motor vehicles, including Acura, Audi,
BMW, Buick, Cadillac,Chevrolet, Chrysler, Dodge, Dodge Trucks, Ford,
Freightliner, GMC, Honda, Hyundai, Infiniti, Isuzu, Jaguar, Jeep, Kia, Land
Rover, Lexus, Lincoln-Mercury, Mazda, Mercedes-Benz, Mitsubishi, Nissan,
Oldsmobile, Plymouth, Pontiac, Porsche, Saab, Saturn, Subaru, Toyota, Volkswagen
and Volvo.
Capital Automotive Group focuses on buying properties from third parties
that have a long history of operating dealerships at several locations. In
addition, Capital Automotive Group prefers that the lessee has rights (known in
the business as "franchises") to sell and does sell new automobiles and trucks
from more than one motor vehicle manufacturer. In this prospectus, Capital
Automotive Group uses the term "dealer group" to refer to a group of related
persons and companies who sell properties to Capital Automotive Group. Capital
Automotive Group also uses the term "dealer group" or the term "lessee" to refer
to the person or company that leases a property owned by Capital Automotive
Group.
As of February 1, 1999, Capital Automotive Group has invested
approximately $565 million in properties. Most of the properties have been
purchased from dealer groups who then lease back the properties or otherwise
contract to have the properties leased to related persons. In certain cases,
Capital Automotive Group may lease property to a lessee that is not related to
the seller from whom the property was purchased.
Capital Automotive Group purchases properties with cash, units of limited
partnership interest in the Partnership, assumption of debt or a combination of
all three. Capital Automotive usually pays off any assumed debt in full at
closing. In certain cases, Capital Automotive Group assumes a dealer group's
responsibilities under an existing mortgage as part of the purchase of real
estate. At times, Capital Automotive Group has agreed in advance to purchase
property in the future after the dealership buildings have been constructed.
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Capital Automotive Group generally leases properties to established,
creditworthy lessees, for a period of 10 to 20 years, with options to renew for
one or more additional periods of 5 to 10 years each. The lessee typically is
required to pay all operating expenses of the property, including all real
estate taxes and assessments, utilities, insurance, repairs, maintenance and
other expenses. This type of lease is commonly known as a "triple-net" lease.
In evaluating dealer groups and potential properties for purchase, Capital
Automotive Group considers such factors as:
. the value of the land, buildings and other improvements as determined
by Capital Automotive Group and its consultants, but not by an
independent MAI appraisal;
. the quality and experience of the dealer group;
. the adequacy of a dealer group's historical, current and forecasted
cash flow to meet the operating needs of the business, expenses and
lease or debt service obligations;
. the construction quality, condition and design of the dealership
buildings and other improvements located on the property;
. the geographic area in which the property is located;
. the type of franchises operated by the dealer group; and
. the environmental condition of the real estate.
Capital Automotive Group intends to acquire more properties. Those
transactions may be structured in ways that are similar to those described
above. The transactions may also be structured differently.
Capital Automotive Group has and will continue to borrow funds to buy
properties. Borrowing arrangements can take different forms. For example, as of
February 20, 1999, Capital Automotive Group had mortgage indebtedness totaling
$162 million secured by 64 properties owned by subsidiaries of the Partnership.
Capital Automotive Group also intends to enter into revolving credit
arrangements. Capital Automotive Group may also issue debt securities, including
senior or subordinated notes. These notes may be secured by properties or
leases. Capital Automotive Group has adopted a policy to limit debt to
approximately 50% of assets. This policy may be changed by the Company's Board
of Trustees at any time without shareholder approval.
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As a real estate investment trust, the Company acquires properties through
its direct and indirect subsidiaries, including the Partnership, and manages its
business in a manner that is consistent with the requirements of the Internal
Revenue Code (the "Code") and the regulations of the Internal Revenue Service
(the "IRS") that govern taxation of real estate investment trusts. The Company
has and expects to continue to pay regular cash dividends to its shareholders;
to provide its shareholders the opportunity for increased dividends from
increasing annual rental income; to preserve and to protect the investments of
its shareholders; and to provide its shareholders with the opportunity to
increase the value of their investments.
The Company is self-administered and self-managed, meaning that its
trustees, officers and employees manage and administer Capital Automotive
Group's business. The Company's executive officers are Thomas D. Eckert,
President and Chief Executive Officer; Scott M. Stahr, Executive Vice President
and Chief Operating Officer; Donald L. Keithley, Executive Vice President of
Business Development; David S. Kay, Vice President and Chief Financial Officer;
John M. Weaver, Vice President, Secretary and General Counsel; and Peter C.
Staaf, Vice President and Treasurer.
The Company's principal executive offices are located at 1420 Spring Hill
Road, Suite 525, McLean, Virginia 22102. The Company's telephone number is
(703) 288-3075.
USE OF PROCEEDS
The Company will describe the use of proceeds from the sale of securities
in the applicable prospectus supplement. The Company will contribute the gross
proceeds of a sale of securities to the Partnership in exchange for
substantially identical securities of the Partnership. The Partnership will use
the net proceeds from the sale of securities for one or more of the following:
. repayment of indebtedness;
. acquisition of additional properties; and
. general corporate purposes.
MARKET PRICE OF COMMON SHARES
The common shares have been trading on the Nasdaq National Market under the
symbol "CARS" since February 13, 1998. The Company has listed below the high
and low sales prices of the common shares as reported on the Nasdaq National
Market and the distributions declared by the Company for the periods indicated.
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<CAPTION>
HIGH LOW DISTRIBUTION
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FISCAL YEAR ENDED DECEMBER 31, 1998
First fiscal quarter (from February 13, 1998) $ 19 3/4 $16 1/4 $0.076
Second fiscal quarter 19 3/8 13 1/8 0.210
Third fiscal quarter 15 3/4 10 7/8 0.270
Fourth fiscal quarter 14 7/8 8 13/16 0.320
FISCAL YEAR ENDING DECEMBER 31, 1999
First fiscal quarter (to February 25, 1999) $15 3/16 $11 1/4
</TABLE>
On February 25, 1999, the last reported sales price on the Nasdaq National
Market was $11.75 per share and there were approximately 34 holders of record
of the common shares of the Company.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for the fiscal year ended December
31, 1998 was 9.96 to 1. The ratio of earnings to fixed charges was computed by
dividing earnings by fixed charges. For this purpose, earnings consist of net
income (loss) before minority interest plus fixed charges. Fixed charges consist
of interest expense and amortization of debt issuance costs.
DESCRIPTION OF DEBT SECURITIES
The Company may use this prospectus to offer debt securities. If the
Company offers debt securities, the Company will prepare and distribute a
prospectus supplement that describes the specific terms of the debt securities.
In this section of the prospectus, the Company describes the general terms it
expects all debt securities to have. The Company also identifies some of the
specific terms that will be described in a prospectus supplement. Although the
Company expects that any debt securities the Company offers with this prospectus
will have the general terms it describes in this section, its debt securities
may have terms that are different from or inconsistent with the general terms it
describes here. Therefore, you should read the prospectus supplement carefully.
GENERAL TERMS OF DEBT SECURITIES
Unless the Company says otherwise in a prospectus supplement, debt
securities it offers through this prospectus:
. Will be its general, direct and unsecured obligations;
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. May or may not be guaranteed by the Partnership and one or more of the
Company's other subsidiaries; and
. May be either senior debt securities or subordinated debt securities.
Senior debt securities will rank equally with all of the Company's other
unsecured and unsubordinated obligations. Subordinated debt securities will be
subordinate and junior in right of payment to all of the Company's present and
future senior debt in the manner the Company describes in a prospectus
supplement.
If the debt securities are guaranteed by the Partnership or another
subsidiary, unless the Company says otherwise in a prospectus supplement, the
guarantee:
. Will be the guarantor's general, direct and unsecured contingent
obligation;
. If a guarantee of senior debt securities, will rank equal with all
other unsecured and senior obligations of the guarantor; and
. If a guarantee of subordinated debt securities, will be subordinate
and junior in right of payment to all of the guarantor's present and
future senior debt.
The Company may use this prospectus to offer up to $200 million worth of
debt securities, and Capital Automotive Group may incur additional indebtedness,
subject to limitations in the agreements governing Capital Automotive Group's
bank loans and other notes Capital Automotive Group may have issued.
Unless the Company says otherwise in a prospectus supplement:
. Debt securities the Company offers through this prospectus will not
limit the amount of indebtedness that Capital Automotive Group may
incur;
. You will not have any protection if any member of Capital Automotive
Group engages in a highly leveraged transaction, a restructuring, a
transaction involving a change in control, or a merger or similar
transaction that may adversely affect holders of the debt securities;
and
. The Company will not list the debt securities on any securities
exchange.
THE INDENTURES
Any debt securities the Company offers through this prospectus will be
issued under an indenture between the Company and a trustee. The Company has
filed with the SEC two "base indentures" that are exhibits to the registration
statement that includes this prospectus. The
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Senior Indenture describes the general terms of senior debt securities the
Company may issue. The Subordinated Indenture includes additional terms
describing subordination provisions of subordinated debt securities. The
Indentures will be subject to the Trust Indenture Act of 1939, as amended.
The base indentures do not include all the terms of debt securities the
Company may issue through this prospectus. If the Company issues debt
securities through this prospectus, its Board of Trustees will establish the
additional terms for each series of debt securities. The additional terms will
be set forth in a supplemental indenture or in a resolution of the Company's
Board of Trustees. The base indentures describe the additional terms that may
be established and the Company summarizes the additional terms that may be
established under "--Additional Terms of Debt Securities," below.
The Company has summarized the provisions of the base senior indenture and
the base subordinated indenture below. The summary is not complete. You should
read the indentures for provisions that may be important to you. The extent, if
any, to which the provisions of the base indentures apply to particular debt
securities will be described in the prospectus supplement. You should read the
prospectus supplement for more information regarding any particular issuance of
debt securities.
ADDITIONAL TERMS OF DEBT SECURITIES
As described above, the terms of a particular series of debt securities the
Company offers through this prospectus will be established by its Board of
Trustees when the Company issues the series. The Company will describe the
terms of the series in a prospectus supplement. The base indentures provide
that the terms that may be established include the following:
1. Title. The title of the debt securities offered.
2. Amount. Any limit upon the total principal amount of the series of debt
securities offered.
3. Maturity. The date or dates on which the principal of and premium, if
any, on the offered debt securities will mature or the method of
determining such date or dates.
4. Interest Rate. The rate or rates (which may be fixed or variable) at
which the offered debt securities will bear interest, if any, or the
method of calculating such rate or rates.
5. Interest Accrual. The date or dates from which interest, if any, will
accrue or the method by which such date or dates will be determined.
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6. Interest Payment Dates. The date or dates on which interest, if any,
will be payable and the record date or dates to determine the persons
who will receive payment.
7. Place of Payment. The place or places where principal of, premium, if
any, and interest, if any, on the offered debt securities will be
payable or at which the offered debt securities may be surrendered for
registration of transfer or exchange.
8. Optional Redemption. The period or periods within which, the price or
prices at which, the currency or currencies if other than in U.S.
dollars (including currency unit or units) in which, and the other
terms and conditions upon which, the offered debt securities may be
redeemed (or called away), in whole or in part, at the Company's
option.
9. Mandatory Redemption. The obligation, if any, the Company has to
redeem or repurchase the offered debt securities pursuant to any
sinking fund or similar provisions or upon the happening of a
specified event or at the option of a holder; and the period or
periods within which, the price or prices at which, the currency or
currencies (if other than in U. S. dollars) (including currency unit
or units) in which, and the other terms and conditions upon which,
such offered debt securities shall be redeemed or purchased, in whole
or in part.
10. Denominations. The denominations in which the offered debt securities
are authorized to be issued.
11. Currency. The currency or currency unit in which the offered debt
securities may be denominated and/or the currency or currencies
(including currency unit or units) in which principal of, premium, if
any, and interest, if any, on the offered debt securities will be
payable and whether the Company or the holders of the offered debt
securities may elect to receive payments in respect of the offered
debt securities in a currency or currency unit other than that in
which the offered debt securities are stated to be payable.
12. Indexed Principal. If the amount of principal of, or premium, if any,
or interest on, the offered debt securities may be determined with
reference to an index or pursuant to a formula or other method, the
manner in which such amounts will be determined.
13. Payment on Acceleration. If other than the principal amount, the
portion of the principal amount of the offered debt securities which
will be payable upon declaration of the acceleration of the maturity
or the method by which such portion shall be determined.
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14. Special Rights. Provisions, if any, granting special rights to the
holders of the offered debt securities if certain specified events
occur.
15. Events of Default. Any addition to, or modification or deletion of,
any event of default or any of the covenants specified in the
indenture with respect to the offered debt securities.
16. Tax "Gross-Up." The circumstances, if any, under which the Company
will pay additional amounts on the offered debt securities held by
non-U.S. persons for taxes, assessments or similar charges.
17. Registered or Bearer Form. Whether the offered debt securities will
be issued in registered or bearer form or both.
18. Dates of Certificates. The date as of which any bearer securities of
the series and any temporary global security representing outstanding
securities are dated, if other than the original issuance date of the
offered debt securities.
19. Forms. The forms of the securities and interest coupons, if any, of
the series.
20. Registrar and Paying Agent. If other than the trustee under the
indenture, the identity of the registrar and any paying agent for the
offered debt securities.
21. Defeasance. The application, if any, of such means of defeasance or
covenant defeasance as may be specified for the offered debt
securities.
22. Global Securities. Whether the offered debt securities are to be
issued in whole or in part in the form of one or more temporary or
permanent global securities and, if so, the identity of the
depositary or its nominee, if any, for such global security or
securities and the circumstances under which beneficial owners of
interests in the global security may exchange such interests for
certificated debt securities to be registered in the names of or to
be held by such beneficial owners or their nominees.
23. Documentation. If the offered debt securities may be issued or
delivered, or any installation of principal or interest is payable,
only upon receipt of certain certificates or other documents or
satisfaction of other conditions in addition to those specified in
the indenture, the form of such certificates, documents or
conditions.
24. Payees. If other than as provided in the applicable indenture, the
person to whom any interest on any registered security of the series
will be payable and the manner
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in which, or the person to whom, any interest on any bearer
securities of the series will be payable.
25. Definitions. Any definitions for the offered debt securities of that
series that are different from or in addition to the definitions
included in the base indenture, including, without limitation, the
definition of "unrestricted subsidiary" to be used for such series.
26. Subordination. In the case of the subordinated indenture, the
relative degree to which the offered debt securities shall be senior
to or be subordinated (or junior) to other debt securities, whether
currently outstanding or to be offered in the future, and to other
indebtedness, in right of payment.
27. Guarantees. Whether the offered debt securities are guaranteed and,
if so, the identity of the guarantors and the terms of the offered
guarantees (including whether and the extent to which the guarantees
are subordinated to other indebtedness of the guarantors).
28. Optional Redemption. The terms, if any, upon which the Company may be
able to redeem (or call away) the offered debt securities prior to
their maturity including the dates on which such redemptions may be
made and the price at which such redemptions may be made.
29. Conversion. The terms, if any, upon which the offered debt securities
may be converted or exchanged into or for the common shares,
preferred shares or other securities or property.
30. Restrictions. Any restrictions on the registration, transfer or
exchange of the offered debt securities.
31. Other Terms. Any other terms not inconsistent with the terms of the
indentures pertaining to the offered debt securities or which may be
required or advisable under the U. S. laws or regulations or
advisable (as the Company determined) in connection with marketing of
securities of the series.
FORM OF SECURITIES AND RELATED MATTERS
Registered or Bearer Form
Debt securities may be offered in either registered or bearer form.
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. If the debt securities are in registered form, the Company may treat
the person who is named in the register as the owner of the debt
securities for all purposes, including payment, exchange and transfer;
and
. If the Company issues debt securities in bearer form, the Company will
issue such debt securities only to non-U.S. persons and may treat the
bearer of the securities as the owner for all purposes.
If the Company issues debt securities in bearer form, the Company will
describe special offering restrictions and material U.S. federal income tax
consequences in a prospectus supplement.
Denominations
Unless the Company says otherwise in a prospectus supplement, the Company
will issue debt securities in denominations of:
. U.S. $1,000 (or multiples of $1,000) if the Company issues the debt
securities in registered form; and
. U.S. $5,000 (or multiples of $5,000) if the Company issues debt
securities in bearer form.
Payment Currencies and Indexed Securities
The Company may offer debt securities for which:
. The purchase price is payable in a currency other than U.S. dollars;
. The securities are denominated in a currency other than U.S. dollars;
or
. The principal or interest or any other payment is in a currency other
than U.S. dollars.
The other currency may be a currency unit comprised of various currencies
(like the European Currency Unit or "ECU"). Payments on debt securities might
also be based on an index.
Payment, Transfer and Exchange
Unless the Company says otherwise in a prospectus supplement, the
Company will maintain an office or agency for paying principal, interest and
other amounts on the debt securities. The Company will notify you where that
office is and if the location of the office
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changes. At the Company's option, however, the Company may make any interest
payments on debt securities in registered form by:
. Mailing checks to you at the addresses you specify, or
. Wire transfer of immediately available funds to an account you
specify.
Unless the Company says otherwise in a prospectus supplement, the Company
will pay interest to the person whose name is in the register at the close of
business on the regular record date for such interest.
The Company will describe in a prospectus supplement how the Company will
pay amounts owing on bearer securities. The Company will only pay amounts owing
on bearer securities at an office outside the United States.
Unless the Company says otherwise in a prospectus supplement, the Company
will transfer or exchange debt securities issued in registered form at an agency
that it designates. You may transfer or exchange debt securities without
service charge, although the Company may require you to pay any related tax or
other governmental charge.
GLOBAL SECURITIES
The Company may issue debt securities of a series in the form of one or
more fully registered global securities. Each registered global security will:
. Be registered in the name of a depositary or a nominee for the
depositary;
. Be deposited with the depositary or nominee or a custodian therefor;
and
. Bear a legend regarding the restrictions on exchanges and registration
of transfer and any such other appropriate matters.
If the Company issues a registered global security, the Company will only
transfer or exchange it for another global security issued to the depositary,
its successor or their nominees, until the Company issues securities in
definitive form.
After the Company issues a registered global security and deposits that
registered global security with or on behalf of the depositary, the depositary
will credit on its book-entry registration and transfer system the respective
principal amounts of the debt securities represented by such registered global
security to the accounts of institutions that have accounts with the depositary.
The Company refers to institutions that have accounts with the depositary as
"participants." The underwriters or agents engaging in the distribution of the
debt securities will designate the accounts to be credited. The Company will
designate the accounts to be credited if
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the Company offers and sells the debt securities directly. You may only own a
beneficial interest in registered debt securities if you are a participant or
hold your interest through a participant. Your interest will be shown on, and
transfers of your interest will only be effected through, records maintained by
the depositary for the registered global security or by its nominee and/or
records maintained by the participants.
The Company will treat the depositary for a registered global security, or
its nominee as the sole owner or holder of the debt security represented by the
registered global security for all purposes under each indenture as long as it
is the owner of the debt security. Accordingly, if you own a beneficial
interest in a registered global security, you must rely on the procedures of the
depositary (and, if you are not a participant, you must rely on the procedures
of the participant through which you own your interest), to exercise any of your
rights under the indenture. The Company understands that under existing
industry practices, depositaries authorize participants to give or take
instructions or actions required or permitted under indentures, and participants
authorize beneficial owners owning through such participants to give or take
instructions or actions or act upon the instructions of beneficial owners
holding through them.
Unless the Company says otherwise in a prospectus supplement, the Company
will make payments with respect to principal, premium, if any, and interest, if
any, on the debt securities represented by a registered global security to the
depositary or its nominee, as the case may be. The Company expects that the
depositary will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the registered
global security. The Company also expects that participants will act pursuant
to standing instructions and customary practices. The Company, the respective
trustees and the Company's agents or agents of the respective trustees will not
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial interests in any registered global
security, or for maintaining, supervising or reviewing any records relating to
such beneficial interests.
Unless the Company says otherwise in a prospectus supplement, the Company
will issue debt securities in certificated form in exchange for a registered
global security:
. If the depositary for the registered global security ceases to be
registered as a clearing agency under applicable law or is not willing
or able to provide securities depositary services with respect to the
registered global security and a successor depositary is not appointed
by the Company within 90 days; or
. If an event of default, or an event which with the giving of notice or
lapse of time or both, would constitute an event of default, occurs
with respect to the debt securities represented by the registered
global security and such event of default continues for a period of 90
days.
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In addition, unless the Company says otherwise in a prospectus supplement,
the Company will have the right to not have any of the debt securities of a
series represented by one or more registered global securities. If the Company
makes that determination, the Company will issue debt securities of such series
in certificated form in exchange for all of the registered global securities
representing such series of debt securities.
You should note that the laws of some states may require that you take
physical delivery of global securities in definitive form. Such laws may impair
your ability to own, transfer or pledge beneficial interests in global
securities.
The debt securities of a series may also be issued in whole or in part in
the form of one or more bearer global securities (a "bearer global security")
that will be deposited with a depositary, or its nominee, identified in a
prospectus supplement. The Company may issue bearer global securities in
temporary or permanent form. The specific terms and procedures, including the
specific terms of the depositary arrangement, with respect to any portion of a
series of debt securities to be represented by one or more bearer global
securities will be described in a prospectus supplement.
CERTAIN COVENANTS
The Company will describe any material covenants in respect of any series
of debt securities in a prospectus supplement.
CONSOLIDATION, MERGER, SALE OF ASSETS
Unless the Company says otherwise in a prospectus supplement, each
indenture will provide that the Company will not, in a single transaction or a
series of related transactions, engage in any of the following transactions
unless the seven conditions that follow are satisfied. Accordingly, the Company
may not:
. consolidate with or merge with or into any other person; or
. sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets to any person or group
of affiliated persons;
. permit any of Capital Automotive Group's subsidiaries to enter into
any such transaction or transactions
if any of these transactions would result in a sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all property and assets
of the Company and its subsidiaries on a consolidated basis to any other person
or group of affiliated persons.
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In order to engage in any such transaction, the Company must satisfy the
following seven conditions:
1. Either
a. it must be the continuing company, or
b. the person (if other than the Company) formed by such
consolidation or into which it is merged, or the person that
acquires by sale, assignment, conveyance, transfer, lease or
disposition of all or substantially all assets of the Company and
its subsidiaries on a consolidated basis (the "surviving entity")
must be a corporation or a real estate investment trust duly
organized and validly existing under U.S. laws, any state or the
District of Columbia and such person assumes, by a supplemental
indenture in a form reasonably satisfactory to the trustee, all
obligations under the applicable debt securities and the
indenture, and the indenture shall remain in full force and
effect;
2. Immediately before and immediately after giving effect to such
transactions, no default or event of default under the debt securities
shall have occurred and be continuing;
3. Immediately after giving effect to such transaction on a pro forma
basis, the Company's consolidated net worth (as defined in the
applicable indenture) (or the surviving entity if the Company is not
the continuing obligor under the indenture) is equal to or greater
than its consolidated net worth immediately prior to such transaction;
4. Immediately before and immediately after giving effect to such
transaction on a pro forma basis (on the assumption that the
transaction occurred on the first day of the four-quarter period
immediately prior to the consummation of such transaction with the
appropriate adjustments with respect to the transaction being included
in such pro forma calculation), the Company (or the surviving entity
if the Company is not the continuing obligor under the indenture)
could incur $1.00 of additional indebtedness without violating any
applicable provisions of the indenture limiting indebtedness;
5. Each guarantor of the debt securities, if any, unless it is the other
party to the transactions described above, will have by supplemental
indenture confirmed that its guarantee will apply to such person's
obligations under the indenture and the debt securities;
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6. If any assets of the Company or any assets of any subsidiary would
become subject to any lien, any provisions of the indenture limiting
liens are complied with; and
7. The Company or the surviving entity has delivered, or caused to be
delivered, to the trustee, in form and substance reasonably
satisfactory to the trustee, an officers' certificate and an opinion
of counsel, each to the effect that such consolidation, merger,
transfer, sale, assignment, lease or other transaction and the
supplemental indenture in respect thereto comply with the provisions
of the indenture and that all conditions precedent provided for in the
indenture relating to such transaction have been met.
Unless the Company says otherwise in a prospectus supplement, each
indenture for debt securities that are guaranteed will provide for similar
restrictions on any guarantor.
SUBORDINATION
Generally
Unless the Company says otherwise in a prospectus supplement, the payment
of principal, premium and interest, if any, on subordinated debt securities will
be subordinated (or junior) to the prior payment in full of all of any present
and future senior indebtedness of Capital Automotive Group. This means that the
Company must pay all present and future senior debt before the Company pays
amounts due to holders of subordinated debt securities if the Company
liquidates, dissolves, reorganizes or goes through a similar process. After
making these payments, the Company may not have enough assets remaining to pay
the amounts due to you.
The Company will describe what debt is defined as "senior" with respect to
any subordinated debt securities the Company offers in a prospectus supplement,
but senior debt will generally include bank debt and certain other pre-existing
debts.
Payment Blockage for Payment Defaults
Unless the Company says otherwise in a prospectus supplement, if it has
defaulted in the payment of any "designated senior indebtedness," it may not:
. Pay any principal, premium or interest, if any, on subordinated debt
securities, or
. Purchase, redeem, defease, or otherwise acquire any subordinated debt
securities.
The Company will describe "designated senior indebtedness" in a prospectus
supplement. This prohibition will not affect any payment it has already made to
defease debt securities (as described under "Defeasance or Covenant Defeasance
of Indenture," below).
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The Company must resume payment on subordinated debt securities, and make
any payments it has missed, when one of the following has occurred:
. The designated senior indebtedness has been discharged or paid in
full;
. The holders of designated senior indebtedness have waived payment; or
. The payment default has otherwise been cured or ceased to exist.
Payment Blockage for Non-Payment Defaults
Unless the Company says otherwise in a prospectus supplement, it will also
be prohibited from paying any amounts or distributing any assets as described
with respect to payment defaults if:
. it has defaulted on designated senior indebtedness in a way that does
not involve a failure to pay amounts but accelerates payment; and
. it and the trustee for the subordinated debt securities have received
written notice of this default.
Unless the Company says otherwise in a prospectus supplement, it will be
required to suspend payments and distributions on the subordinated debt
securities starting when it receives notice of the applicable default. The
Company may and must resume payments, and make any payments it has missed, upon
the earliest of:
1. 179 days having elapsed since receipt of notice (unless it has
previously been required to pay all amounts owing on the applicable
designated senior indebtedness);
2. The date the default and all other similar defaults as to which notice
has been given shall have been cured, waived or shall have ceased to
exist;
3. The date the applicable designated senior indebtedness (and all other
designated senior indebtedness as to which notice has been given)
shall have been discharged or paid in full; and
4. The date on which it or the trustee receives written notice
terminating the period from the representative of holders of
designated senior indebtedness or the holders of at least a majority
of the designated senior indebtedness.
Any number of notices of non-payment defaults may be given, but during any
365-day consecutive period only one period may commence and the period may not
exceed 179 days. No
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non-payment default with respect to such senior indebtedness that existed or was
continuing on the date a blockage period commenced may be made the basis of
another blockage period whether or not within a period of 365 consecutive days,
unless such default has been cured or waived for not less than 90 consecutive
days.
Subsidiary Guarantees
The Company will tell you in a prospectus supplement whether and to what
extent debt securities will be guaranteed by the Partnership or any other
subsidiaries. Unless the Company says otherwise in a prospectus supplement, any
guarantee of subordinated debt securities will be an unsecured subordinated
obligation of the guarantor. As such, the guarantees will either rank on an
equal basis with or senior to all other existing and future indebtedness of the
guarantor that is expressly subordinated to senior indebtedness of the
subsidiary. Unless the Company says otherwise in a prospectus supplement:
1. Guarantees will be subordinated to the same extent as the debt
securities are subordinated to the Company's obligations; and
2. Payment on guarantees will be blocked in the same circumstances as
payment of the debt securities is blocked.
Structural Subordination
Debt securities may be offered without guarantees, and even if there are
guarantees, one or more of the Partnership or any other subsidiaries may not
join in the guarantee. If any non guarantor entity is involved in a
bankruptcy, liquidation or reorganization, the nonguarantor entity will pay the
holders of its debt and its trade creditors before it will be able to distribute
any assets to its parent. The indentures may not limit the amount of
indebtedness that these entities may incur. Therefore, you should only look to
the Company's assets and any assets of the guarantor entities for repayment of
obligations under the debt securities.
EVENTS OF DEFAULT
Unless the Company says otherwise in a prospectus supplement, each of the
following is an event of default:
1. A default in the payment of any interest on any debt security of that
series when it becomes due and payable, and such default continues for
a period of 30 days.
2. A default in the payment of the principal of (or premium, if any, on)
any debt security of that series at its maturity (upon acceleration,
optional or mandatory redemption, required purchase or otherwise).
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3. Any of the following:
(a) default in the performance, or breach, of any covenant or
agreement of the Company or any guarantor under the indenture
(other than a default in the performance, or breach of a covenant
or agreement which is specifically dealt with in clause (1) or
(2) above or in clause (b) of this clause (3)) and such default
or breach continues for a period of 30 days after written notice
has been given by certified mail:
(i) to the Company by the trustee;or
(ii) to the Company and the trustee by the holders of at
least 25% in aggregate principal amount of the
outstanding debt securities of the series.
(b) there shall be a default in the performance or breach of the
provisions of the indenture relating to consolidation, merger, or
sale of assets.
4. One or more defaults shall have occurred under any agreements,
indentures or instruments under which the Company, any guarantor or
certain other subsidiaries (identified in the indenture as restricted
subsidiaries) then has outstanding indebtedness in excess of $10
million in the aggregate if, as a result of the default, the full
amount of the indebtedness is due and owing.
5. Any guarantee shall for any reason cease to be, or be asserted in
writing by any guarantor or the Company not to be, in full force and
effect and enforceable in accordance with its terms, except to the
extent contemplated by the indenture and any such guarantee.
6. One or more judgments, orders or decrees for the payment of money in
excess of $10 million, either individually or in the aggregate (net of
amounts covered by insurance, bond, surety or similar instrument)
shall be entered against the Company, any guarantor or any restricted
subsidiary or any of their respective properties and shall not be
discharged and there shall have been a period of 60 consecutive days
during which a stay of enforcement of such judgment or order, by
reason of an appeal or otherwise, shall not be in effect.
7. Any holder or holders of at least $10 million in aggregate principal
amount of indebtedness, or the indebtedness of any guarantor or any
restricted subsidiary, shall, after a default under such indebtedness,
notify the trustee of the intended sale or disposition of any assets,
or the assets of any guarantor or any restricted subsidiary, that have
been pledged to or for the benefit of such holder or holders to secure
such indebtedness or shall commence proceedings, or take any action
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(including by way of set-off), to retain in satisfaction of such
indebtedness or to collect on, seize, dispose of or apply in
satisfaction of indebtedness, assets of the Company or any restricted
subsidiary (including funds on deposit or held pursuant to lock-box
and other similar arrangements).
8. There shall have been the entry by a court of competent jurisdiction
of:
(a) a decree or order for relief in respect of the Company, any
guarantor or any restricted subsidiary in an involuntary case or
proceeding, under any applicable bankruptcy law, or
(b) a decree or order adjudging the Company, any guarantor or any
restricted subsidiary bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment or composition of or in
respect of the Company, any guarantor or any restricted
subsidiary under any applicable federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Company, any
guarantor or any restricted subsidiary or of any substantial part
of their respective properties, or ordering the winding up or
liquidation of their affairs, and any such decree or order for
relief shall continue to be in effect, or any such other decree
or order shall be unstayed and in effect, for a period of 60
consecutive days; or
9. The Company, any guarantor, or any restricted subsidiary do any of the
following:
(a) commence a voluntary case or proceeding under any applicable
bankruptcy law or any other case or proceeding to be adjudicated
bankrupt or insolvent;
(b) consent to the entry of a decree or order for relief in respect
of the Company, any guarantor or such restricted subsidiary in an
involuntary case or proceeding under any applicable bankruptcy
law or to the commencement of any bankruptcy or insolvency case
or proceeding against it;
(c) file a petition or answer or consent seeking reorganization or
relief under any applicable federal or state law.
10. The Company, any guarantor, or any restricted subsidiary do any of the
following:
(a) consent to the filing of a petition for the appointment of, or
taking possession by, a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the
Company, any guarantor or
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such restricted subsidiary or of any substantial part of their
respective property;
(b) make an assignment for the benefit of creditors; or
(c) admit in writing the inability to pay debts generally as they
become due.
Waiver of Default
Unless the Company says otherwise in a prospectus supplement, holders of
not less than a majority of the debt securities of a series may waive any past
default except for:
. a payment default, and
. a default on any provision that requires the consent of all holders
to modify.
Acceleration of Payment
Unless the Company says otherwise in a prospectus supplement, each
indenture will provide that if an event of default (other than one of the events
specified in clauses 8, 9, and 10 above) occurs and continues, the trustee or
the holders of not less than 25% in aggregate principal amount of the debt
securities of the applicable series outstanding may, and the trustee at the
request of such holders shall, declare all unpaid principal of, premium, if any,
and accrued interest on, all the debt securities of the applicable series to be
due and payable immediately by a notice in writing to the Company (and to the
trustee if given by the holders of the debt securities of the applicable
series). The trustee may, then, at its discretion, proceed to protect and
enforce the rights of the holders of the applicable debt securities by
appropriate judicial proceeding. If an event of default specified in clauses 8,
9 and 10 above occurs and continues, then all the debt securities of the
applicable series shall without further action become and be immediately due and
payable, in an amount equal to the principal amount of the debt securities of
the applicable series, together with accrued and unpaid interest, if any, to the
date the debt securities become due and payable, without any declaration or
other act on the part of the trustee or any holder. The trustee or, if notice of
acceleration is given by the holders of the debt securities of the applicable
series, the holders of the debt securities of the applicable series shall give
notice to the agent under any credit agreement of such acceleration.
Waiver of Acceleration
Unless the Company says otherwise in a prospectus supplement, each
indenture will provide that, after a declaration of acceleration, but before a
judgment or decree for payment of the money due has been obtained by the
trustee, the holders of a majority in aggregate principal amount of the debt
securities, by written notice to the Company and the trustee, may rescind and
annul such declaration if:
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1. The Company has paid, or deposited with the trustee a sum sufficient
to pay,
a. all sums paid or advanced by the trustee under the indenture and
the reasonable compensation, expenses, disbursements and advances
of the trustee, its agents and counsel,
b. all overdue interest on all debt securities of the applicable
series,
c. the principal of and premium, if any, on any debt securities of
the applicable series which have become due otherwise than by
such declaration of acceleration and interest thereon at a rate
borne by the debt securities, and
d. to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate borne by the debt securities;
and
2. All events of default, other than the non-payment of principal of the
debt securities which have become due solely by such declaration of
acceleration, have been cured or waived.
Notices of Default
Unless the Company says otherwise in a prospectus supplement, each
indenture will provide that the Company is also required to notify the trustee
within 5 business days of the occurrence of any default. Unless the Company
says otherwise in a prospectus supplement, the Company is required to deliver to
the trustee, on or before a date not more than 60 days after the end of each
fiscal quarter and not more than 120 days after the end of each fiscal year, a
written statement as to compliance with the indenture, including whether or not
any default has occurred.
Obligations of Trustee
Unless the Company says otherwise in a prospectus supplement, the trustee
is under no obligation to exercise any of the rights or powers vested in it by
the indenture at the request or direction of any of the holders of the debt
securities unless such holders offer to the trustee security or indemnity
satisfactory to the trustee against the costs, expenses and liabilities which
might be incurred thereby.
The Trust Indenture Act of 1939 limits the trustee, should it become a
creditor to the Company or any guarantor, from obtaining payment of claims in
certain cases or realizing certain property received by it in respect to such
claims, as security or otherwise. The trustee is permitted to engage in certain
other transactions so long as if it acquires any conflicting interest, it must
cure the conflict if there occurs an event of default or else it must resign as
trustee.
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For information regarding the acceleration of a portion of the principal
amount of any original issue discount securities on the occurrence of an event
of default, please read the prospectus supplement relating to the issuance of
such securities
DEFEASANCE OR COVENANT DEFEASANCE OF INDENTURE
Unless the Company says otherwise in a prospectus supplement, it will be
able to discharge its obligations under debt securities and the obligations of
any guarantor of debt securities at any time by taking the actions described
below. The discharge of all obligations using this process is known as
"defeasance." If the Company defeases debt securities, all obligations under
the series of debt securities that is defeased will be deemed to have been
discharged, except for:
1. The rights of holders of outstanding debt securities to receive solely
from funds deposited for this purpose payments in respect of the
principal of, premium, if any, and interest on such debt securities
when such payments are due;
2. The obligations with respect to the debt securities concerning issuing
temporary debt securities, registration of debt securities, mutilated,
destroyed, lost or stolen debt securities, and the maintenance of an
office or agency for payment and money for security payments held in
trust;
3. The rights, powers, trusts, duties and immunities of the trustee;
4. The defeasance provisions of the indenture; and
5. If the debt security is convertible, the right of the holder to
convert the debt security pursuant to the terms of the debt security.
The Company will also be able to free itself from certain covenants that
are described in the indenture by taking the actions described below. This is
known as covenant defeasance. If the Company defeases covenants under debt
securities, then certain events (not including non-payment, enforceability of
any guarantee, bankruptcy and insolvency events) described under "--Events of
Default" will no longer constitute an event of default with respect to the debt
securities.
Unless the Company says otherwise in a prospectus supplement, in order to
exercise either defeasance or covenant defeasance:
1. The Company must irrevocably deposit with the trustee, in trust, for
the benefit of the holders of the debt securities, cash in U.S.
dollars, U.S. government obligations (as defined in the applicable
indenture), or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm
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of independent public accountants or a nationally recognized
investment banking firm expressed in a written certification thereof
delivered to the trustee, to pay and discharge the principal of,
premium, if any, and interest on the applicable debt securities on the
stated maturity of such principal or installment of principal or
interest (or on the "defeasance redemption date" as defined in the
prospectus supplement, if when exercising either defeasance or
covenant defeasance, the Company has delivered to the trustee an
irrevocable notice to redeem all of the outstanding debt securities of
the applicable series on the defeasance redemption date);
2. In the case of defeasance, the Company will deliver to the trustee an
opinion of independent counsel in the U.S. confirming that either:
(a) it has received from, or there has been published by, the
Internal Revenue Service a ruling, or
(b) since the date it issued the applicable debt securities,
there has been a change in the applicable federal income tax
law
the effect of either being that the holders of the outstanding debt
securities 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;
3. In the case of covenant defeasance, the Company will deliver to the
trustee an opinion of independent counsel in the U. S. to the effect
that the holders of the applicable debt securities 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;
4. No default or event of default shall have occurred and be continuing
on the date of such deposit or insofar as clause 7 or 8 under the
first paragraph under "--Events of Default" are concerned, at any time
during the period ending on the 91st day after the date of deposit;
5. Such defeasance or covenant defeasance shall not cause the trustee for
the applicable debt securities to have a conflicting interest with
respect to any securities of the Company or any guarantor;
6. Such defeasance or covenant defeasance shall not result in a breach or
violation of, or constitute a default under, the indenture or any
other material agreement or
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instrument to which the Company or any guarantor is a party or by
which it is bound;
7. The Company will deliver to the trustee an opinion of independent
counsel to the effect that:
(a) The trust funds will not be subject to any rights of holders of
senior indebtedness or guarantor senior indebtedness, including,
without limitation, those arising under the indenture, and
(b) 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;
8. The Company will deliver to the trustee an officers' certificate
stating that the deposit was not made by the Company with the intent
of preferring the holders of the debt securities or any guarantee over
other creditors or creditors of any guarantor with the intent of
defeating, hindering, delaying or defrauding creditors, creditors of
any guarantor or others;
9. No event or condition shall exist that would prevent the Company from
making payments of the principal of, premium, if any, and interest on
the debt securities on the date of such deposit or at any time ending
on the 91st day after the date of such deposit; and
10. The Company will deliver to the trustee an officers' certificate and
an opinion of independent counsel, each stating that all conditions
precedent provided for relating to either the defeasance or the
covenant defeasance, as the case may be, have been met.
MODIFICATIONS AND AMENDMENTS
Unless the Company says otherwise in a prospectus supplement, the Company,
any guarantor and the trustee may modify and amend the indenture with the
consent of the holders of a majority in aggregate principal amount of the
outstanding debt securities of all series affected by the modification or
amendment. The Company may not, however, modify or amend the indenture without
the consent of the holder of each outstanding debt security of all series
affected by the modification or amendment affected thereby if the modification
or amendment does any of the following:
1. Changes the stated maturity of the principal of, or any installment of
interest on, any debt security;
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2. Reduces the principal amount thereof or the rate of interest thereon
or any premium payable upon the redemption thereof;
3. Changes the coin or currency in which the principal of any debt
security or any premium or the interest thereon is payable;
4. Impairs the right to institute suit for the enforcement of any such
payment after the stated maturity thereof (or in the case of
redemption, on or after the redemption date);
5. Reduces the percentage in principal amount of outstanding debt
securities of a series, the consent of whose holders is required for
any such supplemental indenture, or the consent of whose holders is
required for any waiver or compliance with certain provisions of the
indenture or certain defaults or with respect to any guarantee;
6. Modifies any of the provisions relating to supplemental indentures
requiring the consent of holders or relating to the waiver of past
defaults or relating to the waiver of certain covenants, except to
increase the percentage in principal amount of outstanding debt
securities required for such actions or to provide that certain other
provisions of the indenture cannot be modified or waived without the
consent of the holder of each debt security affected thereby;
7. Except as otherwise permitted under "--Consolidation, Merger, Sale of
Assets," consents to the assignment or transfer by the Company or any
guarantor of any of its rights and obligations under the indenture; or
8. Amends or modifies any provisions of the indenture relating to the
subordination of the debt security or any guarantee in any manner
adverse to the holders of the debt securities or any guarantee.
Unless the Company says otherwise in a prospectus supplement, the Company,
any guarantor and the trustee may modify and amend the indenture without the
consent of the holders if the modification or amendment does only the following:
1. Causes each indenture to be qualified under the Trust Indenture Act or
adds provisions expressly required under the Trust Indenture Act;
2. Evidences the succession of another person to the Company, any
guarantor or other obligor upon the debt securities and the assumption
by any such successor of any covenants or the covenants of any
guarantor or other obligor upon the debt securities under the
indenture and in the debt securities of any series;
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3. Adds to any covenants or the covenants of any guarantor or other
obligor upon the debt securities for the benefit of the holders (and
if such covenants are to be for the benefit of less than all series of
debt securities, stating that such covenants are expressly being
included solely for the benefit of such series) or adds any additional
event of default to all or any series of debt securities, or
surrenders any right or power conferred upon the Company;
4. Secures the debt securities of any series;
5. Adds or changes any provisions to the extent necessary to facilitate
the issuance or administration of debt securities in bearer form or
facilitate the issuance or administration of debt securities in global
form;
6. Changes or eliminates any provision affecting only debt securities not
yet issued;
7. Establishes the form or terms of debt securities and guarantees of any
series;
8. Evidences and provides for successor trustees or adds or changes any
provisions of such indenture to the extent necessary to permit or
facilitate the appointment of a separate trustee or trustees for
specific series of debt securities;
9. Permits payment in respect of debt securities in bearer form in the
U.S. to the extent allowed by law;
10. Makes provisions with respect to any conversion or exchange rights of
holders not adverse to the holders of any debt securities of any
series then outstanding with such conversion or exchange rights, which
provision directly affects any such series, including providing for
the conversion or exchange of debt securities into common shares or
preferred shares;
11. Cures any ambiguity, corrects or supplements any provisions which may
be defective or inconsistent with any other provision, or makes any
other provisions with respect to matters or questions arising under
the indenture which shall not be inconsistent with the provisions of
the indenture; provided, however, that no such modification or
amendment may adversely affect the interest of holders of debt
securities of any series then outstanding in any material respect; or
12. If a debt security of any series is guaranteed, adds a guarantor
pursuant to the requirements of the indenture.
The holders of a majority in aggregate principal amount of the debt
securities of a series may waive compliance with certain restrictive covenants
and provisions of the indenture with respect to that series.
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ORIGINAL ISSUE DISCOUNT
The Company may issue debt securities under the indentures for less than
their stated principal amount. Such securities may be treated as "original
issue discount securities" and they may be subject to special tax consequences.
In addition, some debt securities that are offered and sold at their stated
principal amount may, under certain circumstances, be treated as issued at an
original issue discount for federal income tax purposes. The Company will
describe the federal income tax consequences and other special consequences
applicable to securities treated as original issue discount securities in the
prospectus supplement relating to such securities. "Original issue discount
security" means any debt security that:
. Does not provide for the payment of interest prior to maturity, or
. Is issued at a price lower than its face value and provides that upon
redemption or acceleration of its stated maturity an amount less than
its principal amount shall become due and payable.
NOTICES
Unless the Company says otherwise in a prospectus supplement, it will send
notices to holders of debt securities by mail to the holder's address as it
appears in the register.
GOVERNING LAW
Unless the Company says otherwise in a prospectus supplement, the
indenture, the debt securities and any guarantees will be governed by the laws
of the State of New York.
CONCERNING THE TRUSTEES
The Company will identify any relationship that it may have with the
trustee for a series of debt securities in a prospectus supplement with respect
to particular debt securities.
The holders of a majority in principal amount of all outstanding debt
securities of a series (or if more than one series is affected thereby, of all
series so affected, voting as a single class) will have the right to direct the
time, method and place of concluding any proceeding for exercising any remedy or
power available to the trustee for such series.
If the trustee knows of an event of default that occurs (and is not cured),
the trustee will be required to exercise such of the rights and powers vested in
it by the applicable indenture and will use the same degree of care and skill in
its exercise as a prudent person would exercise or use under the circumstances
in the conduct of his own affairs. Subject to these provisions, no trustee will
be under any obligation to exercise any of its rights or powers under the
applicable
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indenture at the request of any of the holders of debt securities unless they
shall have offered to such trustee security and indemnity satisfactory to it.
DESCRIPTION OF SHARES OF BENEFICIAL INTEREST
The Company is a Maryland real estate investment trust. Your rights as a
shareholder are governed by the Code of Maryland, including Title 8 of the
Corporations and Associations Article, the Company's Declaration of Trust and
the Company's Bylaws. The following summary of terms for the shares of
beneficial interest is not complete. You should read the Company's Declaration
of Trust and Bylaws for more complete information.
AUTHORIZED SHARES
The Company's Declaration of Trust allows it to issue up to 100 million
common shares of beneficial interest, par value $.01 per share, and 20 million
preferred shares of beneficial interest, par value $.01 per share. As of
February 10, 1999, the Company had 21,607,415 common shares outstanding and no
preferred shares outstanding.
Authority of the Board of Trustees. The Company's Declaration of Trust
allows the Board of Trustees to take the following actions without approval by
you or other shareholders:
. classify or reclassify any unissued common shares or preferred shares
into one or more classes or series of shares of beneficial interest;
. set or change the preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends or distributions,
qualifications or terms or conditions of redemption of any class or
series of shares of beneficial interest; and
. amend the Declaration of Trust to change the total number of shares of
beneficial interest or the number of shares of any class or series of
shares of beneficial interest.
However, if there are any laws or stock exchange rules which require the Company
to obtain shareholder approval in order for it to take these actions, the
Company will contact you and other shareholders to solicit that approval.
The Company believes that the power of the Board of Trustees to issue
additional shares of beneficial interest will provide it with greater
flexibility in structuring possible future financings and acquisitions and in
meeting other future needs. Although the Board of Trustees does not currently
intend to do so, it has the ability to issue a class or series of beneficial
share that could have the effect of delaying or preventing a change of control
of the Company that might involve a premium price for holders of common shares
or otherwise be favorable to them.
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Shareholder Liability. Under Maryland law, you will not be personally
liable for any obligation of the Company solely because you are a shareholder of
the Company. Under the Declaration of Trust the Company's shareholders are not
personally liable for the Company's debts or obligations and will not be
subject to any personal liability, in tort, contract or otherwise, to any person
in connection with the property or affairs of the Company by reason of being a
shareholder..
COMMON SHARES
All common shares offered through this prospectus will be duly authorized,
fully paid and nonassessable. As a shareholder, you will be entitled to receive
distributions on the shares you own if the Board of Trustees authorizes a
distribution out of the legally available assets of the Company. However, your
right to receive these distributions may be affected by the preferential rights
of any other class or series of shares of beneficial interest and the provisions
of the Company's Declaration of Trust regarding restrictions on the transfer of
shares of beneficial interest. For example, you may not receive distributions
if no funds are available for distribution after the Company pays dividends to
holders of preferred shares. You will also be entitled to receive distributions
based on the assets of the Company available for distribution to common
shareholders if we liquidate, dissolve or wind-up the Company. The amount you,
as an individual shareholder, would receive in the distribution would be
determined by your amount of beneficial ownership of the Company in comparison
with other beneficial owners. Assets will be available for distribution to
shareholders only after the Company has paid all known debts and liabilities of
the Company and paid the holders of any preferred shares the Company may issue.
Voting Rights. Each outstanding common share owned by a shareholder
entitles that holder to one vote on all matters submitted to a vote of
shareholders, including the election of trustees. The right to vote is subject
to the provisions of the Company's Declaration of Trust regarding the
restriction of the transfer of shares of beneficial interest, which we describe
under "Restrictions on Ownership and Transfer," below. There is no cumulative
voting 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, and the holders of the remaining shares will not be able to elect any
trustees.
As a holder of a common share, you will not have any right to:
. convert your shares into any other security;
. have any funds set aside for future payments;
. require the Company to repurchase your shares; or
. purchase any securities of the Company, if other securities are
offered for sale, other than as a member of the general public.
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Subject to the terms of the Declaration of Trust regarding the restrictions on
transfer of shares of beneficial interest, each common share has the same
dividend, distribution, liquidation and other rights as any other common share.
According to the terms of the Company's Declaration of Trust, Bylaws, and
Maryland law, all matters submitted to the shareholders for approval, except for
those matters listed below, are approved if a majority of all the votes cast at
a meeting of shareholders duly called and at which a quorum is present are voted
in favor of approval. The following matters require approval other than by a
majority of all votes cast:
1. the intentional disqualification of the Company as a real estate
investment trust or revocation of its election to be taxed as a real
estate investment trust (which requires the affirmative vote of the
holders of two-thirds of the number of common shares outstanding and
entitled to vote on such a matter),
2. the election of trustees (which requires a plurality of all the votes
cast at a meeting of shareholders of the Company at which a quorum is
present),
3. the removal of trustees (which requires the affirmative vote of the
holders of two-thirds of the number of common shares outstanding and
entitled to vote on such a matter),
4. the amendment of the Declaration of Trust by shareholders (which
requires the affirmative vote of a majority of votes entitled to be
cast on the matter, except under certain circumstances specified in
the Declaration of Trust that require the affirmative vote of two-
thirds of all the votes entitled to be cast on the matter),
5. the dissolution of the Company (which requires the affirmative vote of
two-thirds of all the votes entitled to be cast on the matter), and
6. the merger or consolidation of the Company with another entity or sale
of all or substantially all of the property of the Company (which
requires the approval of the Board of Trustees and an affirmative vote
of a majority of all the votes entitled to be cast on the matter).
The Company's Declaration of Trust permits the trustees by a two-thirds
vote to amend the Declaration of Trust from time to time to qualify as a real
estate investment trust under Maryland law without the approval of you or other
shareholders. The Declaration of Trust permits the Board of Trustees to amend
the Declaration of Trust to change the total number of shares of beneficial
interest or the number of shares of any class of shares of beneficial interest
that the Company has authority to issue without approval by you or other
shareholders.
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The common shares are traded on the Nasdaq National Market System under the
trading symbol "CARS."
PREFERRED SHARES
General. Preferred shares may be offered and sold from time to time, in
one or more series, as authorized by the Board of Trustees. The Board of
Trustees is required by Maryland law and the Declaration of Trust to set for
each series the terms, preferences, conversion or other rights, voting powers,
restrictions, limitations as to distributions, qualifications and terms or
conditions of redemption. The Board of Trustees has the power to set
preferences, powers and rights, voting or other terms of preferred shares that
are senior to, or better than, the rights of holders of common shares or other
classes or series of preferred shares. The offer and sale of preferred shares
could have the effect of delaying or preventing a change of control of the
Company that might involve a premium price for holders of common shares or
otherwise be favorable to them.
Terms. You should refer to the prospectus supplement relating to the
offering of any preferred shares for specific terms, including the following
terms:
. the title and stated value of such preferred shares;
. the number of preferred shares offered, the liquidation preference per
share and the offering price of such preferred shares;
. the dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculation of these terms applicable to such preferred shares;
. the date from which dividends on such preferred shares will
accumulate, if applicable;
. the procedures for any auction and remarketing, if any, for such
preferred shares;
. the provision for a sinking fund, if any, for such preferred shares;
. the provision for redemption, if applicable, of such preferred shares;
. any listing of such preferred shares on any securities exchange;
. the terms and conditions, if applicable, upon which such preferred
shares will be convertible into common shares, including the
conversion price or rate (or manner of calculation thereof);
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. any other specific terms, preferences, rights, limitations or
restrictions of such preferred shares;
. a discussion of federal income tax consequences applicable to such
preferred shares;
. the relative ranking and preference of such preferred shares as to
dividend rights and rights upon liquidation, dissolution or the
winding up of the Company's affairs;
. any limitations on issuance of any series of preferred shares ranking
senior to or on a parity with such series of preferred shares as to
dividend rights and rights upon liquidation, dissolution or the
winding up of the Company's affairs; and
. any limitations on direct or beneficial ownership and restrictions on
transfer, in each case as may be appropriate to preserve the Company's
status as a real estate investment trust.
All preferred shares offered through this prospectus, or issuable upon
conversion, exchange or exercise of securities, will, when issued, be fully paid
and non-assessable.
The terms of any preferred shares the Company issues through this
prospectus will be set forth in a supplement or amendment to the Company's
Declaration of Trust. The Company will file the supplement or amendment as an
exhibit to the registration statement that includes this prospectus, or as an
exhibit to a filing with the SEC that is incorporated by reference into this
prospectus. The description of preferred shares in any prospectus supplement
will not describe all of the terms of the preferred shares in detail. You
should read the applicable supplement or amendment to the Declaration of Trust
for a complete description of all of the terms.
DEPOSITARY SHARES
General. The Company will deposit the shares of any series of preferred
stock represented by depositary shares with a depositary under a deposit
agreement. The Company will identify the depositary in a prospectus supplement.
Subject to the terms of the deposit agreement, if you own a depositary share,
you will be entitled, in proportion to the fraction of a preferred share
represented by your depositary share, to all the rights and preferences that you
would be entitled to if you owned directly the preferred share represented by
your depositary share (including dividend, voting, redemption, subscription and
liquidation rights).
Dividends and Other Provisions. If you are a "record holder" (as defined
below) of depositary shares and the Company pays a cash dividend or other cash
distribution with respect to the preferred share represented by your depositary
share, the depositary will distribute all cash
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dividends or other cash distributions it receives in respect of preferred shares
in proportion to the numbers of depositary shares you owned.
If the Company makes a distribution in a form other than cash, the
depositary will distribute the property it receives to you and all other record
holders of depositary shares in an equitable manner, unless the depositary
determines that it is not feasible to do so. If the depositary decides it
cannot feasibly distribute the property, it may sell such property and
distribute the net proceeds from the sale. The amount distributed in any of the
foregoing cases may be reduced by any amounts required to be withheld by the
Company or the depositary on account of taxes.
A "record holder" is a person who holds depositary shares on the record
date for any dividend, distribution or other action. The record date for
depositary shares will be the same as the record date for the preferred stock
represented by the shares
Withdrawal of Preferred Shares. If you surrender your depositary receipts,
the depositary will be required to deliver certificates to you evidencing the
amount of preferred shares represented by those receipts (but only in whole
shares). If you deliver depositary receipts that evidence a number of
depositary shares that is greater than the number of whole shares to be
withdrawn, the depositary will deliver to you at the same time a new depositary
receipt evidencing the fractional shares.
Redemption of Depositary Shares. If the Company redeems a series of
preferred shares represented by depositary shares, the depositary will redeem
depositary shares from the proceeds it receives after redemption of the
preferred shares. The redemption price per depositary share will be equal to
the applicable fraction of the redemption price per share payable with respect
to such series of preferred shares. If fewer than all the depositary shares are
to be redeemed, the depositary will select shares to be redeemed by lot, pro
rata or by any other equitable method it may determine.
Voting the Preferred Shares. When the depositary receives notice of any
meeting at which the holders of preferred shares are entitled to vote, the
depositary will mail information contained in the notice to you as a record
holder of the depositary shares relating to the preferred shares. You will be
entitled to instruct the depositary as to how you would like your votes to be
exercised. The depositary will endeavor, insofar as practicable, to vote the
number of preferred shares represented by your depositary shares in accordance
with your instructions. The Company will agree to take all reasonable action
that the depositary may deem necessary to enable the depositary to do this. If
you do not send specific instructions the depositary will not vote the preferred
shares represented by your depositary shares.
Amendment and Termination of the Deposit Agreement. The Company and the
depositary may amend the form of depositary receipt and any provision of the
deposit agreement at any time. However, any amendment which materially and
adversely alters your rights as a
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holder of depositary shares will not be effective unless the holders of at least
a majority of the depositary shares then outstanding approve the amendment. The
deposit agreement will only terminate if
1. The Company redeems all outstanding depositary shares or
2. The Company makes a final distribution in respect of the preferred
shares, including in connection with any liquidation, dissolution or
winding up and the distribution has been distributed to the holders of
depositary shares.
Resignation and Removal of Depositary. The depositary may resign at any
time by delivering to the Company notice of its election to do so.
Additionally, the Company may remove the depositary at any time. Any
resignation or removal will take effect when the Company appoints a successor
depositary and the successor accepts the appointment. The Company must appoint
a successor depositary within 60 days after delivery of the notice of
resignation or removal. A successor depositary must be a bank or trust company
having its principal office in the U. S. and having a combined capital and
surplus of at least $50 million.
Charges of Depositary. The Company will pay all transfer and other taxes
and governmental charges arising solely from the existence of the depositary
arrangements. The Company will pay charges of the depositary in connection with
the initial deposit of the preferred shares and issuance of depositary receipts,
all withdrawals of preferred shares by owners of the depositary shares and any
redemption of the preferred shares. You will pay other transfer and other taxes
and governmental charges and such other charges as expressly provided in the
deposit agreement.
Miscellaneous. The depositary will forward to you all reports and
communications from the Company that the Company is required, or otherwise
determines, to furnish to the holders of the preferred shares.
Neither the Company nor the depositary will be liable under the deposit
agreement to you other than for the depositary's gross negligence, willful
misconduct or bad faith. Neither the Company nor the depositary will be
obligated to prosecute or defend any legal proceeding in respect of any
depositary shares or preferred shares unless satisfactory indemnity is
furnished. The Company and the depositary may rely upon written advice of
counsel or accountants, or upon information provided by persons presenting
preferred shares for deposit, holders of depositary receipts or other persons
believed to be competent and on documents believed to be genuine.
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RESTRICTIONS ON OWNERSHIP AND TRANSFER
Restrictions on ownership and transfer of shares are important to ensure
that the Company meets certain conditions under the Code to qualify as a REIT.
For example, the Code contains the following requirements.
. No more than 50% in value of a REIT's shares may be owned, actually or
constructively (based on attribution rules in the Code), by 5 or fewer
individuals during the last half of a taxable year or a proportionate
part of a shorter taxable year (the "5/50 Rule"). The 5/50 Rule did
not apply to the Company's first year as a REIT, but applies for years
after 1998. Under the Code, individuals include certain tax-exempt
entities except that qualified domestic pension funds are not
generally treated as individuals.
. If a REIT, or an owner of 10% or more of a REIT, is treated as owning
10% or more of a lessee of the REIT's property, the rent received by
the REIT from the lessee will not be "qualifying income" for purposes
of the REIT gross income tests of the Code.
. A REIT's stock or beneficial interests must be owned by 100 or more
persons during at least 335 days of a taxable year of 12 months or
during a proportionate part of a shorter taxable year. The 100 owner
rule also did not apply to the Company's first year as REIT, but
applies for years after 1998.
The Board of Trustees believes it is essential for the Company to continue to
qualify as a REIT. Therefore, the Declaration of Trust, subject to certain
exceptions described below, provides that no person may own, or be deemed to own
by virtue of the attribution provisions of the Code, more than 9.9% of the
outstanding common shares, preferred shares or any other series of capital
stock. In this prospectus, the term "Ownership Limitation" is used to describe
this provision of the Declaration of Trust.
Any transfer of common or preferred shares will be null and void, and the
intended transferee will acquire no rights in such common shares or preferred
shares if the transfer:
. results in any person owning, directly or indirectly, common shares or
preferred shares in excess of the Ownership Limitation;
. results in the common shares and preferred shares being owned by fewer
than 100 persons (determined without reference to any rules of
attribution);
. results in the Company being "closely held" (within the meaning of
Section 856(h) of the Code); or
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. causes the Company to own, directly or constructively, 10% or more of
the ownership interests in a tenant of the Company's or the
Partnership's real property (within the meaning of Section 856 (d) (2)
(B) of the Code).
Automatic Transfer of Shares to Trust. With certain exceptions described
below, the common shares or preferred shares will be designated as "Shares-in-
Trust" and transferred automatically to a trust (the "Share Trust") if any
purported transfer of common shares or preferred shares would violate any of the
four restrictions above which cause the transfer to be null and void. The
transfer to the Share Trust is effective as of the end of the business day
before the purported transfer of such common shares or preferred shares. The
record holder of the common shares or preferred shares that are designated as
Shares-in-Trust (the "Prohibited Owner") must deliver those shares to the
Company for registration in the name of the Share Trust. The Company will
designate a Share Trustee who is not affiliated with the Company. The
beneficiary of the Share Trust (the "Beneficiary") will be one or more
charitable organizations named by the Company.
Any Shares-in-Trust remain issued and outstanding common shares or
preferred shares and are entitled to the same rights and privileges as all other
shares of the same class or series. The Share Trust receives all dividends and
distributions on the Shares-in-Trust and holds such dividends and distributions
in trust for the benefit of the Beneficiary. The Share Trustee votes all
Shares-in-Trust. The Share Trustee may also designate a permitted transferee of
the Shares-in-Trust. The permitted transferee must purchase the Shares-in-Trust
for valuable consideration and acquire the Shares-in-Trust without resulting in
the transfer being null and void.
The Prohibited Owner with respect to Shares-in-Trust must pay the Share
Trust any dividends or distributions received by the Prohibited Owner (1) that
are attributable to any Shares-in-Trust and (2) the record date for which was on
or after the date that such shares became Shares-in-Trust. Upon sale or other
disposition of the Shares-in-Trust to a permitted transferee, the Prohibited
Owner generally will receive from the Share Trustee, the lesser of:
. the price per share, if any, paid by the Prohibited Owner for the
common shares or preferred shares, or if no amount was paid for such
shares (e.g., if such shares were received through a gift or devise),
the price per share equal to the market price (which is calculated as
defined in the Declaration of Trust) on the date the shares were
received;
. the price per share received by the Share Trustee from the sale of
such Shares-in-Trust.
Any amounts received by the Share Trustee in excess of the amounts paid to
the Prohibited Owner will be distributed to the Beneficiary. Unless sooner sold
to a permitted transferee, upon the liquidation, dissolution or winding up of
the Company, the Prohibited Owner generally will receive from the Share Trustee
its share of the liquidation proceeds but in
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no case more than the price per share paid by the Prohibited Owner or, in the
case of a gift or devise, the market price per share on the date such shares
were received.
The Shares-in-Trust will be offered for sale to the Company, or its
designee, at a price per share equal to the lesser of (1) the price per share in
the transaction that created such Shares-in-Trust (or, in the case of a gift or
devise, the market price per share on the date of such transfer) or (2) the
market price per share on the date that the Company, or its designee, accepts
such offer. The Company may accept such offer for a period of ninety days after
the later of (1) the date of the purported transfer which resulted in such
Shares-in-Trust or (2) the date the Company determines in good faith that a
transfer resulting in such Shares-in-Trust occurred.
Any person who acquires or attempts to acquire common shares or preferred
shares which would be null and void under the restrictions described above, or
any person who owned common shares or preferred shares that were transferred to
a Share Trust, must (1) give immediate written notice to the Company of such
event and (2) provide the Company such other information as requested in order
to determine the effect, if any, of such transfer on the Company's status as a
REIT.
If a shareholder owns more than 5% of the outstanding common shares and
preferred shares, then the shareholder must notify the Company of its share
ownership by January 30 of each year.
The Ownership Limitation generally does not apply to the acquisition of
common shares or preferred shares by an underwriter that participates in a
public offering of such shares. In addition, the Board of Trustees may exempt a
person from the Ownership Limitation under certain circumstances and conditions.
The Board may not grant an exemption from the Ownership Limit to any proposed
transferee whose ownership, direct or indirect, of shares of beneficial interest
of the Company in excess of the Ownership Limit would result in the termination
of the Company's status as a REIT. The restrictions described above will
continue to apply until (1) the Board of Trustees determines that it is no
longer in the best interests of the Company to attempt to qualify, or to
continue to qualify, as a REIT, and (2) there is an affirmative vote of two-
thirds of the votes entitled to be cast on such matter at a regular or special
meeting of the shareholders of the Company.
The Company has waived the Ownership Limitation with respect to Friedman,
Billings, Ramsey Group, Inc. and related persons to permit them to own the
common shares.
The Ownership Limitation could have the effect of delaying, deferring or
preventing a transaction or a change in control of the Company that might
involve a premium price for the common shares or preferred shares or otherwise
be in the best interest of the shareholders of the Company. All certificates
representing common shares or preferred shares will bear a legend referring to
the restrictions described above.
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WARRANTS
Outstanding Warrants. As of February 20, 1999, the Company had warrants
outstanding to acquire a total of 3,141,952 common shares. Warrants for a
total of 2,691,952 common shares were exercisable by the holders on that date.
Warrants for a total of 400,000 common shares will become exercisable for 25% of
the common shares each year over a four year period beginning on January 5,
2000. The warrant for the remaining 50,000 common shares will become exercisable
beginning on January 31, 2000. The warrants have been issued under written
warrant agreements. The exercise price of each outstanding warrant is $15.00
per common share. Warrants for a total of 2,741,952 common shares are for terms
of 5 years. Warrants for a total of 400,000 common shares are for terms of 10
years. Each warrant obligates the Company to file a registration statement
after the warrant has been exercised by the holder to register the common shares
if the holder so requests or if the Company files a registration statement for
its own shares.
New Warrants. The Company may issue additional warrants for the purchase
of common shares or preferred shares. If the Company offers warrants, it will
describe the terms in a prospectus supplement. Warrants may be offered
independently, together with other securities offered by any prospectus
supplement, or through a dividend or other distribution to shareholders and may
be attached to or separate from other securities. Warrants may be issued under
a written warrant agreement to be entered into between the Company or the holder
or beneficial owner, or the Company could issue warrants pursuant to a written
warrant agreement with a warrant agent. A warrant agent would act solely as an
agent of the Company in connection with the warrants of a particular series and
would not assume any obligation or relationship of agency or trust for or with
any holders or beneficial owners of such warrants.
The following are some of the warrant terms that could be described in a
prospectus supplement:
. the title of the warrant;
. the aggregate number of warrants;
. the price or prices at which the warrant will be issued;
. the designation, number and terms of the preferred shares or common
shares that may be purchased on exercise of the warrant;
. the designation and terms of any other securities that may be
purchased on exercise of the warrant;
. the date, if any, on and after which such warrant and the related
securities will be separately transferable;
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. the price at which each security purchasable on exercise of the
warrant may be purchased;
. the date on which the right to purchase the securities purchasable on
exercise of the warrant will begin and end;
. the minimum or maximum number of securities that may be purchased at
any one time;
. any anti-dilution protection;
. information with respect to book-entry procedures, if any;
. a discussion of certain federal income tax considerations; and
. any other warrant terms, including terms relating to transferability,
exchange or exercise of the warrant.
REGISTRATION RIGHTS AGREEMENTS
Under various agreements, including the Partnership's partnership
agreement, the Company has agreed to file a registration statement that covers:
. the resale of common shares upon exchange of units that were issued in
private placements at the time of and since the Company's formation;
and
. the resale of common shares upon exercise of warrants.
The Company must use its best efforts to maintain the effectiveness of
these registration statements. The exchange of outstanding securities for
common shares will increase the number of outstanding common shares and will
increase the Company's percentage ownership interest in the Partnership.
CERTAIN PROVISIONS OF MARYLAND LAW AND THE DECLARATION OF TRUST AND BYLAWS
The following summary of certain provisions of the Maryland General
Corporation Law and the Company's Declaration of Trust and Bylaws is not
complete. You should read Maryland General Corporation Law and the Company's
Declaration of Trust and Bylaws for more complete information. The business
combination provisions and the control share acquisition provisions of Maryland
law, both of which are discussed below, could have the effect of delaying or
preventing a change in control of the Company. Also, the removal of trustees
provisions of the Declaration of Trust and the advance notice provisions of the
Bylaws could have the effect of
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delaying or preventing a transaction or a change in control of the Company.
These provisions could have the effect of discouraging offers to acquire the
Company and of increasing the difficulty of consummating any such offer, even if
the offer contains a premium price for holders of common shares or otherwise
benefits shareholders.
Business Combinations. Maryland General Corporation Law prohibits the
Company from entering into "business combinations" and other corporate
transactions unless special actions are taken. The business combinations that
require such special actions include a merger, consolidation, share exchange,
or, in certain circumstances, an asset transfer or issuance of equity securities
when the combination is between the Company and an "interested shareholder" (as
defined below). An interested shareholder is (1) any person who beneficially
owns 10% or more of the voting power of the Company's shares or (2) any
affiliate of the Company which beneficially owned 10% or more of the voting
power of the Company's shares within 2 years prior to the date in question. We
may not engage in a business combination with an interested shareholder or any
of its affiliates for 5 years after the interested shareholder becomes an
interested shareholder. This prohibition does not apply to business
combinations involving the Company that are exempted by the Board of Trustees
before the interested shareholder becomes an interested shareholder.
We may engage in business combinations with an interested shareholder if at
least 5 years have passed since the person became an interested shareholder, but
only if the transaction is:
1. recommended by the board of trustees; and
2. approved by at least
a. 80% of the Company's outstanding shares entitled to vote, and
b. two-thirds of the Company's outstanding shares entitled to vote
that are not held by the interested shareholder.
Shareholder approval will not be required if the Company's common
shareholders receive a minimum price (as defined in the statute) for their
shares and the Company's shareholders receive cash or the same form of
consideration as the interested shareholder paid for its shares.
Control Share Acquisitions. The Company's Declaration of Trust exempts
acquisitions of the Company's shares of beneficial interest by any person from
"control share acquisition" requirements discussed below. There is no assurance
that such exemption will not be amended or eliminated in the future. If the
exemption was eliminated, "control share acquisitions" would be subject to the
following provisions.
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The Maryland General Corporation Law provides that "control shares" of a
Maryland real estate investment trust acquired in a "control share acquisition"
have no voting rights unless two-thirds of the shareholders (excluding shares
owned by the acquirer, the officers and trustees who are employees of the
Company) approve their voting rights.
"Control Shares" are shares that, if added with all other shares previously
acquired, would entitle that person to vote, in electing the trustees,
. 20% or more but less than one-third of such shares
. one-third or more but less than a majority of such shares, or
. a majority of the outstanding shares.
Control shares do not include shares the acquiring person is entitled to
vote with shareholder approval. A "control share acquisition" means the
acquisition of control shares, subject to certain exceptions.
If this provision becomes applicable to the Company, a person who has made
or proposes to make a control share acquisition could, under certain
circumstances, compel the Company's board of trustees to call a special meeting
of shareholders to consider the voting rights of the control shares. The
Company could also present the question at any shareholders meeting on its own.
If this provision becomes applicable to the Company, subject to certain
conditions and limitations, the Company would be able to redeem any or all
control shares. If voting rights for control shares were approved at a
shareholders meeting and the acquirer is entitled to vote a majority of the
shares entitled to vote, all other shareholders could exercise appraisal rights
and exchange their shares for a fair value as defined by statute.
Limitation of Liability of Trustees and Officers. The Company's
Declaration of Trust provides that, to the fullest extent that limitations on
the liability of trustees and officers are permitted by the Maryland General
Corporation Law, no trustee or officer shall be liable to the Company or its
shareholders for money damages. The Maryland General Corporation Law provides
that the Company may restrict or limit the liability of trustees or officers for
money damages except
. to the extent anyone actually received an improper benefit or profit
in money property or services, or
. a judgment or other final adjudication adverse to the person is
entered in a proceeding based on a finding that the person's action
was material to the cause of
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action adjudicated and the action or failure to act was the result of
bad faith or active and deliberate dishonesty.
Indemnification of Trustees and Officers. The Company's Declaration of
Trust and Bylaws permit the Company to indemnify any of its employees or agents.
The Bylaws require the Company to indemnify each trustee or officer who has been
successful in defending any proceeding to which he or she is made a party by
reason of his or her service to the Company. The Company has also entered into
separate indemnification agreements with each of its trustees and certain of its
executive officers. The agreements require that the Company indemnify its
trustees and officers to the fullest extent permitted by Maryland General
Corporation Law. The agreements also require the Company to indemnify and
advance all expenses incurred by trustees and officers seeking to enforce their
indemnification agreements. The Company must also cover trustees and officers
under its trustees' and officers' liability insurance. Although the form
indemnification agreement offers substantially the same scope of coverage as the
Company's Declaration of Trust and Bylaws, the agreements provide greater
assurance to the trustees and officers that indemnification will be available
because, as a contract, it cannot be modified unilaterally in the future by the
Board of Trustees or by the Company's shareholders.
The Maryland General Corporation Law provides that the Company may
indemnify trustees and officers unless
. the trustee actually received an improper benefit or profit in money
property or services,
. the act or omission of the trustee was material to the matter giving
rise to the proceeding and was committed in bad faith or was the
result of active and deliberate dishonesty, or
. in a criminal proceeding, the trustee had reasonable cause to believe
that the act or omission was unlawful.
The Company's Bylaws require, as a condition to advancing expenses, (1) a
written affirmation by the trustee or officer of his good faith belief that he
has met the standard of conduct necessary for indemnification by the Company and
(2) a written affirmation to repay the amount paid by the Company if it is
determined that the trustee or officer was not entitled to indemnification.
Maryland Asset Requirements. To maintain the Company's qualification as a
Maryland real estate investment trust, the Company must hold, either directly or
indirectly, at least 75% of the value of its assets in real estate assets,
mortgages or mortgage related securities, government securities, cash and cash
equivalent items, including high-grade short-term securities and receivables.
The Company is also prohibited from using or applying land for farming,
agricultural, horticultural or similar purposes.
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Meetings of Shareholders. The Company's Bylaws provide for annual meetings
of shareholders to elect the board of trustees and transact such other business
as may properly be brought before the meeting. Special meetings of shareholders
may be called by the President, the board of trustees or the Chairman of the
Board and shall be called at the request in writing of the holders of 50% or
more of the outstanding shares of beneficial interest of the Company entitled to
vote.
The Bylaws provide that any action required or permitted to be taken at a
meeting of shareholders may be taken by unanimous written consent without a
meeting. The written consent must, among other items, specify the action to be
taken and be signed by each shareholder entitled to vote on the matter.
TRANSFER AGENT AND REGISTRAR
The Company's transfer agent and registrar for the common shares is
American Stock Transfer & Trust Company. The Company will identify the transfer
agent and registrar for any preferred securities issued through this prospectus
in a prospectus supplement.
DESCRIPTION OF THE PARTNERSHIP AGREEMENT
The following summary of the Partnership Agreement of Capital Automotive
L.P., as currently in effect, including the descriptions of certain provisions
described elsewhere in this prospectus, is qualified in its entirety by
reference to the Partnership Agreement. The Company has filed the Partnership
Agreement as an exhibit to a registration statement filed with the SEC. You
should read the Partnership Agreement for a complete description of all the
terms.
MANAGEMENT
The Partnership was formed as a Delaware limited partnership in October
1997. The Company is the sole general partner and the holder of a majority of
the units of the Partnership. Under the Partnership Agreement, the Company has
full, exclusive and complete responsibility and discretion in the management and
control of the Partnership, subject to certain limited exceptions. The limited
partners of the Partnership generally have no authority to participate in or
exercise control or management power over the business and affairs of the
Partnership.
INDEMNIFICATION
The Partnership provides for indemnification of the Company, as general
partner, its officers and trustees and such other persons the Company may
designate to the same extent indemnification is provided in the Declaration of
Trust. The liability of the Company and its officers and trustees to the
Partnership are limited to the same extent as under the Declaration of Trust.
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TRANSFERABILITY OF INTERESTS
The Partnership Agreement generally provides that the Company may not
voluntarily withdraw from the Partnership, or transfer or assign its interest in
the Partnership. The limited partners, on the other hand, may transfer their
units if the Partnership consents and the transfer does not violate federal and
state securities laws or REIT qualification rules under the Code. The limited
partners may also transfer units to a qualified transferee as described in the
Partnership Agreement. Both the Company and the Partnership have a right of
first refusal in the case of transfer by the limited partners. No transferee
may become a substituted limited partner without the Partnership's consent.
EXTRAORDINARY TRANSACTIONS
Under the Partnership Agreement, the Company may not (1) engage in any
merger, consolidation or other combination, (2) sell all or substantially all of
its assets, or (3) reclassify, recapitalize or change its outstanding common
shares. These transactions will be referred to as business combinations. The
Company may not participate in a business combination unless the holders of
units will receive the same consideration per unit or preferred unit, if any, as
shareholders receive per common share or preferred share, and no more than 75%
of the equity securities of the acquiring person will be owned by the Company or
related persons. If there is an offer to purchase, tender or exchange common
shares, each holder of units will be able to exchange its units for the greatest
amount of cash, securities or property that a limited partner would have
received had he redeemed his units, and then accepted the sale, tender or
exchange offer for those shares.
The Company can merge into or consolidate with another person if
immediately after the merger or consolidation substantially all of the assets of
the successor person are contributed to the Partnership as a capital
contribution in exchange for units and the surviving person agrees to assume the
obligations of the general partner.
OFFERS AND SALES OF ADDITIONAL UNITS
The Partnership has and will continue to issue additional units. The
Partnership may also issue additional units representing general partnership
interests, common limited partnership interests or preferred limited partnership
interests of any class or series, with such rights, powers and preferences as
the general partner sets.
CAPITAL CONTRIBUTIONS AND ADDITIONAL FUNDS
If the Partnership requires additional funds at any time, then the Company,
to the extent consistent with its REIT status, may borrow such funds from a
lender and lend such funds to the Partnership on comparable loan terms. The
Company may also give the Partnership additional funds by making additional
capital contributions in return for units. If the Company sells
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additional securities, the Company will contribute the net proceeds to the
Partnership by making additional capital contributions. If the Company
contributes additional capital to the Partnership, its limited partnership
interest in the Partnership will increase on a proportionate basis based upon
the amount of the additional capital. If the additional capital contribution
arises from the sale of securities, the Company will receive units of limited
partnership interest with rights comparable to the rights of the securities that
were sold by the Company. If the Company's limited partnership interest
increases, the limited partnership interests of the limited partners will
decrease proportionately.
LIMITED PARTNER REDEMPTION RIGHTS
Under the Partnership Agreement, each limited partner has the right to
require the Partnership to redeem part or all of his units for cash after a
specified holding period that is at least one year from the date such units were
first acquired by the limited partner. The Company may elect to assume the
obligations of the Partnership and may acquire the units for common shares on a
one-for-one basis. The Partnership can refuse or delay a redemption if it would
cause any person to violate any ownership limitation or provision of the
Declaration of Trust or otherwise jeopardize the Company's status as a REIT.
See "Description of Shares of Beneficial Interest--Restrictions on Ownership and
Transfer." The holders of units have been given registration rights requiring
the Company to register the re-sale of any common shares issued in exchange for
units.
TAX MATTERS
As provided in the Partnership Agreement, the Company is the tax matters
partner of the Partnership. Accordingly, the Company makes whatever tax
elections must be made under the Code. The net income or net loss of the
Partnership will generally be allocated to the Company and the limited partners
in accordance with priorities of distribution. See "Federal Income Tax
Consequences-Tax Aspects of the Company's Investments in the Partnership and
Subsidiary Partnerships."
DISTRIBUTIONS
Subject to the terms of any preferred units, the Partnership distributes
cash on a quarterly basis (or if the Company elects more frequently), to its
limited partners on a pro rata basis.
OPERATIONS
The Partnership Agreement requires that the Partnership be operated in a
manner that will enable the Company to satisfy the requirements for
classification as a real estate investment trust and to ensure that the
Partnership will not be classified as a publicly-traded partnership under the
Code. Under the Partnership Agreement, subject to certain exceptions, the
Partnership will also assume and pay when due, or reimburse the Company for
payment of, all costs and expenses relating to the ownership of interests in and
operation of the Partnership.
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DUTIES AND CONFLICTS
The Partnership Agreement provides generally that all business activities
must be conducted through the Partnership.
TERM
The term of the Partnership continues until December 31, 2073, or until
sooner dissolved upon the occurrence of certain other events.
FEDERAL INCOME TAX CONSEQUENCES
The following sections summarize the federal income tax issues that you,
may consider relevant. Because this section is a summary, it does not address
all of the tax issues that may be important to you. In addition, this section
does not address the tax issues that may be important to certain types of
shareholders that are subject to special treatment under the federal income tax
laws, such as insurance companies, tax-exempt organizations (except to the
extent discussed in "--Taxation of Tax-Exempt Shareholders" below), financial
institutions and broker-dealers, and non-U.S. individuals and foreign
corporations (except to the extent discussed in "--Taxation of Non-U.S.
Shareholders" below).
The statements in this section are based on the current federal income tax
laws governing the Company's qualification as a REIT. The Company cannot assure
you that new laws, interpretations of laws or court decisions, any of which may
take effect retroactively, will not cause any statement in this section to be
inaccurate.
THE COMPANY URGES YOU TO CONSULT YOUR OWN TAX ADVISOR REGARDING THE
SPECIFIC TAX CONSEQUENCES TO YOU OF REDEEMING YOUR UNITS AND OF THE COMPANY'S
ELECTION TO BE TAXED AS A REIT. SPECIFICALLY, YOU SHOULD CONSULT YOUR OWN TAX
ADVISOR REGARDING THE FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES
OF SUCH INVESTMENT AND ELECTION, AND REGARDING POTENTIAL CHANGES IN APPLICABLE
TAX LAWS.
TAXATION OF THE COMPANY
The Company will elect to be taxed as a REIT under the federal income tax
laws when it files its 1998 tax return. The Company has operated in a manner
intended to qualify as a REIT and it intends to continue to operate in that
manner. This section discusses the laws governing the federal income tax
treatment of a REIT and its shareholders. These laws are highly technical and
complex.
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In the opinion of the Company's tax counsel, Wilmer, Cutler & Pickering,
(1) the Company will qualify as a REIT under sections 856 through 859 of the
Code with respect to the Company's first taxable year ended December 31, 1998;
and (2) the Company is organized in conformity with the requirements for
qualification as a REIT under the Code and its current method of operation will
enable it to meet the requirements for qualification as a REIT for the current
taxable year and for future taxable years. With respect to its current and
future years, however, the Company's status as a REIT at any time is dependent,
among other things, upon its meeting certain requirements throughout the year as
a whole. You should be aware that opinions of counsel are not binding on the IRS
or any court. Wilmer, Cutler & Pickering based this opinion on various
assumptions and factual representations made by the Company. The Company's
qualification as a REIT depends on its ability to meet, on a continuing basis,
certain qualification tests set forth in the federal tax laws. Those
qualification tests involve the percentage of income that the Company earns from
specified sources, the percentage of its assets that fall within certain
categories, the diversity of its share ownership, and the percentage of its
earnings that it distributes. We describe the REIT qualification tests in more
detail below. Wilmer, Cutler & Pickering will not monitor the Company's
compliance with the requirements for REIT qualification on an ongoing basis.
Accordingly, no assurance can be given that the Company's actual operating
results will satisfy the qualification tests. For a discussion of the tax
treatment of the Company and its shareholders if the Company fails to qualify as
a REIT, see "--Failure to Qualify."
If the Company qualifies as a REIT, it generally will not be subject to
federal income tax on the taxable income that it distributes to its
shareholders. The benefit of that tax treatment is that it avoids the "double
taxation" (i.e., at both the corporate and stockholder levels) that generally
results from owning stock in a corporation. However, the Company will be
subject to federal tax in the following circumstances:
. the Company will pay federal income tax on taxable income (including net
capital gain) that it does not distribute to its shareholders during, or
within a specified time period after, the calendar year in which the income
is earned;
. the Company may be subject to the " alternative minimum tax" on any items
of tax preference that it does not distribute or allocate to its
shareholders;
. the Company will pay income tax at the highest corporate rate on (i) net
income from the sale or other disposition of property acquired through
foreclosure ("foreclosure property") that it holds primarily for sale to
customers in the ordinary course of business and (ii) other non-qualifying
income from foreclosure property;
. the Company will pay a 100% tax on net income from certain sales or other
dispositions of property (other than foreclosure property) that it holds
primarily for sale to customers in the ordinary course of business
("prohibited transactions");
. if the Company fails to satisfy the 75% gross income test or the 95% gross
income test (as described below under "--Requirements for Qualification --
Income Tests"), and nonetheless continues to qualify as a REIT because it
meets certain other requirements, it will pay a 100% tax on (i) the gross
income attributable to the greater of the amounts by
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which it fails the 75% and 95% gross income tests, multiplied by (ii) a
fraction intended to reflect its profitability;
. if the Company fails to distribute during a calendar year at least the sum
of (i) 85% of its REIT ordinary income for such year, (ii) 95% of its REIT
capital gain net income for such year, and (iii) any undistributed taxable
income from prior periods, it will pay a 4% excise tax on the excess of
such required distribution over the amount it actually distributed;
. the Company may elect to retain and pay income tax on its net long-term
capital gain; or
. if the Company acquires any asset from a C corporation (i.e., a
corporation generally subject to full corporate-level tax) in a merger
or other transaction in which it acquires a "carryover" basis in the asset
(i.e., basis determined by reference to the C corporation's basis in the
asset (or another asset)), it will pay tax at the highest regular corporate
rate applicable if it recognizes gain on the sale or disposition of such
asset during the 10-year period after it acquires such asset. The amount
of gain on which it will pay tax is the lesser of (i) the amount of gain
that it recognizes at the time of the sale or disposition and (ii) the
amount of gain that it would have recognized if it had sold the asset at
the time it acquired the asset. The rule described in this paragraph will
apply assuming that the Company makes an election under IRS Notice 88-19
upon its acquisition of an asset from a C corporation.
REQUIREMENTS FOR REIT QUALIFICATION
In order to qualify as a REIT, the Company must be a corporation, trust or
association that meets the following requirements:
1. it is managed by one or more trustees or directors;
2. its beneficial ownership is evidenced by transferable shares, or by
transferable certificates of beneficial interest;
3. it would be taxable as a domestic corporation, but for sections 856
through 860 of the Code;
4. it is neither a financial institution nor an insurance company subject
to certain provisions of the Code;
5. at least 100 persons are beneficial owners of its shares or ownership
certificates;
6. not more than 50% in value of its outstanding shares or ownership
certificates is owned, directly or indirectly, by five or fewer
individuals (as defined in the Code
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to include certain entities) during the last half of any taxable year
(the "5/50 Rule");
7. it elects to be a REIT (or has made such election for a previous
taxable year) and satisfies all relevant filing and other
administrative requirements established by the Service that must be
met to elect and maintain REIT status;
8. it uses a calendar year for federal income tax purposes and complies
with the record keeping requirements of the Code and the related
Treasury Regulations; and
9. it meets certain other qualification tests, described below, regarding
the nature of its income and assets.
The Company must meet requirements 1 through 4 during its entire taxable
year and must meet requirement 5 during at least 335 days of a taxable year of
12 months, or during a proportionate part of a taxable year of less than 12
months. The Company was not required to meet requirements 5 and 6 during 1998.
If the Company complies with all the requirements for ascertaining the ownership
of its outstanding shares in a taxable year and has no reason to know that it
violated the 5/50 Rule, it will be deemed to have satisfied the 5/50 Rule for
such taxable year. For purposes of determining share ownership under the 5/50
Rule, an "individual" generally includes a supplemental unemployment
compensation benefits plan, a private foundation, or a portion of a trust
permanently set aside or used exclusively for charitable purposes. An
"individual," however, generally does not include a trust that is a qualified
employee pension or profit sharing trust under Code section 401(a), and
beneficiaries of such a trust will be treated as holding shares of the Company
in proportion to their actuarial interests in the trust for purposes of the 5/50
Rule.
The Company believes it has issued sufficient common shares with sufficient
diversity of ownership to satisfy requirements 5 and 6 set forth above. In
addition, the Company's Declaration of Trust restricts the ownership and
transfer of the common shares so that the Company should continue to satisfy
requirements 5 and 6. The provisions of the Declaration of Trust restricting
the ownership and transfer of the common shares are described in "Description of
Shares of Beneficial Ownership--Restrictions on Ownership and Transfer."
The Company currently has several direct corporate subsidiaries and may
have additional corporate subsidiaries in the future. A corporation that is a
"qualified REIT subsidiary" is not treated as a corporation separate from its
parent REIT. All assets, liabilities, and items of income, deduction, and
credit of a "qualified REIT subsidiary" are treated as assets, liabilities, and
items of income, deduction, and credit of the REIT. A "qualified REIT
subsidiary" is a corporation, all of the capital stock of which is owned by the
REIT. Thus, in applying the requirements described herein, any "qualified REIT
subsidiary" of the Company will be ignored, and all assets, liabilities, and
items of income, deduction, and credit of such subsidiary will be
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treated as assets, liabilities, and items of income, deduction, and credit of
the Company. The Company believes its direct corporate subsidiaries are
qualified REIT subsidiaries. Accordingly, they are not subject to federal
corporate income taxation, though they may be subject to state and local
taxation.
A REIT is treated as owning its proportionate share of the assets of any
partnership in which it is a partner and as earning its allocable share of the
gross income of the partnership for purposes of the applicable REIT
qualification tests. Thus, the Company"s proportionate share of the assets,
liabilities and items of income of the Partnership and of any other partnership
(or limited liability company treated as a partnership) in which the Company has
acquired or will acquire an interest, directly or indirectly (a "Subsidiary
Partnership"), are treated as assets and gross income of the Company for
purposes of applying the various REIT qualification requirements.
INCOME TESTS
The Company must satisfy two gross income tests annually to maintain its
qualification as a REIT:
. At least 75% of its gross income (excluding gross income from prohibited
transactions) for each taxable year must consist of defined types of income
that it derives, directly or indirectly, from investments relating to real
property or mortgages on real property or temporary investment income (the
"75% gross income test"). Qualifying income for purposes of the 75% gross
income test includes "rents from real property," interest on debt secured
by mortgages on real property or on interests in real property, and
dividends or other distributions on and gain from the sale of shares in
other REITs; and
. At least 95% of its gross income (excluding gross income from prohibited
transactions) for each taxable year must consist of income that is
qualifying income for purposes of the 75% gross income test, dividends,
other types of interest, gain from the sale or disposition of stock or
securities, or any combination of the foregoing (the "95% gross income
test").
The following paragraphs discuss the specific application of these tests to the
Company.
Rental Income. The Partnership's primary source of income derives from
leasing properties to dealer groups. The leases generally are on a "triple-
net" basis, which require the lessees to pay substantially all expenses
associated with the operation of the properties, such as real estate taxes,
insurance, utilities, services, maintenance and other operating expenses and any
ground lease payments.
Rents under the leases will constitute "rents from real property" only if
the leases are treated as true leases for federal income tax purposes and are
not treated as service contracts,
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joint ventures, financing arrangements or some other type of arrangement. The
determination of whether the leases are true leases depends on an analysis of
all surrounding facts and circumstances. In making such a determination, courts
have considered a variety of factors, including the following: (1) the intent of
the parties; (2) the form of the agreement; (3) the degree of control over the
property that is retained by the property owner (e.g., whether the lessee has
substantial control over the operation of the property or whether the lessee was
required simply to use its best efforts to perform its obligations under the
agreement); (4) the extent to which the property owner retains the risk of loss
with respect to the operation of the property (e.g., whether the lessee bears
the risks of increases in operating expenses or the risk of damage to the
property); and (5) the extent to which the property owner retains the burdens
and benefits of ownership of the property.
Capital Automotive Group believes that each lease will be treated as a true
lease for federal income tax purposes. Such belief is based, in part, on the
following facts:
1. Capital Automotive Group and the lessees intend for the relationship
with the Partnership to be that of a lessor and lessee and such
relationship will be documented by lease agreements;
2. the lessees will have the right to exclusive possession and use and
quiet enjoyment of the properties during the term of the leases;
3. the lessees will bear the cost of, and be responsible for, day-to-day
maintenance and repair of the properties, and will dictate how the
properties are operated, maintained, and improved;
4. the lessees will bear all of the costs and expenses of operating the
properties during the terms of the leases;
5. the lessees will benefit from any savings in the costs of operating
the properties during the terms of the leases;
6. the lessees will generally indemnify Capital Automotive Group against
all liabilities imposed on Capital Automotive Group during the term of
the leases by reason of (a) injury to persons or damage to property
occurring at the properties, or (b) the lessees' use, management,
maintenance or repair of the properties;
7. the lessees are obligated to pay fixed rent for the period of use of
the properties;
8. the lessees stand to reap substantial gains (or incur substantial
losses) depending on how successfully they operate the properties;
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9. the useful lives of the properties are significantly longer than the
terms of the leases; and
10. Capital Automotive Group will receive the benefit of increases in
value, and will bear the risk of decreases in value, of the properties
during the terms of the leases.
If the IRS were to challenge successfully the characterization of the
leases as true leases, the Partnership would not be treated as the owner of the
property in question for federal income tax purposes and the Partnership would
lose tax depreciation and cost recovery deductions with respect to such
property, which in turn could cause the Company to fail to qualify as a REIT.
See "--Distribution Requirements."
Shareholders should be aware that there are no controlling Treasury
regulations, published rulings, or judicial decisions involving leases with
terms substantially similar to those contained in the leases that address
whether such leases constitute true leases for federal income tax purposes. If
the leases are recharacterized as financing arrangements or partnership
agreements, rather than true leases, part or all of the payments that the
Partnership receives from the lessees may not be considered rent or may not
otherwise satisfy the various requirements for qualification as "rents from real
property." In that case, the Company likely would not be able to satisfy either
the 75% or 95% gross income tests and, as a result, would lose REIT status.
Capital Automotive Group received an opinion of counsel at the time of its
initial public offering that the leases entered into at that time were true
leases. That opinion is not binding on the IRS. Capital Automotive Group will
use its best efforts to structure any leasing transaction for properties
acquired in the future such that the lease will be characterized as a "true
lease " and the Partnership will be treated as the owner of the property in
question for federal income tax purposes and has generally entered into leases
substantially similar to those entered into at the time of the initial public
offering. The Company will not seek an advance ruling from the IRS and does not
intend to seek an opinion of counsel that it will be treated as the owner of any
other leased properties for federal income tax purposes, and thus there can be
no assurance that future leases will be treated as true leases for federal
income tax purposes.
In addition, rent that the Partnership receives from real property that it
owns and leases to lessees will qualify as "rents from real property" (which is
qualifying income for purposes of the 75% and 95% gross income tests) only if
several conditions are met under the REIT tax rules:
. The rent must not be based, in whole or in part, on the income or profits
of any person although, generally, rent may be based on a fixed percentage
or percentages of receipts or sales. The Partnership has not entered into
any lease based in whole or part on the net income of any person and does
not anticipate entering into such arrangements.
. Neither the Company nor someone who owns 10% or more of the Company's
shares may own 10% or more of a lessee from whom the Partnership receives
rent. The ownership of
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the Company and a lessee is determined based on direct, indirect and
constructive ownership. The constructive ownership rules generally provide
that if 10% or more in value of the shares of the Company are owned,
directly or indirectly, by or for any person, the Company is considered as
owning the shares owned, directly or indirectly, by or for such person. The
applicable attribution rules, however, are highly complex and difficult to
apply, and the Partnership may inadvertently enter into leases with lessees
who, through application of such rules, will constitute "Related Party
Tenants." In such event, rent paid by the Related Party Tenant will not
qualify as "rents from real property," which may jeopardize the Company's
status as a REIT. The Partnership will use its best efforts not to rent any
property to a Related Party Tenant (taking into account the applicable
constructive ownership rules), unless the Company determines in its
discretion that the rent received from such Related Party Tenant is not
material and will not jeopardize the Company's status as a REIT. The
Company believes that the Partnership has not leased property to any
Related Party Tenant.
. The rent attributable to any personal property leased in connection with a
lease of property is no more than 15% of the total rent received under the
lease. In general, the Partnership has not leased personal property under
its current leases. If any incidental personal property has been leased,
Capital Automotive Group believes that rent from the personal property
would be less than 15% of total rent from that lease. If the Partnership
were to lease personal property in connection with a future lease, Capital
Automotive Group intends to satisfy the 15% test described above.
. Capital Automotive Group generally must not operate or manage its property
or furnish or render services to its lessees, other than through an
"independent contractor" who is adequately compensated and from whom
Capital Automotive Group does not derive revenue. Capital Automotive Group
may provide services directly, if the services are "usually or customarily
rendered" in connection with the rental of space for occupancy only and are
not otherwise considered "rendered to the occupant." In addition, Capital
Automotive Group may render directly a de minimis amount of "non-
customary" services to the lessees of a property without disqualifying the
income as "rents from real property," as long as its income from the
services does not exceed 1% of its income from the related property.
Capital Automotive Group has not provided services to leased properties
itself or through an independent contractor. In the future, Capital
Automotive Group intends that any services provided will not cause rents to
be disqualified as rents from real property.
Based on the foregoing, the Company believes that rent from leases should
qualify as "rents from real property" for purposes of the 75% and 95% gross
income tests. As described above, however, there can be no complete assurance
that the IRS will not assert successfully a contrary position and, therefore,
prevent the Company from qualifying as a REIT.
On an ongoing basis, the Company will use its best efforts not to cause the
Partnership to:
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. charge rent for any property that is based in whole or in part on the
income or profits of any person (except by reason of being based on a
percentage of receipts or sales, as described above);
. rent any property to a Related Party Tenant (taking into account the
applicable constructive ownership rules), unless the Company determines in
its discretion that the rent received from such Related Party Lessee is not
material and will not jeopardize the Company's status as a REIT;
. derive rental income attributable to personal property (other than
personal property leased in connection with the lease of real property, the
amount of which is less than 15% of the total rent received under the
lease); and
. perform services considered to be rendered to the occupant of the
property, unless such services generate rents not in excess of 1% of all
amounts received or accrued during the taxable year with respect to such
property, other than through an independent contractor from whom the
Company derives no revenue or if the provisions of such services will not
jeopardize the Company's status as a REIT.
Because the Code provisions applicable to REITs are complex, however, the
Company may fail to meet one or more of the foregoing.
Interest Income. Capital Automotive Group may offer financing to dealer
groups for the development of property used by dealerships and earn interest
with respect to such financings. For purposes of the 75% and 95% gross income
tests, amounts received or accrued (directly or indirectly), which are based in
whole or in part on the income or profits of any person are generally not
treated as interest. An amount received or accrued will generally be treated as
interest even if it is based (1) on a fixed percentage or percentages of
receipts or sales or (2) on the income or profits of a debtor if the debtor
derives substantially all of its gross income from the related property through
the leasing of substantially all of its interests in the property, but only to
the extent the amounts received by the debtor would be characterized as "rents
from real property" if received by a REIT. Furthermore, to the extent that
interest from a loan that is based on the cash proceeds from the sale of the
property securing the loan constitutes a "shared appreciation provision" (as
defined in the Code), income attributable to such participation feature will be
treated as gain from the sale of the secured property, which generally is
qualifying income for purposes of the 75% and 95% gross income tests.
Interest on obligations secured by mortgages on real property or on
interests in real property generally is qualifying income for purposes of the
75% gross income tests. However, if Capital Automotive Group receives interest
income with respect to a loan that is secured by both real property and other
property and the highest principal amount of the loan outstanding during a
taxable year exceeds the fair market value of the real property on the date
Capital Automotive Group acquired the loan, the interest income from the loan
will be apportioned between the real
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property and the other property. This apportionment may cause the Company to
recognize income that is not qualifying income for purposes of the 75% gross
income test. The Company intends to structure any such financing arrangement
such that it will continue to qualify as a REIT.
Tax on Income From Property Acquired in Foreclosure. The Company will be
subject to tax at the maximum corporate rate on any income from foreclosure
property (other than income that would be qualifying income for purposes of the
75% gross income test), less expenses directly connected to the production of
such income. "Foreclosure property" is any real property (including interests
in real property) and any personal property incident to such real property:
. that is acquired by a REIT at a foreclosure sale, or having otherwise
become the owner or in possession of the property by agreement or process
of law, after a default (or imminent default) on a lease of such property
or on an indebtedness owed to the REIT secured by the property;
. for which the related loan was acquired by the REIT at a time when default
was not imminent or anticipated; and
. for which the REIT makes a proper election to treat the property as
foreclosure property.
A REIT will not be considered to have foreclosed on a property where it takes
control of the property as a mortgagee-in-possession and cannot receive any
profit or sustain any loss except as a creditor of the mortgagor. Generally,
property acquired as described above ceases to be foreclosure property on the
earlier of:
. the last day of the third taxable year following the taxable year in which
the Partnership acquired the property (or longer if an extension is granted
by the Secretary of the Treasury);
. the first day on which a lease is entered into with respect to such
property that, by its terms, will give rise to income that does not qualify
under the 75% gross income test or any amount is received or accrued,
directly or indirectly, pursuant to a lease entered into on or after such
day that will give rise to income that does not qualify under the 75% gross
income test;
. the first day on which any construction takes place on such property
(other than completion of a building, or any other improvement, where more
than 10% of the construction of such building or other improvement was
completed before default became imminent); or
. the first day that is more than 90 days after the day on which such
property was acquired by the REIT and the property is used in a trade or
business that is conducted by the REIT
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(other than through an independent contractor from whom the REIT itself
does not derive or receive any income).
Tax on Prohibited Transactions. A REIT will incur a 100% tax on net income
derived from any "prohibited transaction." A "prohibited transaction" generally
is a sale or other disposition of property (other than foreclosure property)
that the REIT holds primarily for sale to customers in the ordinary course of a
trade or business. Capital Automotive Group believes that none of its assets is
held for sale to customers and that a sale of any such asset would not be in the
ordinary course of its business. Whether a REIT holds an asset "primarily for
sale to customers in the ordinary course of a trade or business" depends,
however, on the facts and circumstances in effect from time to time, including
those related to a particular asset. Nevertheless, Capital Automotive Group will
attempt to comply with the terms of safe-harbor provisions in the Code
prescribing when an asset sale will not be characterized as a prohibited
transaction. Capital Automotive Group may fail to comply with such safe-harbor
provisions or may own property that could be characterized as property held
"primarily for sale to customers in the ordinary course of a trade or business."
Relief from Consequences of Failing to Meet Income Tests. If the Company
fails to satisfy one or both of the 75% and 95% gross income tests for any
taxable year, it nevertheless may qualify as a REIT for such year if it
qualifies for relief under certain provisions of the Code. Those relief
provisions generally will be available if the Company's failure to meet such
tests is due to reasonable cause and not due to willful neglect, the Company
attaches a schedule of the sources of its income to its tax return, and any
incorrect information on the schedule was not due to fraud with intent to evade
tax. The Company may not qualify for the relief provisions in all
circumstances. In addition, as discussed above in "--Taxation of the Company,"
even if the relief provisions apply, the Company would incur a 100% tax on gross
income to the extent it fails the 75% and 95% gross income tests (whichever
amount is greater), multiplied by a fraction intended to reflect its
profitability.
ASSET TESTS
To maintain its qualification as a REIT, the Company also must satisfy two
asset tests at the close of each quarter of each taxable year:
. At least 75% of the value of its total assets must consist of cash or cash
items (including certain receivables), government securities, "real estate
assets," or qualifying temporary investments (the "75% asset test").
* "Real estate assets" include interests in real property,
interests in mortgages on real property and stock in other REITs.
The Company believes that the properties qualify as real estate
assets.
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* "Interests in real property" includes an interest in mortgage
loans or land and improvements thereon, such as buildings or
other inherently permanent structures (including items that are
structural components of such buildings or structures), a
leasehold of real property, and an option to acquire real
property (or a leasehold of real property).
* Qualifying temporary investments are investments in stock or debt
instruments during the one-year period following the Company's
receipt of new capital that it raises through equity or long-term
(at least five-year) debt offerings.
. For investments not included in the 75% asset test, (A) the value of its
interest in any one issuer's securities (which does not include its equity
ownership of other REITs, the Partnership or any qualified REIT subsidiary)
may not exceed 5% of the value of its total assets (the "5% asset test")
and (B) the Company may not own more than 10% of any one issuer's
outstanding voting securities which does not include its equity ownership
in other REITs, the Partnership or any qualified REIT subsidiary (the "10%
asset test").
The Company intends to select future investments so as to comply with the asset
tests.
If the Company failed to satisfy the asset tests at the end of a calendar
quarter, it would not lose its REIT status if (i) it satisfied the asset tests
at the close of the preceding calendar quarter and (ii) the discrepancy between
the value of its assets and the asset test requirements arose from changes in
the market values of its assets and was not wholly or partly caused by the
acquisition of one or more non-qualifying assets. If the Company did not
satisfy the condition described in clause (ii) of the preceding sentence, it
still could avoid disqualification as a REIT by eliminating any discrepancy
within 30 days after the close of the calendar quarter in which the discrepancy
arose.
DISTRIBUTION REQUIREMENTS
Each taxable year, the Company must distribute dividends (other than
capital gain dividends and deemed distributions of retained capital gain) to its
shareholders as follows:
. an aggregate amount at least equal to (1) the sum of 95% of (A) its "REIT
taxable income" (computed without regard to the dividends paid deduction
and its net capital gain or loss) and (B) its net income (after tax), if
any, from foreclosure property, minus (2) certain items of non-cash income.
-----
. at least 95% of the built-in gain (after tax), if any, recognized on the
disposition of any asset acquired from a C corporation in a carryover basis
transaction during its Recognition Period (pursuant to Treasury regulations
which have not yet been promulgated).
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The Company must pay such distributions in the taxable year to which they
relate, or in the following taxable year if it declares the distribution before
it timely files its federal income tax return for such year and pays the
distribution on or before the first regular dividend payment date after such
declaration.
The Company will pay federal income tax on taxable income (including net
capital gain) that it does not distribute to shareholders. Furthermore, it will
incur a 4% nondeductible excise tax if it fails to distribute during a calendar
year (or, in the case of distributions with declaration and record dates falling
in the last three months of the calendar year, by the end of January following
such calendar year) at least the sum of (1) 85% of its REIT ordinary income for
such year, (2) 95% of its REIT capital gain income for such year, and (3) any
undistributed taxable income from prior periods. The excise tax is on the
excess of such required distribution over the amounts it actually distributed.
The Company may elect to retain and pay income tax on the net long-term capital
gain it receives in a taxable year. See "--Taxation of Taxable U.S.
Shareholders." For purposes of the 4% excise tax, it will be treated as having
distributed any such retained amount. The Company has made, and the Company
intends to continue to make, timely distributions sufficient to satisfy the
annual distribution requirements.
It is possible that, from time to time, the Company may experience timing
differences between (1) the actual receipt of income and actual payment of
deductible expenses and (2) the inclusion of that income and deduction of such
expenses in arriving at its REIT taxable income. For example, the Company may
not deduct recognized capital losses from its "REIT taxable income." Further, it
is possible that, from time to time, the Company may be allocated a share of net
capital gain attributable to the sale of depreciated property that exceeds its
allocable share of cash attributable to that sale. As a result of the
foregoing, the Company may have less cash than is necessary to distribute all of
its taxable income and thereby avoid corporate income tax and the excise tax
imposed on certain undistributed income. In such a situation, it may need to
borrow funds or issue preferred shares or additional common shares.
The Company intends to calculate its "REIT taxable income" based upon the
conclusion that the Partnership is the owner for federal income tax purposes of
all of the properties. As a result, the Company expects that depreciation
deductions with respect to all such properties will reduce its "REIT taxable
income." If the IRS were to successfully challenge this position, the Company
might be deemed retroactively to have failed to meet the distribution
requirement and would have to rely on the payment of a "deficiency dividend" in
order to retain its REIT status.
Under certain circumstances, the Company may be able to correct a failure
to meet the distribution requirement for a year by paying "deficiency dividends"
to its shareholders in a later year. The Company may include such deficiency
dividends in its deduction for dividends paid for the earlier year. Although
the Company may be able to avoid income tax on amounts distributed as deficiency
dividends, it will be required to pay interest to the IRS based upon the amount
of any deduction it takes for deficiency dividends.
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PARTNERSHIP ANTI-ABUSE RULE
The United States Treasury Department has issued a regulation (the "Anti-
Abuse Rule") under the partnership provisions of the Code that authorizes the
IRS, in certain "abusive" transactions involving partnerships, to disregard the
form of the transaction and recast it for federal tax purposes as the IRS deems
appropriate. The Anti-Abuse Rule applies where a partnership is formed or
utilized in connection with a transaction (or series of related transactions)
with a principal purpose of substantially reducing the present value of the
partners' aggregate federal tax liability in a manner inconsistent with the
intent of the partnership provisions. The Anti-Abuse Rule states that the
partnership provisions are intended to permit taxpayers to conduct joint
business (including investment) activities through a flexible economic
arrangement that accurately reflects the partners' economic agreement and
clearly reflects the partners' income without incurring any entity-level tax.
The purposes for structuring a transaction involving a partnership are
determined based on all of the facts and circumstances, including a comparison
of the purported business purpose for a transaction and the claimed tax benefits
resulting from the transaction. A reduction in the present value of the
partners' aggregate federal tax liability through the use of a partnership does
not, by itself, establish inconsistency with the intent of the partnership
provisions.
The Anti-Abuse Rule contains an example in which a corporation that elects
to be treated as a REIT contributes substantially all of the proceeds from a
public offering to a partnership in exchange for a general partner interest.
The limited partners of the partnership contribute real property assets to the
partnership, subject to liabilities that exceed their respective aggregate bases
in such property. In addition, the limited partners have the right, beginning
one year after the formation of the partnership, to require the redemption of
their limited partnership interests in exchange for cash or REIT shares (at the
corporation's option) equal to the fair market value of their respective
interests in the partnership at the time of the redemption. The example
concludes that the use of the partnership is not inconsistent with the intent of
the partnership provisions and, thus, cannot be recast by the IRS. Based on the
foregoing, the Company believes that the Anti-Abuse Rule will not have any
adverse impact on the Company's ability to qualify as a REIT. However, the Anti-
Abuse Rule is extraordinarily broad in scope and is applied based on an analysis
of all of the facts and circumstances. As a result, there can be no assurance
that the Service will not attempt to apply the Anti-Abuse Rule to the Company.
If the conditions of the Anti-Abuse Rule are met, the IRS is authorized to take
appropriate enforcement action, including disregarding the Partnership for
federal tax purposes or treating one or more of its partners as non-partners.
Any such action potentially could jeopardize the Company's status as a REIT.
RECORD KEEPING REQUIREMENTS
The Company must maintain certain records in order to qualify as a REIT. In
addition, to avoid a monetary penalty, it must request on an annual basis
certain information from its shareholders designed to disclose the actual
ownership of its outstanding stock. The Company has complied, and the Company
intends to continue to comply, with such requirements.
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FAILURE TO QUALIFY
If the Company failed to qualify as a REIT in any taxable year, and no
relief provision applied, it would be subject to federal income tax (including
any applicable alternative minimum tax) on its taxable income at regular
corporate rates. In calculating its taxable income in a year in which it failed
to qualify as a REIT, the Company would not be able to deduct amounts paid out
to shareholders. In fact, the Company would not be required to distribute any
amounts to shareholders in such year. In such event, to the extent of its
current and accumulated earnings and profits, all distributions to shareholders
would be taxable as ordinary income. Subject to certain limitations of the Code,
corporate shareholders might be eligible for the dividends received deduction.
Unless the Company qualified for relief under specific statutory provisions, it
also would be disqualified from taxation as a REIT for the four taxable years
following the year during which it ceased to qualify as a REIT. The Company
cannot predict whether in all circumstances it would qualify for such statutory
relief.
TAXATION OF SHAREHOLDERS
Taxation of Taxable U.S. Shareholders. As long as the Company qualifies as
a REIT, a taxable "U.S. shareholder" must take into account distributions out of
the Company's current or accumulated earnings and profits (and that it does not
designate as capital gain dividends or retained long-term capital gain) as
ordinary income. A U.S. Stockholder will not qualify for the dividends received
deduction generally available to corporations. As used herein, the term "U.S.
shareholder" means a holder of common Shares that for U.S. federal income tax
purposes 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 of a political subdivision thereof,
. an estate whose income is subject to U.S. federal income taxation
regardless of its source, or
. any trust with respect to which (A) a U.S. court is able to exercise
primary supervision over the administration of such trust and (B) one or
more U.S. persons have the authority to control all substantial decisions
of the trust.
A U.S. shareholder will recognize distributions that the Company designates
as capital gain dividends as long-term capital gain (to the extent they do not
exceed the Company's actual net capital gain for the taxable year) without
regard to the period for which the U.S. shareholder has held its common shares.
Subject to certain limitations, the Company will designate its capital gain
dividends as either 20% or 25% rate distributions. A corporate U.S.
shareholder, however, may be required to treat up to 20% of certain capital gain
dividends as ordinary income.
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The Company may elect to retain and pay income tax on the net long-term
capital gain that it receives in a taxable year. In that case, a U.S.
shareholder would be taxed on its proportionate share of the Company's
undistributed long-term capital gain. The U.S. shareholder would receive a
credit or refund for its proportionate share of the tax the Company paid. The
U.S. shareholder would increase the basis in its stock by the amount of its
proportionate share of the Company's undistributed long-term capital gain, minus
its share of the tax the Company paid.
A U.S. shareholder will not incur tax on a distribution in excess of the
Company's current and accumulated earnings and profits if such distribution does
not exceed the adjusted basis of the U.S. shareholder's common shares. Instead,
such distribution will reduce the adjusted basis of such common shares. A U.S.
shareholder will recognize a distribution in excess of both the Company's
current and accumulated earnings and profits and the U.S. shareholder's adjusted
basis in its common shares as long-term capital gain (or short-term capital gain
if the common shares have been held for one year or less), assuming the common
shares are a capital asset in the hands of the U.S. shareholder. In addition,
if the Company declares a distribution in October, November, or December of any
year that is payable to a U.S. Stockholder of record on a specified date in any
such month, such distribution shall be treated as both paid by the Company and
received by the U.S. shareholder on December 31 of such year, provided that the
Company actually pays the distribution during January of the following calendar
year. The Company will notify U.S. shareholders after the close of its taxable
year as to the portions of the distributions attributable to that year that
constitute ordinary income or capital gain dividends.
Taxation of U.S. Shareholders on the Disposition of the Common Shares. In
general, a U.S. shareholder who is not a dealer in securities must treat any
gain or loss realized upon a taxable disposition of the common shares as long-
term capital gain or loss if the U.S. shareholder has held the common stock for
more than one year and otherwise as short-term capital gain or loss. However, a
U.S. shareholder must treat any loss upon a sale or exchange of common shares
held by such shareholder for six months or less (after applying certain holding
period rules) as a long-term capital loss to the extent of capital gain
dividends and other distributions from the Company that such U.S. shareholder
treats as long-term capital gain. All or a portion of any loss a U.S.
shareholder realizes upon a taxable disposition of the common shares may be
disallowed if the U.S. shareholder purchases additional common shares within 30
days before or after the disposition.
Capital Gains and Losses. A taxpayer generally must hold a capital asset
for more than one year for gain or loss derived from its sale or exchange to be
treated as long-term capital gain or loss. The highest marginal individual
income tax rate is 39.6%. The maximum tax rate on long-term capital gain
applicable to non-corporate taxpayers is 20% for sales and exchanges of assets
held for more than one year. The maximum tax rate on long-term capital gain
from the sale or exchange of "section 1250 property" (i.e., depreciable real
property) is 25% to the extent that such gain would have been treated as
ordinary income if the property were "section 1245 property." With respect to
distributions that the Company designates as capital gain dividends
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and any retained capital gain that it is deemed to distribute, the Company may
designate (subject to certain limits) whether such a distribution is taxable to
its non-corporate shareholders at a 20% or 25% rate. Thus, the tax rate
differential between capital gain and ordinary income for non-corporate
taxpayers may be significant. A U.S. shareholder required to include retained
long-term capital gains in income will be deemed to have paid, in the taxable
year of the inclusion, its proportionate share of the tax paid by the Company in
respect of such undistributed net capital gains. U.S. shareholders subject to
these rules will be allowed a credit or a refund, as the case may be, for the
tax deemed to have been paid by such shareholders. U.S. shareholders will
increase their basis in their common shares by the difference between the amount
of such includible gains and the tax deemed paid by the U.S. shareholder in
respect of such gains. In addition, the characterization of income as capital
gain or ordinary income may affect the deductibility of capital losses. A non-
corporate taxpayer may deduct capital losses not offset by capital gains against
its ordinary income only up to a maximum annual amount of $3,000. A non-
corporate taxpayer may carry forward unused capital losses indefinitely. A
corporate taxpayer must pay tax on its net capital gain at ordinary corporate
rates. A corporate taxpayer can deduct capital losses only to the extent of
capital gains, with unused losses being carried back three years and forward
five years.
Information Reporting Requirements and Backup Withholding. The Company
will report to its shareholders and to the IRS the amount of distributions it
pays during each calendar year, and the amount of tax it withholds, if any.
Under the backup withholding rules, a shareholder may be subject to backup
withholding at the rate of 31% with respect to distributions unless such holder
(1) is a corporation or comes within certain other exempt categories and, when
required, demonstrates this fact or (2) provides a taxpayer identification
number, certifies as to no loss of exemption from backup withholding, and
otherwise complies with the applicable requirements of the backup withholding
rules. A shareholder who does not provide the Company with its correct taxpayer
identification number also may be subject to penalties imposed by the IRS. Any
amount paid as backup withholding will be creditable against the shareholder's
income tax liability. In addition, the Company may be required to withhold a
portion of capital gain distributions to any shareholders who fail to certify
their non-foreign status to the Company. The Treasury Department has issued
final regulations regarding the backup withholding rules as applied to Non-U.S.
shareholders. Those regulations alter the current system of backup withholding
compliance and are effective for distributions made after December 31, 1999.
See "--Taxation of Non-U.S. Shareholders."
Taxation of Tax-Exempt Shareholders. Tax-exempt entities, including
qualified employee pension and profit sharing trusts and individual retirement
accounts and annuities ("Exempt Organizations"), generally are exempt from
federal income taxation. However, they are subject to taxation on their
unrelated business taxable income ("UBTI"). While many investments in real
estate generate UBTI, the IRS has issued a published ruling that dividend
distributions from a REIT to an exempt employee pension trust do not constitute
UBTI, provided that the exempt employee pension trust does not otherwise use the
shares of the REIT in an unrelated trade or business of the pension trust. Based
on that ruling, amounts that the Company
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distributes to Exempt Organizations generally should not constitute UBTI.
However, if an Exempt Organization were to finance its acquisition of the common
shares with debt, a portion of the income that they receive from the Company
would constitute UBTI pursuant to the "debt-financed property" rules.
Furthermore, social clubs, voluntary employee benefit associations, supplemental
unemployment benefit trusts and qualified group legal services plans that are
exempt from taxation under paragraphs (7), (9), (17), and (20), respectively, of
Code section 501(c) are subject to different UBTI rules, which generally will
require them to characterize distributions that they receive from the Company as
UBTI. Finally, in certain circumstances, a qualified employee pension or profit
sharing trust that owns more than 10% of the Company's shares is required to
treat a percentage of the dividends that it receives from the Company as UBTI
(the "UBTI Percentage"). The UBTI Percentage is equal to the gross income the
Company derives from an unrelated trade or business (determined as if it were a
pension trust) divided by its total gross income for the year in which it pays
the dividends. The UBTI rule applies to a pension trust holding more than 10% of
the Company's shares only if:
. the UBTI Percentage is at least 5%;
. the Company qualifies as a REIT by reason of the modification of the 5/50
Rule that allows the beneficiaries of the pension trust to be treated as
holding the Company's shares in proportion to their actuarial interests in
the pension trust; and
. the Company is a "pension-held REIT" (i.e., either (1) one pension trust
owns more than 25% of the value of its shares or (2) a group of pension
trusts individually holding more than 10% of the value of its shares
collectively owns more than 50% of the value of its shares).
Tax-exempt entities will be subject to the rules described above, under the
heading "--U.S. Shareholders" concerning the inclusion of the Company's
designated undistributed net capital gains in the income of its shareholders.
Thus, such entities will, after satisfying filing requirements, be allowed a
credit or refund of the tax deemed paid by such entities in respect of such
includible gains.
Taxation of Non-U.S. Shareholders. The rules governing U.S. federal income
taxation of nonresident alien individuals, foreign corporations, foreign
partnerships, and other foreign shareholders (collectively, "Non-U.S.
shareholders") are complex. This section is only a summary of such rules. We
urge Non-U.S. shareholders to consult their own tax advisors to determine the
impact of federal, state, and local income tax laws on ownership of common
shares, including any reporting requirements.
Ordinary Dividends. A Non-U.S. shareholder that receives a distribution
that is not attributable to gain from the Company's sale or exchange of U.S.
real property interests (as defined below) and that the Company does not
designate as a capital gain dividend or retained capital gain will recognize
ordinary income to the extent that the Company pays such distribution
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out of its current or accumulated earnings and profits. A withholding tax equal
to 30% of the gross amount of the distribution ordinarily will apply to such
distribution unless an applicable tax treaty reduces or eliminates the tax.
However, if a distribution is treated as effectively connected with the Non-U.S.
shareholder's conduct of a U.S. trade or business, the Non-U.S. shareholder
generally will be subject to federal income tax on the distribution at graduated
rates, in the same manner as U.S. shareholders are taxed with respect to such
distributions (and also may be subject to the 30% branch profits tax in the case
of a Non-U.S. shareholder that is a non-U.S. corporation). The Company plans to
withhold U.S. income tax at the rate of 30% on the gross amount of any such
distribution paid to a Non-U.S. shareholder unless (i) a lower treaty rate
applies and the Non-U.S. shareholder files the required form evidencing
eligibility for that reduced rate with the Company or (ii) the Non-U.S.
shareholder files an IRS Form 4224 with the Company claiming that the
distribution is effectively connected income. The U.S. Treasury Department has
issued final regulations that modify the manner in which the Company will comply
with the withholding requirements. Those regulations are effective for
distributions made after December 31, 1999.
Distributions to a Non-U.S. shareholder that are designated by the Company
at the time of distribution as capital gain dividends which are not attributable
to or treated as attributable to the disposition by the Company of a U.S. real
property interest generally will not be subject to U.S. federal income taxation,
except as described below.
Return of Capital. A Non-U.S. shareholder will not incur tax on a
distribution in excess of the Company's current and accumulated earnings and
profits if such distribution does not exceed the adjusted basis of its common
shares. Instead, such a distribution will reduce the adjusted basis of such
common shares. A Non-U.S. shareholder will be subject to tax on a distribution
that exceeds both the Company's current and accumulated earnings and profits and
the adjusted basis of its common shares, if the Non-U.S. shareholder otherwise
would be subject to tax on gain from the sale or disposition of its common
shares, as described below. Because the Company generally cannot determine at
the time it makes a distribution whether or not the distribution will exceed its
current and accumulated earnings and profits, it normally will withhold tax on
the entire amount of any distribution at the same rate as it would withhold on a
dividend. However, a Non-U.S. shareholder may obtain a refund of amounts that
the Company withholds if it later determines that a distribution in fact
exceeded its current and accumulated earnings and profits.
The Company must withhold 10% of any distribution that exceeds its current
and accumulated earnings and profits. Consequently, although it intends to
withhold at a rate of 30% on the entire amount of any distribution, to the
extent that it does not do so, it will withhold at a rate of 10% on any portion
of a distribution not subject to withholding at a rate of 30%.
Capital Gain Dividends. For any year in which the Company qualifies as a
REIT, a Non-U.S. shareholder will incur tax on distributions that are
attributable to gain from its sale or exchange of "U.S. real property
interests" under the provisions of the Foreign Investment in
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Real Property Tax Act of 1980 ("FIRPTA"). The term "U.S. real property
interests" includes certain interests in real property and stock in corporations
at least 50% of whose assets consists of interests in real property, but
excludes mortgage loans and mortgage-backed securities. Under FIRPTA, a Non-U.S.
shareholder is taxed on distributions attributable to gain from sales of U.S.
real property interests as if such gain were effectively connected with a U.S.
business of the Non-U.S. shareholder. A Non-U.S. shareholder thus would be taxed
on such a distribution at the normal capital gain rates applicable to U.S.
shareholders (subject to applicable alternative minimum tax and a special
alternative minimum tax in the case of a nonresident alien individual). A non-
U.S. corporate shareholder not entitled to treaty relief or exemption also may
be subject to the 30% branch profits tax on distributions subject to FIRPTA. The
Company must withhold 35% of any distribution that it could designate as a
capital gain dividend. However, if the Company makes a distribution and later
designates it as a capital gain dividend, then (although such distribution may
be taxable to a Non-U.S. shareholder) it is not subject to withholding under
FIRPTA. Instead, the Company must make-up the 35% FIRPTA withholding from
distributions made after the designation, until the amount of distributions
withheld at 35% equals the amount of the distribution designated as a capital
gain dividend. A Non-U.S. shareholder may receive a credit against its FIRPTA
tax liability for the amount the Company withholds.
Sale of Shares. A Non-U.S. shareholder generally will not incur tax under
FIRPTA on gain from the sale of its common shares as long as the Company is a
"domestically controlled REIT." A "domestically controlled REIT" is a REIT in
which at all times during a specified testing period non-U.S. persons held,
directly or indirectly, less than 50% in value of the stock. The Company
anticipates that it will continue to be a "domestically controlled REIT."
However, a Non-U.S. shareholder will incur tax on gain not subject to FIRPTA if
(1) the gain is effectively connected with the Non-U.S. shareholder's U.S. trade
or business, in which case the Non-U.S. shareholder will be subject to the same
treatment as U.S. shareholders with respect to such gain, or (2) the Non-U.S.
shareholder is a nonresident alien individual who was present in the U.S. for
183 days or more during the taxable year and has a "tax home" in the United
States, in which case the Non-U.S. shareholder will incur a 30% tax on his
capital gains. Capital gains dividends not subject to FIRPTA will be subject to
similar rules. However, a Non-U.S. shareholder that owned, actually or
constructively, 5% or less of outstanding common shares at all times during a
specified testing period will not incur tax under FIRPTA if the common shares
are "regularly traded" on an established securities market. If the gain on the
sale of the common shares were taxed under FIRPTA, a Non-U.S. shareholder would
be taxed in the same manner as U.S. shareholders with respect to such gain
(subject to applicable alternative minimum tax, a special alternative minimum
tax in the case of nonresident alien individuals, and the possible application
of the 30% branch profits tax in the case of non-U.S. corporations).
Backup Withholding. Backup withholding tax (which generally is withholding
tax imposed at the rate of 31% on certain payments to persons that fail to
furnish certain information under the United States information reporting
requirements) and information reporting will generally not apply to
distributions to Non-U.S. shareholders outside the United States that are
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treated as (1) dividends subject to the 30% (or lower treaty rate) withholding
tax discussed above, (2) capital gains dividends, or (3) distributions
attributable to gain from the sale or exchange by the Company of United States
real property interests. As a general matter, backup withholding and
information reporting will not apply to a payment of the proceeds of a sale of
common shares by or through a foreign office of a foreign broker. Information
reporting (but not backup withholding) will apply, however, to a payment of the
proceeds of a sale of Common Shares by a foreign office of a broker that (a) is
a United States person, (b) derives 50% or more of its gross income for certain
periods from the conduct of a trade or business in the United States, or (c) is
a "controlled foreign corporation" (generally, a foreign corporation controlled
by U.S. shareholders) for United States tax purposes, unless the broker has
documentary evidence in its records that the holder is a Non-U.S. shareholder
and certain other conditions are met, or the shareholder otherwise establishes
an exemption. Payment to or through a United States office of a broker of the
proceeds of a sale of common shares is subject to both backup withholding and
information reporting unless the shareholder certifies under penalty of perjury
that the shareholder is a Non-U.S. shareholder, or otherwise establishes an
exemption. Backup withholding is not an additional tax. A Non-U.S. shareholder
may obtain a refund of any amounts withheld under the backup withholding rules
by filing the appropriate claim for refund with the IRS. The Treasury
Department has issued final regulations regarding backup withholding rules.
Those regulations alter the current system of backup withholding compliance and
are effective for distributions made after December 31, 1999.
OTHER TAX CONSEQUENCES
State and Local Taxes. The Company and/or you may be subject to state and
local tax in various states and localities, including those states and
localities in which the Company or you transact business, own property or
reside. The state and local tax treatment in such jurisdictions may differ from
the federal income tax treatment described above. Consequently, you should
consult your own tax advisor regarding the effect of state and local tax laws
upon an investment in the Common Stock.
TAX ASPECTS OF THE COMPANY'S INVESTMENTS IN THE PARTNERSHIP AND SUBSIDIARY
PARTNERSHIPS
The following discussion summarizes certain federal income tax
considerations applicable to the Company's direct or indirect investments in the
Partnership and its subsidiaries. The discussion does not cover state or local
tax laws or any federal tax laws other than income tax laws.
Classification as Partnerships. The Company is entitled to include in its
income its distributive share of the Partnership's income and to deduct its
distributive share of the Partnership's losses only if the Partnership is
classified for federal income tax purposes as a partnership rather than as a
corporation or association taxable as a corporation. An organization will be
classified as a partnership, rather than as a corporation, for federal income
tax purposes if it (1) is treated as a partnership under Treasury Regulations,
effective January 1, 1997, relating to
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entity classification (the "Check-the-Box Regulations") and (2) is not a
"publicly traded" partnership.
Under the Check-the-Box Regulations, an unincorporated entity with at least
two members may elect to be classified either as an association taxable as a
corporation or as a partnership. If such an entity fails to make an election, it
generally will be treated as a partnership for federal income tax purposes. The
Company believes that the Partnership and its subsidiaries are classified as
partnerships for federal income tax purposes.
A publicly traded partnership is a partnership whose interests are traded
on an established securities market or are readily tradable on a secondary
market (or the substantial equivalent thereof). While the units will not be
traded on an established securities market, they could possibly be deemed to be
traded on a secondary market or its equivalent due to the redemption rights
enabling the limited partners to dispose of their units. A publicly traded
partnership will not, however, be treated as a corporation for any taxable year
if 90% or more of the partnership's gross income for such year consists of
certain passive-type income, including (as may be relevant here) real property
rents, gains from the sale or other disposition of real property, interest, and
dividends (the "90% Passive Income Exception").
The U.S. Treasury has issued regulations (the "PTP Regulations") that
provide limited safe harbors from the definition of a publicly traded
partnership. Pursuant to one of those safe harbors (the "Private Placement
Exclusion"), interests in a partnership will not be treated as readily tradable
on a secondary market or the substantial equivalent thereof if (i) all interests
in the partnership were issued in a transaction (or transactions) that was not
required to be registered under the Securities Act of 1933, as amended, and (ii)
the partnership does not have more than 100 partners at any time during the
partnership's taxable year. In determining the number of partners in a
partnership, a person owning an interest in a flow-through entity (i.e., a
partnership, grantor trust, or S corporation) that owns an interest in the
partnership is treated as a partner in such partnership only if (i)
substantially all of the value of the owner's interest in the flow-through
entity is attributable to the flow-through entity's interest (direct or
indirect) in the partnership and (ii) a principal purpose of the use of the
flow-through entity is to permit the partnership to satisfy the 100-partner
limitation. The Company believes that the Partnership qualified for the Private
Placement Exclusion in 1998 and intends to continue to qualify for the Private
Placement Exclusion unless it qualifies for another exception. It is possible
that in the future the Partnership might not qualify for the Private Placement
Exclusion.
If the Partnership is considered a publicly traded partnership under the
PTP Regulations because it is deemed to have more than 100 partners, such
Partnership would need to qualify under another safe harbor in the PTP
Regulations or for the 90% Passive Income Exception. Because of the substantial
ownership of the Partnership by certain partners who also own, directly or
indirectly, lessees, the Partnership would not currently be eligible for the 90%
Passive Income Exception, but it may so qualify in the future.
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If, however, for any reason the Partnership were taxable as a corporation,
rather than as a partnership, for federal income tax purposes, the Company would
not be able to qualify as a REIT. See "--Requirements for Qualification --Income
Tests" and "--Requirements for Qualification -- Asset Tests." In addition, any
change in the Partnership's status for tax purposes might be treated as a
taxable event, in which case the Company might incur tax liability without any
related cash distribution. See "--Requirements for REIT Qualification --
Distribution Requirements." Further, items of income and deduction of the
Partnership would not pass through to its partners, and its partners would be
treated as shareholders for tax purposes. Consequently, the Partnership would be
required to pay income tax at corporate tax rates on its net income, and
distributions to its partners would constitute dividends that would not be
deductible in computing such Partnership's taxable income.
Income Taxation of the Partnerships and their Partners. Partners, not the
Partnership, are subject to taxation. The Partnership is not a taxable entity
for federal income tax purposes. Rather, the Company is required to take into
account its allocable share of the Partnership's income, gains, losses,
deductions and credits for any taxable year of the Partnership ending during the
taxable year of the Company, without regard to whether the Company has received
or will receive any distribution from the Partnership.
Partnership Allocations. Although a partnership agreement generally will
determine the allocation of income and losses among partners, such allocations
will be disregarded for tax purposes if they do not comply with the provisions
of section 704(b) of the Code and the Treasury regulations promulgated
thereunder. If an allocation is not recognized for federal income tax purposes,
the item subject to the allocation will be reallocated in accordance with the
partners' interests in the partnership, which will be determined by taking into
account all of the facts and circumstances relating to the economic arrangement
of the partners with respect to such item. The Partnership's allocations of
taxable income, gain and loss are intended to comply with the requirements of
section 704(b) of the Code and the Treasury regulations promulgated thereunder.
Tax Allocations With Respect to Contributed Properties. Pursuant to
section 704(c) of the Code, income, gain, loss and deduction attributable to
appreciated or depreciated property that is contributed to a partnership in
exchange for an interest in the partnership must be allocated in a manner such
that the contributing partner is charged with, or benefits from, respectively,
the unrealized gain or unrealized loss associated with the property at the time
of the contribution. The amount of such unrealized gain or unrealized loss is
generally equal to the difference between the fair market value of contributed
property at the time of contribution and the adjusted tax basis of such property
at the time of contribution (a "Book-Tax Difference"). Such allocations are
solely for federal income tax purposes and do not affect the book capital
accounts or other economic or legal arrangements among the partners. The
Partnership was formed by way of contributions of appreciated property and has
received contributions of appreciated property since the Company's formation.
Consequently, the Partnership Agreement requires such allocations to be made in
a manner consistent with section 704(c) of the Code.
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In general, the partners who contribute property to the Partnership will be
allocated depreciation deductions for tax purposes which are lower than such
deductions would be if determined on a pro rata basis. In addition, in the
event of the disposition of any of the contributed assets (including the
Properties) which have a Book-Tax Difference, all income attributable to such
Book-Tax Difference will generally be allocated to the contributing partners and
the Company will generally be allocated only its share of capital gains
attributable to appreciation, if any, occurring after the closing of the
Offering. This will tend to eliminate the Book-Tax Difference over the life of
the Partnership. However, the special allocation rules of Section 704(c) do not
always entirely eliminate the Book-Tax Difference on an annual basis or with
respect to a specific taxable transaction such as a sale. Thus, the carryover
basis of the contributed assets in the hands the Partnership will cause the
Company to be allocated lower depreciation and other deductions, and possibly an
amount of taxable income in the event of a sale of such contributed assets in
excess of the economic or book income allocated to it as a result of such sale.
This may cause the Company to recognize taxable income in excess of cash
proceeds, which might adversely affect the Company's ability to comply with the
REIT distribution requirements. See "--Taxation of the Company -- Distribution
Requirements." The foregoing principles also apply in determining the earnings
and profits of the Company for purposes of determining the portion of
distributions taxable as dividend income. The application of these rules over
time may result in a higher portion of distributions being taxed as dividends
than would have occurred had the Company purchased the contributed assets at
their agreed values.
The U.S. Treasury has issued regulations requiring partnerships to use a
"reasonable method" for allocating items affected by section 704(c) of the Code
and outlining several reasonable allocation methods. The general partner of the
Partnership has the discretion to determine which of the methods of accounting
for Book-Tax Differences (specifically approved in the Treasury Regulations)
will be elected with respect to any properties contributed to the Partnership.
The Partnership generally has elected to use the "traditional method with
ceiling rule" for allocating Code section 704(c) items with respect to the
properties that it acquires in exchange for units. The use of this method may
result in the Company being allocated less depreciation, and therefore more
taxable income in a given year than would be the case if a different method for
eliminating the Book-Tax Difference were chosen. If this occurred, a larger
portion of shareholder distributions would be taxable income as opposed to the
return of capital that might arise if another method were used. The Company has
not determined which method of accounting for Book-Tax Differences will be
elected for properties contributed to the Partnership in the future.
Basis in Partnership Interest. The Company's adjusted tax basis in its
partnership interest in the Partnership generally is equal to (1) the amount of
cash and the basis of any other property contributed to the Partnership by the
Company, (2) increased by (A) its allocable share of the Partnership's income
and (B) its allocable share of indebtedness of the Partnership, and (3) reduced,
but not below zero, by (A) the Company's allocable share of the Partnership's
loss, and
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(B) the amount of cash distributed to the Company, and (C) constructive
distributions resulting from a reduction in the Company's share of indebtedness
of the Partnership.
If the allocation of the Company's distributive share of the Partnership's
loss would reduce the adjusted tax basis of the Company's partnership interest
in the Partnership below zero, the recognition of such loss will be deferred
until such time as the recognition of such loss would not reduce the Company's
adjusted tax basis below zero. To the extent that the Partnership's
distributions, or any decrease in the Company's share of the indebtedness of the
Partnership (such decrease being considered a constructive cash distribution to
the partners), would reduce the Company's adjusted tax basis below zero, such
distributions (including such constructive distributions) would constitute
taxable income to the Company. Such distributions and constructive
distributions normally will be characterized as capital gain, and, if the
Company's interest in the Partnership has been held for longer than the long-
term capital gain holding period (currently one year), the distributions and
constructive distributions will constitute long-term capital gain.
Sale of a Partnership's Property. Generally, any gain realized by the
Partnership on the sale of property held by the Partnership for more than one
year will be long-term capital gain, except for any portion of such gain that is
treated as depreciation or cost recovery recapture. Any gain recognized by the
Partnership on the disposition of contributed properties will be allocated
first to the partners of the Partnership under section 704(c) of the Code to the
extent of their "built-in gain" on those properties for federal income tax
purposes. The partners' "built-in gain" on the contributed properties sold will
equal the excess of the partners' proportionate share of the book value of those
properties over the partners' tax basis allocable to those properties at the
time of the sale. Any remaining gain recognized by the Partnership on the
disposition of the contributed properties, and any gain recognized by the
Partnership on the disposition of the other properties, will be allocated among
the partners in accordance with their respective percentage interests in the
Partnership.
The Company's share of any gain realized by the Partnership on the sale of
any property held by the Partnership as inventory or other property held
primarily for sale to customers in the ordinary course of the Partnership's
trade or business will be treated as income from a prohibited transaction that
is subject to a 100% penalty tax. Such prohibited transaction income also may
have an adverse effect upon the Company's ability to satisfy the income tests
for REIT status. See "--Requirements for Qualification -- Income Tests." The
Company, however, does not presently intend to allow the Partnership to acquire
or hold any property that represents inventory or other property held primarily
for sale to customers in the ordinary course of the Company's or the
Partnership's trade or business.
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<PAGE>
PLAN OF DISTRIBUTION
The Company may sell securities on a negotiated or competitive bid basis to
or through one or more underwriters or dealers. The Company may also sell
securities directly to institutional investors or other purchasers or through
agents. The Company will identify any underwriter, dealer or agent involved in
the offer and sale of securities, and any applicable commissions, discounts and
other items constituting compensation to such underwriters, dealers or agents,
in a prospectus supplement.
The Company may distribute securities from time to time in one or more
transactions at a fixed price or prices (which may be changed) or at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, or at negotiated prices.
Unless the Company says otherwise in a prospectus supplement, the
obligations of any underwriters to purchase securities will be subject to
certain conditions and the underwriters will be obligated to purchase all of the
applicable securities if any are purchased. If a dealer is used in a sale, the
Company may sell the securities to the dealer as principal. The dealer may then
resell the securities to the public at varying prices to be determined by the
dealer at the time of resale.
The Company or its agents may solicit offers to purchase securities from
time to time. Unless the Company says otherwise in a prospectus supplement, any
agent will be acting on a best efforts basis for the period of its appointment.
In connection with the sale of securities, underwriters or agents may
receive compensation (in the form of discounts, concessions or commissions) from
the Company or from purchasers of securities for whom they may act as agents.
Underwriters may sell securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters and/or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers and agents that participate in the distribution
of securities may be deemed to be underwriters as that term is defined in the
Securities Act, and any discounts or commissions received by them from the
Company and any profits on the resale of the securities by them may be deemed to
be underwriting discounts and commissions under the Securities Act. The Company
will identify any such underwriter or agent, and it will describe any such
compensation it pays, in the related prospectus supplement.
Underwriters, dealers and agents may be entitled, under agreements with the
Company, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act.
If the Company tells you in a prospectus supplement, it will authorize
agents and underwriters to solicit offers by certain specified institutions to
purchase securities at the public offering price set forth in the prospectus
supplement pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. Institutions with whom such
contracts may be made include commercial and savings banks, insurance companies,
75
<PAGE>
pension funds, investment companies, educational and charitable institutions,
and other institutions but shall in all cases be subject to the Company's
approval. Such contracts will be subject only to those conditions set forth in
the prospectus supplement and the prospectus supplement will set forth the
commission payable for solicitation of such contracts. The obligations of any
purchaser under any such contract will be subject to the condition that the
purchase of the securities shall not be prohibited at the time of delivery under
the laws of the jurisdiction to which the purchaser is subject. The
underwriters and other agents will not have any responsibility in respect of the
validity or performance of such contracts.
Certain of the underwriters or agents and their associates may engage in
transactions with and perform services for the Company or its affiliates in the
ordinary course of their respective businesses.
The securities may or may not be listed on a national securities exchange
or traded in the over-the-counter market (other than the common shares, which
are quoted on The Nasdaq Stock Market). No assurance can be given as to the
liquidity of the trading market for any such securities.
If underwriters or dealers are used in the sale, until the distribution of
the securities is completed, SEC rules may limit the ability of any such
underwriters and selling group members to bid for and purchase the securities.
As an exception to these rules, representatives of any underwriters are
permitted to engage in certain transactions that stabilize the price of the
securities. Such transactions may consist of bids or purchases for the purpose
of pegging, fixing or maintaining the price of the securities. If the
underwriters create a short position in the securities in connection with the
offerings (in other words, if they sell more securities than are set forth on
the cover page of the prospectus supplement) the representatives of the
underwriters may reduce that short position by purchasing securities in the open
market. The representatives of the underwriters may also elect to reduce any
short position by exercising all or part of any over-allotment option described
in the prospectus supplement. The representatives of the underwriters may also
impose a penalty bid on certain underwriters and selling group members. This
means that if the representatives purchase securities in the open market to
reduce the underwriters' short position or to stabilize the price of the
securities, they may reclaim the amount of the selling concession from the
underwriters and selling group members who sold those shares as part of the
offering. In general, purchases of a security for the purpose of stabilization
or to reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases. The imposition of a penalty
bid might also have an effect on the price of the securities to the extent that
it discourages resales of the securities. The Company makes no representation
or prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the securities. In
addition, the representatives of any underwriters may determine not to engage in
such transactions or that such transactions, once commenced, may be discontinued
without notice.
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<PAGE>
LEGAL MATTERS
Certain legal matters in connection with any offering of securities made by
this prospectus will be passed upon for the Company by Wilmer, Cutler &
Pickering, Washington, D.C. In addition, the description of federal income tax
consequences contained in this prospectus under "Federal Income Tax
Consequences" is, to the extent that it constitutes matters of law, summaries of
legal matters or legal conclusions, the opinion of Wilmer, Cutler & Pickering.
EXPERTS
The financial statements and schedules of the Company incorporated by
reference in this prospectus and elsewhere in the Registration Statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
giving said reports.
The financial statements of Geneva Enterprises, Inc. and Affiliated
Company incorporated by reference in this prospectus and elsewhere in the
Registration Statement have been audited by Walpert, Smullian & Blumenthal,
P.A., independent public accountants, as indicated in their report with respect
thereto, and are incorporated by reference herein in reliance upon the authority
of said firm as experts in giving said reports.
WHERE YOU CAN FIND MORE INFORMATION
The Company files annual, quarterly and special reports, proxy statements
and other information with the SEC. The Company's SEC filings are available to
the public over the SEC's website at http://www.sec.gov. You may also read and
copy any document the Company files at the SEC's public reference rooms at:
* Public Reference Section
Securities and Exchange Commission
Room 1024, Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
* Midwest Regional Office:
Citicorp Center
500 West Madison Street
Suite 1400
Chicago, Illinois 60661-2511
* Northeast Regional Office:
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<PAGE>
7 World Trade Center
Suite 1300
New York, New York 10048
Please call the SEC at 1-800-SEC-0330 for further information on public
reference rooms.
The SEC allows the Company to "incorporate by reference" the information
the Company files with them, which means the Company can disclose important
information to you by referring you to those documents. The information that
the Company incorporates by reference is an important part of this prospectus,
and all information that the Company will later file with the SEC will
automatically update and supersede this information. The Company incorporates
by reference the documents listed below as well as any future filings made with
the SEC under Sections 13(a), 13(c), 12, or 15(d) of the Securities Exchange Act
of 1934 until the Company sells all of the securities.
. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, as amended, (File No. 000-23733).
. The description of the common shares contained in the Registration
Statement on Form 8-A filed with the SEC on February 5, 1998 (File No.
000-1049316).
. The financial statements of Geneva Enterprises, Inc. and Affiliated
Company contained in the Final Prospectus filed with the SEC pursuant
to Rule 424(b)(1) on February 13, 1998 (File No. 333-41183).
. Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998 (File No. 000-23733).
. Current Reports on Form 8-K filed with the SEC on August 7, 1998,
December 3, 1998, December 7, 1998 and February 26, 1999 (File No.
000-23733).
You may request a copy of these filings at no cost, by writing or
telephoning the Company. Those copies will not include exhibits to those
documents unless the exhibits are specifically incorporated by reference in the
documents or unless you specifically request them. You may also request copies
of any exhibits to the Registration Statement. Please direct your request to:
Ms. Lisa M. Clements
Capital Automotive REIT
1420 Spring Hill Road, Suite 525
McLean, Virginia 22102
(703) 288-3075
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<PAGE>
The prospectus and any accompanying prospectus supplement do not contain
all of the information included in the registration statement. The Company has
omitted certain parts of the registration statement in accordance with the rules
and regulations of the SEC. For further information, the Company refers you to
the registration statement, including its exhibits and schedules. Statements
contained in this prospectus and any accompanying prospectus supplement about
the provisions or contents of any contract, agreement or any other document
referred to are not necessarily complete. Please refer to the actual exhibit
for a more complete description of the matters involved. You may get copies of
the exhibits by contacting the person named above.
You should rely only on the information in this prospectus, any prospectus
supplement and the documents that are incorporated by reference. The Company
has not authorized anyone else to provide you with different information. The
Company is not offering these securities in any state where the offer is
prohibited by law. You should not assume that the information in this
prospectus, any prospectus supplement or any incorporated document is accurate
as of any date other than the date of the document.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT,
INCORPORATED BY REFERENCE OR PROVIDED IN A PROSPECTUS SUPPLEMENT.
THE COMPANY HAS NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS
DIFFERENT. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR
ANY SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON
THE FRONT OF THESE DOCUMENTS. THIS PROSPECTUS IS NOT AN OFFER
TO SELL SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table itemizes the expenses incurred, or to be incurred, by
the Registrant in connection with the registration and issuance of the Offered
Securities being registered hereunder. All amounts shown are estimates except
for the SEC registration fee.
<TABLE>
<CAPTION>
<S> <C>
Registration Fee -- Securities and Exchange
Commission................................... $ 55,600
Printing and Engraving Expenses.............. $ 200,000
Accounting Fees and Expenses................. $ 150,000
Legal Fees and Expenses...................... $ 150,000
Miscellaneous (including listing fees)....... $ 500,000
----------
Total................................... $1,055,600
</TABLE>
ITEM 15. INDEMNIFICATION OF TRUSTEES AND OFFICERS
The Declaration of Trust and By-laws authorize the Company to indemnify its
present and former trustees and officers and to pay or reimburse expenses for
such individuals in advance of the final disposition of a proceeding to the
maximum extent permitted from time to time under Maryland law. The Maryland
General Corporation Law as applicable to Maryland REITs, currently provides that
indemnification of a person who is a party, or threatened to be made a party, to
legal proceedings by reason of the fact that such a person is or was a trustee,
officer, employee or agent of a corporation, or is or was serving as a trustee,
officer, employee or agent of a corporation or other firm at the request of a
corporation, against judgments, fines, penalties, amounts paid in settlement and
reasonable expenses, is mandatory in certain circumstances and permissive in
others, subject to authorization by the board of trustees, a committee of the
board of trustees consisting of two or more trustees not parties to the
proceeding (if there does not exist a majority vote quorum of the board of
trustees consisting of trustees not parties to the proceeding), special legal
counsel appointed by the board of trustees or such committee of the board of
trustees, or by the shareholders, so long as it is not established that the act
or omission of such person was material to the matter giving rise to the
proceedings and was committed in bad faith, was the result of active and
deliberate dishonesty, involved such person receiving an improper personal
benefit in money, property or services, or, in the case of criminal proceedings,
such person had reason to believe that his or her act or omission was unlawful.
The Company's officers and trustees are also indemnified pursuant to the
Partnership Agreement. Certain officers are indemnified under their respective
employment agreements, which agreements are filed as exhibits hereto. The
Company intends to purchase an insurance policy which purports to
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<PAGE>
insure the officers and trustees of the Company against certain liabilities
incurred by them in the discharge of their functions as such officers and
trustees, except for liabilities resulting from their own malfeasance.
ITEM 16. EXHIBITS
NUMBER DESCRIPTION
1.2** Form of Underwriting Agreement (Common Shares)
1.3** Form of Underwriting Agreement (Preferred Shares)
1.4** Form of Underwriting Agreement (Debt Securities)
3.1 Amended and Restated Declaration of Trust of Capital Automotive REIT
(previously filed as Exhibit 3.1 to the Company's Registration
Statement on Form S-11 filed with the SEC on November 26, 1997, as
subsequently amended (File No. 333-41183) (the "Registration Statement
on Form S-11") and incorporated herein by reference)
3.2 Amended and Restated Bylaws of Capital Automotive REIT (previously
filed as Exhibit 3.2 to the Company's Registration Statement on Form
S-3 filed with the SEC on March 2, 1999 (File No. 333-Pending) (the
"Unit Redemption Registration Statement on Form S-3") and incorporated
herein by reference)
3.3 First Amendment to Bylaws (previously filed as Exhibit 3.3 to the
Company's Unit Redemption Registration Statement on Form S-3 and
incorporated herein by reference)
4.1 Specimen of certificate representing common shares of beneficial
interest (previously filed as Exhibit 4.2 to the Registration
Statement on Form S-11 and incorporated herein by reference)
4.2** Form of certificate representing preferred shares of beneficial
interest
4.3* Form of Indenture for Senior Debt Securities
4.4* Form of Indenture for Subordinated Debt Securities
4.5 Form of Share Warrant (previously filed as Exhibit 4.5 to the
Company's Unit Redemption Registration Statement on Form S-3 and
incorporated herein by reference)
5.1* Form of Opinion of Wilmer, Cutler & Pickering regarding the validity
of the Offered Securities being registered
8.1* Form of Opinion of Wilmer, Cutler & Pickering regarding certain
federal income tax matters
10.43 Second Amended and Restated Partnership Agreement (previously filed as
Exhibit 10.43 to the Company's Redemption Registration Statement on
Form S-3 and incorporated herein by reference)
12.1* Statement regarding computation of ratios
23.1 Consent of Wilmer, Cutler & Pickering (included as part of Exhibits
5.1 and 8.1)
23.2* Consent of Arthur Andersen LLP
23.3* Consent of Walpert, Smullian & Blumenthal, P.A.
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25 Power of Attorney (included on signature page)
* Included with this filing.
** To be filed by amendment or by a Current Report on Form 8-K
incorporated by reference herein.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any acts 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
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) herein do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to the
SEC by the registrants pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
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(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes 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 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) The undersigned registrant hereby undertakes to supplement the
prospectus, after the expiration of a subscription period, if any, to set forth
the results of a subscription offer, if any, the transactions by the
underwriters during a subscription period, if any, the amount of unsubscribed
securities, if any, to be purchased by underwriters, and the terms of any
subsequent reoffering thereof, if any. If any public offering by the
underwriters is to be made on terms differing from those set forth on the cover
page of the prospectus, a post-effective amendment will be filed to set forth
the terms of such offering.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrants pursuant to the provisions described under Item 15
above, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the respective registrant of expenses incurred or paid by a
director, officer, or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, such
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
(e) The undersigned registrant Capital Automotive REIT, hereby undertakes
to file an application for the purpose of determining the eligibility of the
trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in
accordance with the rules and regulations prescribed by the SEC under Section
305(b)(2) of the Act.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrants certify that they have reasonable grounds to believe that they meet
all of the requirements for filing on Form S-3 and have duly caused this
Registration Statement to be signed on their behalf by the undersigned,
thereunto duly authorized, in the County of Fairfax, Commonwealth of Virginia,
on March 1, 1999.
THE REGISTRANT:
Capital Automotive REIT
By: /s/ Thomas D. Eckert
--------------------
Thomas D. Eckert
President and Chief Executive Officer
ADDITIONAL REGISTRANT:
Capital Automotive L.P.
By: Capital Automotive REIT, as sole general partner of
Capital Automotive L.P.
By: /s/ Thomas D. Eckert
____________________
Thomas D. Eckert
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below on March 1, 1999 by the
following persons in the capacities indicated. Each person whose signature
appears below hereby constitutes and appoints Thomas D. Eckert as his attorney-
in-fact and agent, with full power of substitution and resubstitution for him in
any and all capacities, to sign any or all amendments or post-effective
amendments to this Registration Statement, or any Registration Statement for the
same offering that is to be effective upon filing pursuant to Rule 462(b) under
the Securities Act of 1933, and to file the same, with exhibits thereto and
other documents in connection therewith or in connection with the registration
of the securities under the Securities Act of 1934, as amended, with the
Securities and Exchange Commission, granting unto such attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary in connection with such matters and hereby ratifying and
confirming all that such attorney-in-fact and agent or his substitutes may do or
cause to be done by virtue hereof.
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<PAGE>
SIGNATURE TITLE DATE
/s/ Thomas D. Eckert President and Chief March 1, 1999
- ------------------------ Executive Officer and
Thomas D. Eckert Trustee of Capital
Automotive REIT
(principal executive
officer)
/s/ David S. Kay Vice President and Chief March 1, 1999
- ------------------------ Financial Officer (principal
David S. Kay financial and accounting
officer) of Capital
Automotive REIT
/s/ Craig L. Fuller Trustee of Capital March 1, 1999
- ------------------------ Automotive REIT
Craig L. Fuller
/s/ William E. Hoglund Trustee of Capital March 1, 1999
- ------------------------ Automotive REIT
William E. Hoglund
/s/ R. Michael McCullough Trustee of Capital March 1, 1999
- ------------------------- Automotive REIT
R. Michael McCullough
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/s/ Lee P. Munder Trustee of Capital March 1, 1999
- ------------------------ Automotive REIT
Lee P. Munder
/s/ John J. Pohanka Trustee of Capital March 1, 1999
- ------------------------ Automotive REIT
John J. Pohanka
/s/ John E. Reilly Trustee of Capital March 1, 1999
- ------------------------ Automotive REIT
John E. Reilly
/s/ Robert M. Rosenthal Trustee of Capital March 1, 1999
- ------------------------ Automotive REIT
Robert M. Rosenthal
/s/ Vincent A. Sheehy Trustee of Capital March 1, 1999
- ------------------------ Automotive REIT
Vincent A. Sheehy
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Trustee of Capital March _, 1999
- -------------------------- Automotive REIT
William R. Swanson
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EXHIBIT 4.3
(FORM OF SENIOR INDENTURE)
CAPITAL AUTOMOTIVE REIT, as Issuer,
and
__________________, as Trustee
SENIOR INDENTURE
Dated as of ___________, ___
Providing for Issuance of
Senior Debt Securities in Series
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
RECITALS OF THE COMPANY................................................................................................... 2
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION........................................................................................ 2
Section 101. Definitions............................................................................ 2
Section 102. Other Definitions...................................................................... 12
Section 103. Compliance Certificates and Opinions................................................... 13
Section 104. Form of Documents Delivered to Trustee................................................. 13
Section 105. Acts of Holders........................................................................ 14
Section 106. Notices, etc., to Trustee, the Company and any Guarantor............................... 15
Section 107. Notice to Holders; Waiver.............................................................. 16
Section 108. Conflict with Trust Indenture Act...................................................... 16
Section 109. Effect of Headings and Table of Contents............................................... 17
Section 110 Successors and Assigns................................................................. 17
Section 111. Separability Clause.................................................................... 17
Section 112. Benefits of Indenture.................................................................. 17
Section 113. Governing Law.......................................................................... 17
Section 114. Legal Holidays......................................................................... 17
Section 115. Schedules and Exhibits................................................................. 18
Section 116. Counterparts........................................................................... 18
ARTICLE TWO SECURITY FORMS............................................................................................. 18
Section 201. Forms Generally........................................................................ 18
Section 202. Form of and Provisions Required in Global Security..................................... 19
Section 203. Form of Trustee's Certificate of Authentication........................................ 19
Section 204. Form of Guarantee of Each of the Guarantors............................................ 20
ARTICLE THREE THE SECURITIES............................................................................................. 21
Section 301. Amount Unlimited; Issuable in Series................................................... 21
Section 302. Denominations.......................................................................... 25
Section 303. Execution, Authentication, Delivery and Dating......................................... 25
Section 304. Temporary Securities................................................................... 27
Section 305. Global Securities...................................................................... 27
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Section 306. Registration, Registration of Transfer and Exchange.................................... 29
Section 307. Mutilated, Destroyed, Lost and Stolen Securities....................................... 30
Section 308. [RESERVED]............................................................................. 31
Section 309. Payment of Interest; Interest Rights Preserved......................................... 31
Section 310. Persons Deemed Owners.................................................................. 32
Section 311. Cancellation........................................................................... 33
Section 312. Computation of Interest................................................................ 33
Section 313. CUSIP Numbers.......................................................................... 33
ARTICLE FOUR DEFEASANCE AND COVENANT DEFEASANCE......................................................................... 34
Section 401. Company's Option to Effect Defeasance or Covenant Defeasance........................... 34
Section 402. Defeasance and Discharge............................................................... 34
Section 403. Covenant Defeasance.................................................................... 35
Section 404. Conditions to Defeasance or Covenant Defeasance........................................ 35
Section 405. Deposited Money and U.S. Government Obligations to Be Held in Trust;
Other Miscellaneous Provisions ........................................................ 37
Section 406. Reinstatement.......................................................................... 38
ARTICLE FIVE REMEDIES................................................................................................... 38
Section 501. Events of Default...................................................................... 38
Section 502. Acceleration of Maturity; Rescission and Annulment..................................... 40
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee........................ 41
Section 504. Trustee May File Proofs of Claim....................................................... 42
Section 505. Trustee May Enforce Claims without Possession of Securities............................ 43
Section 506. Application of Money Collected......................................................... 43
Section 507. Limitation on Suits.................................................................... 44
Section 508. Unconditional Right of Holders to Receive Principal, Premium and Interest.............. 44
Section 509. Restoration of Rights and Remedies..................................................... 45
Section 510. Rights and Remedies Cumulative......................................................... 45
Section 511. Delay or Omission Not Waiver........................................................... 45
Section 512. Control by Holders..................................................................... 45
Section 513. Waiver of Past Defaults................................................................ 46
Section 514. Undertaking for Costs.................................................................. 46
</TABLE>
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<TABLE>
<S> <C>
Section 515. Waiver of Stay, Extension or Usury Laws................................................ 46
ARTICLE SIX THE TRUSTEE................................................................................................ 47
Section 601. Notice of Defaults..................................................................... 47
Section 602. Certain Rights of Trustee ............................................................. 47
Section 603. Trustee Not Responsible for Recitals, Dispositions of Securities or Application
of Proceeds Thereof.................................................................... 49
Section 604. Trustee and Agents May Hold Securities; Collections; etc............................... 49
Section 605. Money Held in Trust.................................................................... 49
Section 606. Compensation and Indemnification of Trustee and Its Prior Claim........................ 49
Section 607. Conflicting Interests.................................................................. 50
Section 608. Corporate Trustee Required; Eligibility................................................ 50
Section 609. Resignation and Removal; Appointment of Successor Trustee.............................. 51
Section 610. Acceptance of Appointment by Successor................................................. 52
Section 611. Merger, Conversion, Consolidation or Succession to Business............................ 54
Section 612. Preferential Collection of Claims Against Company...................................... 54
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY.......................................................... 55
Section 701. Company to Furnish Trustee Names and Addresses of Holders.............................. 55
Section 702. Disclosure of Names and Addresses of Holders........................................... 55
Section 703. Reports by Trustee..................................................................... 55
Section 704. Reports by Company and Guarantors...................................................... 56
ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE....................................................... 56
Section 801. Company or Any Guarantor May Consolidate, etc., Only on Certain Terms.................. 56
Section 802. Successor Substituted.................................................................. 58
ARTICLE NINE SUPPLEMENTAL INDENTURES.................................................................................... 59
Section 901. Supplemental Indentures and Agreements without Consent of Holders...................... 59
</TABLE>
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Section 902. Supplemental Indentures and Agreements with Consent of Holders......................... 60
Section 903. Execution of Supplemental Indentures and Agreements.................................... 61
Section 904. Effect of Supplemental Indentures...................................................... 61
Section 905. Conformity with Trust Indenture Act.................................................... 62
Section 906. Reference in Securities to Supplemental Indentures..................................... 62
ARTICLE TEN COVENANTS............................................................................................... 62
Section 1001. Payment of Principal, Premium and Interest............................................. 62
Section 1002. Maintenance of Office or Agency........................................................ 62
Section 1003. Money for Security Payments to Be Held in Trust........................................ 63
Section 1004. Corporate Existence.................................................................... 64
Section 1005. Payment of Taxes and Other Claims...................................................... 65
Section 1006. Maintenance of Properties.............................................................. 65
Section 1007. Insurance.............................................................................. 65
Section 1008. Statement by Officers as to Default.................................................... 66
Section 1009. Waiver of Certain Covenants............................................................ 66
ARTICLE ELEVEN REDEMPTION OF SECURITIES................................................................................ 66
Section 1101. Rights of Redemption................................................................... 66
Section 1102. Applicability of Article............................................................... 67
Section 1103. Election to Redeem; Notice to Trustee.................................................. 67
Section 1104. Selection by Trustee of Securities to Be Redeemed...................................... 67
Section 1105. Notice of Redemption................................................................... 67
Section 1106. Deposit of Redemption Price............................................................ 68
Section 1107. Securities Payable on Redemption Date.................................................. 69
Section 1108. Securities Redeemed or Purchased in Part............................................... 69
ARTICLE TWELVE SATISFACTION AND DISCHARGE.............................................................................. 70
Section 1201. Satisfaction and Discharge of Indenture................................................ 70
Section 1202. Application of Trust Money............................................................. 71
ARTICLE THIRTEEN GUARANTEE............................................................................................... 71
Section 1301. Guarantors' Guarantee.................................................................. 71
Section 1302. Continuing Guarantee; No Right of Set-Off; Independent Obligation...................... 72
Section 1303. Guarantee Absolute..................................................................... 73
Section 1304. Right to Demand Full Performance....................................................... 75
</TABLE>
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Section 1305. Waivers................................................................................ 75
Section 1306. The Guarantors Remain Obligated in Event the Company Is No Longer Obligated to
Discharge Indenture Obligations........................................................ 76
Section 1307. Fraudulent Conveyance; Contribution Subrogation........................................ 76
Section 1308. Guarantee Is in Addition to Other Security............................................. 76
Section 1309. Release of Security Interests.......................................................... 77
Section 1310. No Bar to Further Actions.............................................................. 77
Section 1311. Failure to Exercise Rights Shall Not Operate as a Waiver; No Suspension of Remedies.... 77
Section 1312. Trustee's Duties; Notice to Trustee.................................................... 77
Section 1313. Successors and Assigns................................................................. 78
Section 1314. Release of Guarantee................................................................... 78
Section 1315. Execution of Guarantee................................................................. 78
</TABLE>
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Reconciliation and ties between Trust Indenture Act of 1939, as amended,
and Indenture, dated as of ____________, 1999.
Trust Indenture Act Section Indenture Section(s)
- --------------------------- --------------------
(S)(S) 310 (a)(1) 608
(a)(2) 608
(b) 607, 609
(S)(S) 311 (a) 612
(S)(S) 312 (a) 701
(b) 702
(c) 702
(S)(S) 313 (a) 703
(c) 703, 704
(S)(S) 314 (a) 704
(a)(4) 1008
(c)(1) 103, 104, 404, 1103
(c)(2) 103, 104, 404, 1103
(e) 103
(S)(S) 315 (a) 602, 903
(b) 601
(c) 602
(d) 602
(e) 514
(S)(S) 316 (a)(last sentence) 101
(a)(1)(A) 512
(a)(1)(B) 513
(b) 508
(c) 105
(S)(S) 317 (a)(1) 503
(a)(2) 504
(b) 1003
(S)(S) 318 (a) 108
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of this Indenture.
<PAGE>
INDENTURE, dated as of ____________, ___, between Capital Automotive REIT,
a real estate investment trust organized under the laws of the State of Maryland
(the "Company"), and _______________________________________________, a national
banking association organized under the laws of the United States of America, as
trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsubordinated
debentures, notes or other evidences of indebtedness ("Securities") to be issued
in one or more series as herein provided.
This Indenture is subject to, and shall be governed by, the provisions of
the Trust Indenture Act that are required to be part of and to govern indentures
qualified under the Trust Indenture Act.
All acts and things necessary have been done to make (i) the Securities of
any series, when their terms have been determined in accordance with this
Indenture and when executed by the Company and authenticated and delivered
hereunder and duly issued by the Company, the valid obligations of the Company,
(ii) the Guarantees, if and when executed by each of the Guarantors and
delivered hereunder, the valid obligation of each of the Guarantors and (iii)
this Indenture a valid agreement of the Company and, if applicable, each of the
Guarantors in accordance with the terms of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities or of any series thereof,
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 as set forth pursuant to Section 301 or unless the context otherwise
requires:
(a) the terms defined in this Article have the meanings assigned to them in
this Article, and include the plural as well as the singular;
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(b) 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;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
(d) the words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision; and
(e) all references to $, US$, dollars or United States dollars shall refer
to the lawful currency of the United States of America.
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person, (ii) any other Person that
owns, directly or indirectly, 5% or more of such Person's Equity Interest or any
officer or director of any such Person or other Person or, with respect to any
natural Person, any Person having a relationship with such Person or other
Person by blood, marriage or adoption not more remote than first cousin or (iii)
any other Person 10% or more of the voting Equity Interests of which are
beneficially owned or held directly or indirectly by such specified Person. For
the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person directly or indirectly, whether through ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Bankruptcy Law" means Title 11, United States Bankruptcy Code of 1978, as
amended, or any similar United States federal or state law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or
relief of debtors or any amendment to, succession to or change in any such law.
"Bearer Security" means any Security issued hereunder which is payable to
bearer.
"Board of Trustees" means the board of trustees of the Company or any
Guarantor, as the case may be, or any duly authorized committee of such board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company or any Guarantor, as the case may be,
to have been duly adopted by the Board of Trustees or similar governing body of
such entity and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in The City of New York, the
Commonwealth of
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Virginia or the city in which the Corporate Trust Office is located are
authorized or obligated by law or executive order to close.
"Capital Lease Obligation" means any obligation of the Company and its
Restricted Subsidiaries on a Consolidated basis under any capital lease of real
or personal property which, in accordance with GAAP, has been recorded as a
capitalized lease obligation.
"Cash Equivalents" means, (i) any evidence of Indebtedness with a maturity
of one year or less from the date of acquisition issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof); (ii) certificates of deposit
or acceptances with a maturity of one year or less from the date of acquisition
of any financial institution that is a member of the Federal Reserve System
having combined capital and surplus and undivided profits of not less than
$500,000,000; (iii) commercial paper with a maturity of one year or less from
the date of acquisition issued by a Person that is not an Affiliate of the
Company organized under the laws of any state of the United States or the
District of Columbia and rated A-1 (or higher) according to S&P or P-1 (or
higher) according to Moody's or at least an equivalent rating category of
another nationally recognized securities rating agency; (iv) any money market
deposit accounts issued or offered by a domestic commercial bank having capital
and surplus in excess of $500,000,000; and (v) repurchase agreements and reverse
repurchase agreements relating to marketable direct obligations issued or
unconditionally guaranteed by the government of the United States of America or
issued by any agency thereof and backed by the full faith and credit of the
United States of America, in each case maturing within one year from the date of
acquisition; provided that the terms of such agreements comply with the
guidelines set forth in the Federal Financial Agreements of Depository
Institutions With Securities Dealers and Others, as adopted by the Comptroller
of the Currency on October 31, 1985.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means Capital Automotive REIT, a real estate investment trust
organized under the laws of the State of Maryland, until a successor Person
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by any one of its Chairman of the Board, its
Vice Chairman, its President
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or a Vice President (regardless of vice presidential designation), and by any
one of its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Trustee.
"Consolidated Net Worth" means the consolidated equity of the holders of
Equity Interests (excluding Disqualified Equity Interests) of the Company and
its Restricted Subsidiaries, as determined in accordance with GAAP consistently
applied.
"Corporate Trust Office" means the office of the Trustee or an affiliate or
agent thereof at which at any particular time the corporate trust business for
the purposes of this Indenture shall be principally administered, which office
at the date of execution of this Indenture is located at ______________________.
"Default" means any event which is, or after notice or passage of any time
or both would be, an Event of Default.
"Depositary" means, with respect to the Securities issued in the form of
Global Securities, if any, The Depository Trust Company, a New York limited
purpose corporation, its nominees and successors, or any other Person designated
as the Depositary by the Company pursuant to Section 305(b), in each case
registered as a "clearing agency" under the Exchange Act and maintaining a book-
entry system that qualifies for treatment as "registered form" under Section
163(f) of the Code.
"Disqualified Equity Interests" means any Equity Interests that, either by
their terms or by the terms of any security into which they are convertible or
exchangeable or otherwise, are or upon the happening of an event or passage of
time would be required to be redeemed prior to any Stated Maturity of the
principal of the Securities or are redeemable at the option of the holder
thereof at any time prior to any such Stated Maturity, or are convertible into
or exchangeable for debt securities at any time prior to any such Stated
Maturity at the option of the holder thereof.
"Equity Interest" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock or other equity
participations, including without limitation partnership interests, whether
general or limited, and interests in limited liability companies, of such
Person, including any Preferred Equity Interests.
"Event of Default" has the meaning specified in Article Five.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, with respect to any asset or property, the sale
value that would be obtained in an arm's-length transaction between an informed
and willing seller under no compulsion to sell and an informed and willing buyer
under no compulsion to buy.
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<PAGE>
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied, which
are in effect on the date of this Indenture.
"Global Security" means a Security of any series in book entry form
evidencing all or part of the Securities of any series, issued to the Depositary
or its nominee and registered in the name of the Depositary or such nominee.
"Guarantee" means, in respect of the Securities of any series, the
guarantee, if any, by any Guarantor, if any, of the Company's Indenture
Obligations pursuant to a guarantee given in accordance with Section 301 of this
Indenture, including, without limitation, the Guarantees by the Guarantors, if
any, included in Article Thirteen of this Indenture.
"Guaranteed Debt" of any Person means, without duplication, all
Indebtedness of any other Person referred to in the definition of Indebtedness
contained in this Section guaranteed directly or indirectly in any manner by
such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (i) to pay or purchase such Indebtedness or to advance or
supply funds for the payment or purchase of such Indebtedness, (ii) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such
Indebtedness or to assure the holder of such Indebtedness against loss, (iii) to
supply funds to, or in any other manner invest in, the debtor (including any
agreement to pay for property or services without requiring that such property
be received or such services be rendered), (iv) to maintain working capital or
equity capital of the debtor, or otherwise to maintain the net worth, solvency
or other financial condition of the debtor or (v) otherwise to assure a creditor
against loss; provided that the term "guarantee" shall not include endorsements
for collection or deposit, in either case in the ordinary course of business.
"Guarantor," as of any time, means, in respect of a series of Securities, a
Subsidiary which provides a Guarantee pursuant to Section 301 of the Indenture
or any other guarantor of the Indenture Obligations. Guarantors, if any, will be
listed as signatories to any supplemental indenture of any series of Securities
which provide for Guarantees.
"Holder" means a Person in whose name a Security of any series is
registered in the Security Register.
"Indebtedness" means, with respect to any Person, without duplication, (i)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, excluding any trade payables and other accrued
current liabilities arising in the ordinary course of business, but including,
without limitation, all obligations, contingent or otherwise, of such Person in
connection with any letters of credit issued under letter of credit facilities,
acceptance facilities or other similar facilities and in connection with any
agreement to purchase, redeem, exchange, convert or otherwise acquire for value
any Equity Interests of such
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Person, or any warrants, rights or options to acquire such Equity Interests, now
or hereafter outstanding, (ii) all obligations of such Person evidenced by
bonds, notes, debentures or other similar instruments, (iii) all indebtedness
created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even if the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), but excluding trade
payables arising in the ordinary course of business, (iv) all Capital Lease
Obligations of such Person, (v) all Indebtedness referred to in clauses (i)
through (iv) above of other Persons and all dividends of other Persons, the
payment of which is secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien, upon or
with respect to property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness, (vi) all Guaranteed Debt of such
Person, (vii) all Disqualified Equity Interests valued at the greater of their
voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid
dividends, and (viii) any amendment, supplement, modification, deferral,
renewal, extension, refunding or refinancing of any liability of the types
referred to in clauses (i) through (vii) above. The amount of Indebtedness of
any Person at any date shall be, without duplication, the principal amount that
would be shown on a balance sheet of such Person prepared as of such date in
accordance with GAAP and the maximum determinable liability of any Guaranteed
Debt referred to in clause (vi) above at such date. The Indebtedness of the
Company and its Restricted Subsidiaries shall not include any Indebtedness of
Unrestricted Subsidiaries so long as such Indebtedness is non-recourse to the
Company and the Restricted Subsidiaries. For purposes hereof, the "maximum fixed
repurchase price" of any Disqualified Equity Interests which do not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Equity Interests as if such Disqualified Equity Interests were
purchased on any date on which Indebtedness shall be required to be determined
pursuant to this Indenture, and if such price is based upon, or measured by, the
Fair Market Value of such Disqualified Equity Interests, such Fair Market Value
to be determined in good faith by the Board of Trustees or similar governing
body of the issuer of such Disqualified Equity Interests.
"Indenture" means this instrument as originally executed and 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, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively. The term
"Indenture" shall also include the terms of particular series of Securities
established as contemplated by Section 301.
"Indenture Obligations" means the obligations of the Company and any other
obligor under this Indenture or under the Securities of any series, including
any Guarantor, to pay principal, premium, if any, and interest when due and
payable under the Securities of that series, and all other amounts due or to
become due under or in connection with this Indenture, the
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Securities of that series, and the performance of all other obligations to the
Trustee and the Holders under this Indenture and the Securities of that series,
according to the terms hereof and thereof.
"Independent Director" means a director of the Company other than a
director (i) who (apart from being a director of the Company or any Subsidiary)
is an employee, insider, associate or Affiliate of the Company or a Subsidiary
or has held any such position during the previous five years or (ii) who is a
director, an employee, insider, associate or Affiliate of another party to the
transaction in question.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Investments" means, with respect to any Person, directly or indirectly,
any advance, loan (including guarantees), or other extension of credit or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase, acquisition or ownership by such Person of any Equity
Interests, bonds, notes, debentures or other securities or assets issued or
owned by any other Person and all other items that would be classified as
investments on a balance sheet prepared in accordance with GAAP.
"Lien" means any mortgage, charge, pledge, lien (statutory or otherwise),
privilege, security interest, hypothecation or other encumbrance upon or with
respect to any property of any kind (including any conditional sale or other
title retention agreement, any leases in the nature thereof, and any agreement
to give any security interest), real or personal, movable or immovable, now
owned or hereafter acquired.
"Maturity" when used with respect to any Security means the date on which
the principal of such Security becomes due and payable as therein provided or as
provided in this Indenture, whether at Stated Maturity, or the Redemption Date
and whether by declaration of acceleration, call for redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc. or any successor rating
agency.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, Vice Chairman, the President or a Vice President (regardless of vice
presidential designation), and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company or any Guarantor, as the
case may be, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, any of the Guarantors or the Trustee, unless an Opinion of
Independent Counsel is required pursuant to the terms of this Indenture, and who
shall be acceptable to the Trustee.
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"Opinion of Independent Counsel" means a written opinion of counsel issued
by someone who is not an employee or consultant of the Company or any Guarantor
and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security that: (1) provides
for an amount less than the stated principal amount thereof to be due and
payable upon declaration of acceleration of the Maturity thereof pursuant to
Section 301 or (2) does not provide for the payment of interest prior to
maturity.
"Outstanding" when used with respect to Securities of any series means,
unless otherwise provided pursuant to Section 301, as of the date of
determination, all Securities theretofore authenticated and delivered under this
Indenture, except:
(a) Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment or
redemption money in the necessary amount has been theretofore deposited
with the Trustee or any Paying Agent (other than the Company or any
Affiliate thereof) in trust or set aside and segregated in trust by the
Company or such Affiliate (if the Company or such Affiliate shall act as
the Paying Agent) for the Holders; provided that if such Securities are to
be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor reasonably satisfactory to the Trustee has
been made;
(c) Securities, except to the extent provided in Sections 402 and
403, with respect to which the Company has effected defeasance or covenant
defeasance as provided in Article Four; and
(d) Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which there shall
have been presented to the Trustee proof reasonably satisfactory to it that
such Securities are held by a bona fide purchaser in whose hands the
Securities are valid obligations of the Company; provided, however, that in
determining whether the Holders of the requisite principal amount of
Outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by the
Company, any Guarantor, or any other obligor upon the Securities or any
Affiliate of the Company, any Guarantor, or such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the
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reasonable satisfaction of the Trustee the pledgee's right so to act with
respect to such Securities and that the pledgee is not the Company, any
Guarantor or any other obligor upon the Securities or any Affiliate of the
Company, any Guarantor or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of, premium, if any, or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, real estate investment trust,
limited liability company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivisions thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 307 in exchange for a mutilated
Security or in lieu of a lost, destroyed or stolen Security shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Security.
"Preferred Equity Interest," as applied to the Equity Interest of any
Person, means an Equity Interest of any class or classes (however designated)
which is preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such person, over Equity Interests of any other class of such
Person.
"Qualified Equity Interests" of any Person means any and all Equity
Interests of such Person other than Disqualified Equity Interests.
"Redemption Date" when used with respect to any Security to be redeemed
pursuant to any provision in this Indenture 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
pursuant to any provision in this Indenture means the price at which it is to be
redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
means the 15th day (whether or not a Business Day) next preceding such Interest
Payment Date.
"Responsible Officer" when used with respect to the Trustee means any
officer assigned to the Corporate Trust Office or the agent of the Trustee
appointed hereunder, including any vice president, assistant vice president,
assistant secretary, or any other officer or assistant officer of the Trustee or
the agent of the Trustee appointed hereunder to whom any corporate trust matter
is referred because of his or her knowledge of and familiarity with the
particular subject.
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"Restricted Subsidiary" means a Subsidiary subject to the covenants or
events of default under the agreements governing other indebtedness of the
Company.
"S&P" means Standard & Poor's Ratings Service, a division of the McGraw
Hill Companies, or any successor rating agency.
"Securities" has the meaning specified in the Recitals.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 306.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 309.
"Stated Maturity" when used with respect to any Indebtedness or any
installment of interest thereon, means the date specified in such Indebtedness
as the fixed date on which the principal of such Indebtedness or such
installment of interest is due and payable.
"Subsidiary" means any Person a majority of the equity ownership or the
Voting Stock of which is at the time owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries.
"Successor Security" of any particular Security means every Security issued
after, and evidencing all or a portion of the same debt as that evidenced by,
such particular Security. For the purposes of this definition, any Security
authenticated and delivered under Section 307 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Temporary Cash Investments" means (i) any evidence of Indebtedness,
maturing not more than one year after the date of acquisition, issued by the
United States of America, or an instrumentality or agency thereof and guaranteed
fully as to principal, premium, if any, and interest by the United States of
America, (ii) any certificate of deposit, maturing not more than one year after
the date of acquisition, issued by, or time deposit of, a commercial banking
institution (including the Trustee) that is a member of the Federal Reserve
System and that has combined capital and surplus and undivided profits of not
less than $500,000,000, whose debt has a rating, at the time as of which any
investment therein is made, of
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"P-1" (or higher) according to Moody's or "A-1" (or higher) according to S&P,
(iii) commercial paper, maturing not more than one year after the date of
acquisition, issued by a Person (other than an Affiliate or Subsidiary of the
Company) (including the Trustee) organized and existing under the laws of the
United States of America with a rating, at the time as of which any investment
therein is made, of "P-1" (or higher) according to Moody's or "A-1" (or higher)
according to S&P and (iv) any money market deposit accounts issued or offered by
a domestic commercial bank (including the Trustee) having capital and surplus in
excess of $500,000,000.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument, until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee and, if at any time, there is more than one Trustee,
"Trustee" as used with respect to the Securities of any series shall mean the
Trustee with respect to the Securities of that series.
"U.S. Person" means a citizen or resident of the United States, a
corporation, real estate investment trust, partnership, limited liability
company or other entity created or organized in or under the laws of the United
States or any political subdivision thereof, or an estate or trust, the income
of which is subject to United States federal income taxation regardless of its
source.
"Unrestricted Subsidiary," with respect to any series of Securities, shall
have the meaning set forth as provided pursuant to Section 301.
"Voting Stock" means stock of the class or classes pursuant to which the
holders thereof have the general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of a
Person (irrespective of whether or not at the time stock of any other class or
classes shall have or might have voting power by reason of the happening of any
contingency).
Section 102. Other Definitions.
-----------------
DEFINED IN
TERM SECTION
---- -------
"Act" 105
"Agent Members" 305
"Bearer Global Security" 305
"Covenant Defeasance" 403
"Defaulted Interest" 309
"Defeasance" 402
"Defeasance Redemption Date" 404
-----------------------------------------------------------------
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"Defeased Securities" 401
"Global Security" 202
"Initial Blockage Period" 1203
"Payment Blockage Period" 1203
"Physical Securities" 305
"Senior Representative" 1203
"Surviving Entity" 801
"U.S. Government Obligations" 404
Section 103. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company, any Guarantor and any
other obligor on the Securities of any series shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture (including any covenants compliance with which constitutes
a condition 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,
certificates and/or opinions 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 of Counsel with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
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(d) a statement as to whether, in the opinion of each such individual, such
condition or covenant has been complied with.
Section 104. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company, any Guarantor or
other obligor of the Securities of any series may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company, any Guarantor or
other obligor of the Securities of any series stating that the information with
respect to such factual matters is in the possession of the Company, any
Guarantor or other obligor of the Securities of that series, unless such counsel
knows that the certificate or opinion or representations with respect to such
matters are erroneous. Opinions of Counsel required to be delivered to the
Trustee may have qualifications customary for opinions of the type required and
counsel delivering such Opinions of Counsel may rely on certificates of the
Company or government or other officials customary for opinions of the type
required, including certificates certifying as to matters of fact, including
that various financial covenants have been complied with.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 105. 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 may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Procedures in connection
with acts of Holders with respect to Bearer Securities shall be as provided
pursuant to Section 301. Such instrument or instruments (and the action
embodied therein and evidenced
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thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture, if made in the manner provided in this Section. The fact and date of
the execution by any person of any such instrument or writing or the authority
of the person executing the same, may also be proved in any other manner which
the Trustee deems sufficient in accordance with such reasonable rules as the
Trustee may determine.
(b) The ownership of Securities of any series shall be proved by the
Security Register.
(c) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Security of any series shall bind every
future Holder of the same Security of that series or the Holder of every
Security of that series issued upon the transfer thereof or in exchange therefor
or in lieu thereof, in respect of anything done, suffered or omitted to be done
by the Trustee, any Paying Agent or the Company or any Guarantor in reliance
thereon, whether or not notation of such action is made upon such Security.
(d) If the Company shall solicit from the Holders of Securities of one or
more series any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, by or pursuant to a Board
Resolution, fix in advance a record date for the determination of such Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
Notwithstanding Trust Indenture Act Section 316(c), any such record date shall
be the record date specified in or pursuant to such Board Resolution, which
shall be a date not more than 30 days prior to the first solicitation of Holders
generally in connection therewith and no later than the date such solicitation
is completed.
In the absence of any such record date fixed by the Company, regardless as
to whether a solicitation of the Holders of Securities of one or more series is
occurring on behalf of the Company or any Holder, the Trustee may, at its
option, fix in advance a record date for the determination of such Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Trustee shall have no obligation to do so.
Any such record date shall be a date not more than 30 days prior to the first
solicitation of Holders generally in connection therewith and no later than a
date such solicitation is completed.
If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for purposes of determining
whether Holders of Securities of one or more series of the requisite proportion
of Securities then Outstanding have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other Act,
and for this purpose the Securities
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of any series then Outstanding shall be computed as of such record date;
provided that no such request, demand, authorization, direction, notice,
consent, waiver or other Act 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 six months after the record date.
Section 106. Notices, etc., to Trustee, the Company and any Guarantor.
--------------------------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company or any Guarantor or any
other obligor of the Securities shall be sufficient for every purpose hereunder
if in writing and mailed, first-class postage prepaid, or delivered by
recognized overnight courier, to or with the Trustee at the Corporate Trust
Office, Attention: Corporate Trust Division, or at any other address previously
furnished in writing to the Holders, the Company, any Guarantor, any other
obligor of the Securities by the Trustee; or
(b) the Company or any Guarantor shall be sufficient for every purpose
(except as provided in Section 501(c)) hereunder or pursuant to Section 301 if
in writing and mailed, first-class postage prepaid, or delivered by recognized
overnight courier, to the Company or such Guarantor addressed to it at Capital
Automotive REIT, 1420 Spring Hill Road, Suite 525, McLean, Virginia 22102,
Attention: President, or at any other address previously furnished in writing to
the Trustee by the Company.
Section 107. Notice to Holders; Waiver.
-------------------------
Where this Indenture or the Securities of any series provides for notice to
Holders of the Securities of any series of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, or delivered by recognized overnight
courier, to each Holder affected by such event, at his address as it appears in
the Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice, nor
any defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Any notice when
mailed to a Holder in the aforesaid manner shall be conclusively deemed to have
been received by such Holder whether or not actually received by such Holder.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver. Notices to Holders of Bearer Securities shall be
provided as may be specified pursuant to Section 301.
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In case by reason of the suspension of regular mail service or by reason of
any other cause, it shall be impracticable to mail notice of any event as
required by any provision of this Indenture, then any method of giving such
notice as shall be reasonably satisfactory to the Trustee shall be deemed to be
a sufficient giving of such notice.
Section 108. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with any provision
of the Trust Indenture Act or another provision which is required or deemed to
be included in this Indenture by any of the provisions of the Trust Indenture
Act, the provision or requirement of the Trust Indenture Act shall control. If
any provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
Section 109. 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.
Section 110 Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company and the
Guarantors shall bind their successors and assigns, whether so expressed or not.
Section 111. Separability Clause.
-------------------
In case any provision in this Indenture or in the Securities of any series
or in any Guarantees 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 112. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities or the Guarantees, express
or implied, shall give to any Person (other than the parties hereto and their
successors hereunder, any Paying Agent and the Holders) any benefit or any legal
or equitable right, remedy or claim under this Indenture.
Section 113. Governing Law.
-------------
THIS INDENTURE AND THE SECURITIES OF ANY SERIES AND ANY INTEREST COUPONS
APPERTAINING THERETO AND ANY GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE
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LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF).
Section 114. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security of any series shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal or premium, if any, need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date or Redemption Date, or at the
Stated Maturity and no interest shall accrue with respect to such payment for
the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, to the next succeeding Business Day.
Section 115. Schedules and Exhibits.
----------------------
All schedules and exhibits attached hereto are by this reference made a
part hereof with the same effect as if herein set forth in full.
Section 116. Counterparts.
------------
This Indenture may be executed in any number of counterparts, each of which
shall be an original; but such counterparts shall together constitute but one
and the same instrument.
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally.
---------------
The Securities of each series and the Trustee's certificate of
authentication and the interest coupons, if any, to be attached thereto shall be
in substantially such form as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with the rules of any applicable securities
exchange, organizational document, governing instrument or law or as may,
consistently herewith, be determined by the officers executing the Securities of
that series and interest coupons, if any, to be attached thereto, as evidenced
by their execution of the Securities and interest coupons, if any. If temporary
Securities of any series are issued as permitted by Section 304, the form
thereof also shall be established as provided in the preceding sentence. If the
forms of Securities and interest
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coupons, if any, of any series are established by, or by action taken pursuant
to, a Board Resolution, a copy of the Board Resolution together with an
appropriate record of any such action taken pursuant thereto, including a copy
of the approved form of Securities or interest coupons, if any, shall be
delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 for the authentication and delivery of such
Securities. Any portion of the text of any Security may be set forth on the
reverse thereof, with an appropriate reference thereto on the face of the
Security.
Unless otherwise provided pursuant to Section 301, Bearer Securities, if
any, shall have interest coupons attached.
The definitive Securities of any series shall be printed, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange on which the
Securities of that series may be listed, all as determined by the officers
executing such Securities, as evidenced by their execution of such Securities.
Section 202. Form of and Provisions Required in Global Security.
--------------------------------------------------
If Securities of or within a series are issuable in whole or in part in
global form, such Global Securities will be subject to Sections 301, 303, 304
(if applicable), 305 and 306.
Unless otherwise provided pursuant to Section 301, any Global Security
issued hereunder shall bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
IF THE DEPOSITORY TRUST COMPANY IS ACTING AS THE DEPOSITARY, INSERT --
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND ANY SUCH
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
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NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Section 203. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
Unless otherwise provided pursuant to Section 301, the Trustee's
certificate of authentication shall be included on the Securities and shall be
substantially in the form as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Securities referred to in the within-mentioned
Indenture.
[Name of Trustee]
-------------------
As Trustee
By:
-------------------
Authorized Signatory
Section 204. Form of Guarantee of Each of the Guarantors.
-------------------------------------------
If a Guarantee is to be endorsed on a Security of any series, the form of
Guarantee shall be set forth on the Securities substantially as follows:
GUARANTEES
For value received, each of the undersigned hereby unconditionally
guarantees, jointly and severally, to the holder of this Security the payment of
principal of, premium, if any, and interest on this Security in the amounts and
at the time when due and interest on the overdue principal and interest, if any,
of this Security, if lawful, and the payment or performance of all other
obligations of the Company under the Indenture or the Securities, to the holder
of this
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Security and the Trustee, all in accordance with and subject to the terms and
limitations of this Security and Article Thirteen of the Indenture. These
Guarantees will not become effective until the Trustee duly executes the
certificate of authentication on this Security.
[LIST OF GUARANTORS]
Attest:
By: _______________________ By: __________________________
Name: _____________________ Name: _________________________
Title: _____________________ Title: ________________________
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ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series.
------------------------------------
(a) The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited. The Securities
may be issued from time to time in one or more series.
(b) The following matters shall be established with respect to
each series of Securities issued hereunder (i) by a Board Resolution, (ii) by
action taken pursuant to a Board Resolution and (subject to Section 303) set
forth, or determined in the manner provided, in an Officers' Certificate or
(iii) in one or more indentures supplemental hereto:
(1) the title of the Securities of the series (which title
shall distinguish the Securities of the series from all other series of
Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered under
this Indenture (which limit shall not pertain to Securities authenticated
and delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of the series pursuant to Section 304, 306, 307,
906 or 1108 or any Securities of the series that, pursuant to Section 303,
are deemed never to have been authenticated and delivered hereunder);
(3) the date or dates on which the principal of and premium,
if any, on the Securities of the series will mature or the method or
methods of determining such date or dates;
(4) the rate or rates (which may be fixed or variable) at
which the Securities of the series shall bear interest, if any, or the
method or methods of calculating such rate or rates;
(5) the date or dates from which such interest, if any,
shall accrue or the method or methods by which such date or dates shall be
determined;
(6) the date or dates on which interest, if any, shall be
payable and the record date or dates therefor, and the basis upon which
interest shall be calculated if other than that of a 360-day year of twelve
30-day months;
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(7) the place or places where the principal of, premium, if
any, and interest, if any, on Securities of the series shall be payable, or
at which Securities of the series may be surrendered for registration of
transfer and exchange;
(8) the period or periods within which, the price or prices
at which, the currency or currencies if other than in United States dollars
(including currency unit or units) in which, and the other terms and
conditions upon which, Securities of the series may be redeemed, in whole
or in part, at the option of the Company;
(9) the obligation, if any, of the Company to redeem or
purchase Securities of the series pursuant to any sinking fund or analogous
provisions or upon the happening of a specified event or at the option of a
Holder thereof and the period or periods within which, the price or prices
at which, the currency or currencies (if other than United States dollars)
(including currency unit or units) in which, and the other terms and
conditions upon which, Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(10) the denominations in which Securities of the series are
authorized to be issued;
(11) the currency or currency unit in which such Securities
may be denominated and/or the currency or currencies (including currency
unit or units) in which principal of, premium, if any, and interest, if
any, on such Securities will be payable and whether the Company or the
holders of any such Securities may elect to receive payments in respect of
such Securities in a currency or currency unit other than that in which
such Securities are stated to be payable;
(12) if the amount of payments of principal of, premium, if
any, and interest, if any, on the Securities of the series may be
determined with reference to an index, formula or other method (which
index, formula or method may be based, without limitation, on a currency or
currencies (including currency unit or units) other than that in which the
Securities of the series are denominated or designated to be payable), the
manner in which such amounts will be determined;
(13) if other than the entire principal amount thereof, the
portion of the principal amount of such Securities of the series which
shall be payable upon declaration of acceleration thereof pursuant to
Section 502 or the method by which such portion shall be determined;
(14) provisions, if any, granting special rights to the
Holders of Securities of the series upon the occurrence of such events as
may be specified;
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(15) any addition to, modifications of or deletion from the
Events of Default set forth in Section 501 or covenants of the Company set
forth in Article Nine pertaining to the Securities of the series;
(16) the circumstances, if any, under which the Company will
pay additional amounts on the Securities of that series held by a Person
who is not a U.S. Person (including any modification of the definition of
such term) in respect of taxes, assessments or similar charges;
(17) whether Securities of the series shall be issuable in
registered or bearer form (with or without interest coupons), or both, and
any restrictions applicable to the offering, sale, transfer or delivery of
Bearer Securities and, if other than as provided in Section 306, the terms
upon which Bearer Securities of a series may be exchanged for Securities of
the same series and vice versa;
(18) the date as of which any Bearer Securities of the
series and any temporary Global Security representing Outstanding
Securities of the series shall be dated, if other than the date of original
issuance of the first Security of the series to be issued;
(19) the forms of the Securities and interest coupons, if
any, of the series;
(20) if other than the Trustee, the identity of the
Registrar and any Paying Agent;
(21) the application, if any, of such means of defeasance or
covenant defeasance as may be specified for such Securities of that series;
(22) whether such Securities of the series are to be issued
in whole or in part in the form of one or more temporary or permanent
Global Securities, and, if so, the identity of the Depositary or its
nominee, if any, for such Global Securities, and the circumstances under
which the beneficial owners of interests in any Securities of the series in
global form may exchange such interests for certificated Securities of that
series, to be registered in the names of or to be held by such beneficial
owners or their nominees;
(23) if the Securities of the series may be issued or
delivered, or any installment of principal or interest is payable, only
upon receipt of certain certificates or other documents or satisfaction of
other conditions in addition to those specified in this Indenture, the form
and terms of such certificates, documents or conditions;
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(24) if other than as provided in Section 309, the Person to
whom any interest on any Security of the series shall be payable and the
manner in which, or the Person to whom, any interest on any Bearer
Securities of the series shall be payable;
(25) any definitions for Securities of that series which are
not to be as set forth in this Indenture, including, without limitation,
the definition of "Unrestricted Subsidiary" to be used for that series;
(26) whether such Debt Securities are guaranteed and, if so,
the identity of the Guarantors and the terms of such Guarantees (including
whether and the extent to which the Guarantees are subordinated to the
other indebtedness of the Guarantors);
(27) the terms, if any, upon which the Company may be able
to redeem such Debt Securities prior to their maturity including the dates
on which such redemptions may be made and the price at which such
redemptions may be made;
(28) the terms, if any, upon which such Securities of any
series may be converted or exchanged into or for Common Shares, Preferred
Shares or other securities or property of the Company;
(29) any restrictions on the registration, transfer or
exchange of the Securities; and
(30) any other terms not inconsistent with the terms of the
Indenture pertaining to the Securities or which may be required by or
advisable under United States laws or regulations or advisable (as
determined by the Company) in connection with the marketing of Securities
of the series.
(c) All provisions set forth in this Indenture shall be
applicable to each series of Debt Securities issued hereunder unless otherwise
specified in a supplemental indenture entered into pursuant to this Section 301,
in which case the provisions of the supplemental indenture shall govern and
references herein to "unless otherwise provided pursuant to Section 301" are not
intended to limit what provisions may be amended pursuant to any supplemental
indenture. Subject to Sections 108, 113 and any controlling provision of the
Trust Indenture Act, in the event of any inconsistency between the terms of this
Indenture and the terms applicable to a series of Securities established in the
manner permitted by this Section 301, the (i) Board Resolution, (ii) Officers'
Certificate or (iii) supplemental indenture setting forth such conflicting term
shall prevail.
(d) All Securities of any one series and interest coupons,
if any, appertaining thereto shall be substantially identical except as to
denomination and except as may otherwise be provided (i) by a Board Resolution,
(ii) by action taken pursuant to a Board
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Resolution and (subject to Section 303) set forth, or determined in the manner
provided, in the related Officers' Certificate or (iii) in an 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 that series.
(e) If any of the terms of the Securities of any series are
established by action taken pursuant to a Board Resolution, a copy of such Board
Resolution shall be delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth, or providing the manner for determining,
the terms of the Securities of that series, and an appropriate record of any
action taken pursuant thereto in connection with the issuance of any Securities
of that series shall be delivered to the Trustee prior to the authentication and
delivery thereof.
(f) Unless otherwise provided pursuant to Section 301,
payment of the principal of, premium, if any, and interest on the Securities
shall be made at the office or agency of the Company maintained for that purpose
as the Company may designate pursuant to Section 301, in the United States, in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however, that
at the option of the Company payment of interest may be made (i) by check mailed
to addresses of the Persons entitled thereto as such addresses shall appear on
the Security Register or (ii) by wire transfer in immediately available funds to
an account specified (not later than one Business Day prior to the applicable
Interest Payment Date) by the Holder thereof. If any of the Securities are held
by the Depository, payments of interest may be made by wire transfer to the
Depository. Procedures with respect to payments in connection with Bearer
Securities shall be established pursuant to Section 301.
Section 302. Denominations.
-------------
Unless otherwise provided pursuant to Section 301, the Securities shall be
issuable only in registered form without coupons and only in denominations of
$1,000 and any integral multiple of $1,000, and Bearer Securities shall be
issued in denominations of $5,000 or any integral multiple of $5,000.
Securities denominated in a foreign currency shall be issuable in such
denominations as are established with respect to such Securities in or pursuant
to this Indenture.
Section 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
Unless otherwise provided pursuant to Section 301, the Securities of any
series shall be executed on behalf of the Company by one of its Chairman of the
Board, its President or one of its Vice Presidents under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries.
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Securities and interest coupons, if any, on Securities bearing the manual
or facsimile signatures of individuals who were at any time the proper officers
of the Company shall bind the Company, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices on the date of such
Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities, together with any interest
coupons appertaining thereto, of any series executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities; and the Trustee in accordance with such Company
Order shall authenticate and deliver such Securities as provided in this
Indenture and not otherwise.
Each Security shall be dated the date of its authentication.
No Security of any series shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein duly executed by the Trustee by manual signature of an authorized
officer, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder.
Unless otherwise provided pursuant to Section 301, in case the Company or
any Guarantor, pursuant to Article Eight, shall be consolidated, merged with or
into any other Person or shall sell, assign, convey, transfer or lease
substantially all of its properties and assets to any Person, and the successor
Person resulting from such consolidation, or surviving such merger, or into
which the Company or such Guarantor shall have been merged, or the Person which
shall have received a sale, assignment, conveyance, transfer or lease as
aforesaid, shall have executed an indenture supplemental hereto with the Trustee
pursuant to Article Eight, any of the Securities authenticated or delivered
prior to such consolidation, merger, sale, assignment, conveyance, transfer or
lease may, from time to time, at the request of the successor Person, be
exchanged for other Securities executed in the name of the successor Person with
such changes in phraseology and form as may be appropriate, but otherwise in
substance of like tenor as the Securities surrendered for such exchange and of
like principal amount; and the Trustee, upon Company Request of the successor
Person, shall authenticate and deliver Securities as specified in such request
for the purpose of such exchange. If Securities shall at any time be
authenticated and delivered in any new name of a successor Person pursuant to
this Section in exchange or substitution for or upon registration of transfer of
any Securities, such successor Person, at the option of the Holders but without
expense to them, shall provide for the exchange of all Securities at the time
Outstanding for Securities authenticated and delivered in such new name.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities on behalf of the Trustee. Unless limited by the
terms of such
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appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as any Security Registrar or Paying Agent to deal with the Company
and its Affiliates.
The Bearer Securities will be transferable by delivery. Other terms,
conditions and restrictions in connection with Bearer Securities will be as
provided pursuant to Section 301.
The specific terms of the depositary arrangement with respect to any
portion of a series of Securities to be represented by a Global Security will be
as provided pursuant to Section 301.
Section 304. Temporary Securities.
--------------------
Unless otherwise provided pursuant to Section 301, pending the preparation
of definitive Securities of any series, the Company may execute, and upon
Company Order, the Trustee shall authenticate and deliver, temporary Securities
which are printed, lithographed, typewritten or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Securities
of any series in lieu of which they are issued 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.
Unless otherwise provided pursuant to Section 301, after the preparation of
definitive Securities of any series, the temporary Securities of any series
shall be exchangeable for definitive Securities of that series upon surrender of
the temporary Securities of that series at the office or agency of the Company
designated for such purpose pursuant to Section 1002, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Securities
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like principal amount of definitive Securities of authorized
denominations. Until so exchanged the temporary Securities of any series shall
in all respects be entitled to the same benefits under this Indenture as
definitive Securities of that series.
Section 305. Global Securities.
-----------------
(a) Unless otherwise provided pursuant to Section 301, any Global Security
of any series shall, if the Depositary permits, (i) be registered in the name of
the Depositary for such Global Security or the nominee of such Depositary, (ii)
be deposited with, or on behalf of, the Depositary and (iii) bear legends as set
forth in Section 202; provided, that the Securities are eligible to be in the
form of a Global Security.
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any Global Security held on their
behalf by the Depositary, or the Trustee as its custodian, or under the Global
Security, and the Depositary may be treated
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by the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or shall
impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a holder of any
Security.
The Securities of any series may also be issued in whole or in part in the
form of one or more bearer global securities (a "Bearer Global Security") that
will be deposited with a depositary, or with a nominee for such a depositary, as
provided pursuant to Section 301. Any Bearer Global Security may be issued in
temporary or permanent form. The specific terms and procedures, including the
specific terms of the depositary arrangement, with respect to any portion of a
series of Securities to be represented by one or more Bearer Global Securities
will be as provided pursuant to Section 301.
(b) Unless otherwise provided pursuant to Section 301, transfers of the
Global Security of a series shall be limited to transfers of such Global
Security in whole, but not in part, to the Depositary, its successors or their
respective nominees. Interests of beneficial owners in a Global Security may be
transferred in accordance with the rules and procedures of the Depositary. Under
the circumstances described in this clause (b) below, beneficial owners shall
obtain physical securities in the form provided pursuant to Section 301
("Physical Securities") in exchange for their beneficial interests in a Global
Security in accordance with the Depositary's and the Securities Registrar's
procedures. In connection with the execution, authentication and delivery of
such Physical Securities, the Security Registrar shall reflect on its books and
records a decrease in the principal amount of the Global Security equal to the
principal amount of such Physical Securities and the Company shall execute and
the Trustee shall authenticate and deliver one or more Physical Securities
having an equal aggregate principal amount. Unless otherwise provided pursuant
to Section 301, the Securities will be delivered in certificated form if (i) the
Depositary ceases to be registered as a clearing agency under the Exchange Act
or is not willing or no longer willing or able to provide securities depository
services with respect to the Securities and a successor depositary is not
appointed by the Company within 90 days, (ii) the Company, in its sole
discretion, so determines or (iii) there shall have occurred an Event of Default
or an event which, with the giving of notice or lapse of time or both, would
constitute an Event of Default with respect to the Securities represented by
such Global Security and such Event of Default or event continues for a period
of 90 days.
(c) In connection with any transfer of a portion of the beneficial
interest in a Global Security to a Physical Security pursuant to subsection (b)
of this Section to beneficial owners, the Security Registrar shall reflect on
its books and records the date and a decrease in the principal amount of a
Global Security in an amount equal to the principal amount of the beneficial
interest in the Global Security to be transferred, and the Company shall
execute, and
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the Trustee shall authenticate and deliver, one or more Physical Securities of
like tenor and amount.
(d) In connection with the transfer of the entire Global Security of any
series to beneficial owners pursuant to subsection (b) of this Section, a Global
Security shall be deemed to be surrendered to the Trustee for cancellation, and
the Company shall execute, and the Trustee shall authenticate and deliver, to
each beneficial owner identified by the Depositary in exchange for its
beneficial interest in a Global Security, an equal aggregate principal amount of
Physical Securities of authorized denominations.
(e) The registered holder of a Global Security may grant proxies and
otherwise authorize any person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
Section 306. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
Unless otherwise provided pursuant to Section 301, the Company shall cause
to be kept at the Corporate Trust Office of the Trustee, or such other office as
the Trustee may designate, a register (the register maintained in such office
and in any other office or agency designated pursuant to Section 1002 being
herein sometimes referred to as the "Security Register") in which, subject to
such reasonable regulations as the Security Registrar may prescribe, the Company
shall provide for the registration of Securities of any series and of transfers
of Securities of any series. The Trustee or an agent thereof shall initially be
the "Security Registrar" for the purpose of registering Securities of any series
and transfers of Securities of any series as herein provided.
Procedures with respect to the registration and registration of transfer
and exchange, and other matters related thereto, with respect to Bearer
Securities shall be provided pursuant to Section 301.
Unless otherwise provided pursuant to Section 301, upon surrender for
registration of transfer of any Security of any series at the office or agency
of the Company designated pursuant to Section 1002, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities of that series of any
authorized denomination or denominations, of a like aggregate principal amount.
Furthermore, any Holder of a Global Security shall, by acceptance of such
Global Security, agree that transfers of beneficial interest in such Global
Security may be effected only through a book-entry system maintained by the
Holder of such Global Security (or its agent), and that ownership of a
beneficial interest in the Securities shall be required to be reflected in a
book entry.
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Unless otherwise provided pursuant to Section 301, at the option of the
Holder, Securities of any series may be exchanged for other Securities of that
series of any authorized denomination or denominations, of a like aggregate
principal amount, upon surrender of the Securities of that series to be
exchanged at such office or agency. Whenever any Securities of any series are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities of that series which the Holder making
the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities of any series shall be the valid obligations of the Company,
evidencing the same Indebtedness, and entitled to the same benefits under this
Indenture, as the Securities of the series surrendered upon such registration of
transfer or exchange.
Unless otherwise provided pursuant to Section 301, every Security presented
or surrendered for registration of transfer, or for exchange or redemption shall
(if so required by the Company or the Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange or redemption of Securities of any series, but the Company
may require payment of a sum sufficient to pay all documentary, stamp or similar
issue or transfer taxes or other governmental charges that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Sections 303, 304, 305, 306, 307 and 906, not
involving any transfer.
Unless otherwise provided pursuant to Section 301, the Company shall not be
required (a) to issue, register the transfer of or exchange any Security of any
series during a period beginning at the opening of business (i) 15 days before
the date of selection of Securities of that series for redemption under Section
1104 and ending at the close of business on the day of such selection or (ii) 15
days before an Interest Payment Date and ending on the close of business on the
Interest Payment Date, or (b) to register the transfer of or exchange any
Security of that series so selected for redemption in whole or in part, except
the unredeemed portion of Securities of that series being redeemed in part.
Except as otherwise permitted pursuant to Section 304, any Security of a
series authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, any Global Security, whether pursuant to this
Section, Sections 304, 307, 906 or 1108 or otherwise, shall also be a Global
Security and bear the legend specified in Section 202.
Section 307. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
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If, (a) any mutilated Security of any series is surrendered to the Trustee,
or (b) the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security of any series, and there is delivered
to the Company, each Guarantor and the Trustee, such security or indemnity, in
each case, as may be required by them to save each of them harmless, then, in
the absence of notice to the Company, any Guarantor or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company shall execute
and upon its written request the Trustee shall authenticate and deliver, in
exchange for any such mutilated Security or in lieu of any such destroyed, lost
or stolen Security, a replacement Security of that series of like tenor and
principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security of any
series has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a replacement Security of that series, pay
such Security.
Upon the issuance of any replacement Securities of that series under this
Section, the Company may require the payment of a sum sufficient to pay all
documentary, stamp or similar issue or transfer taxes or other governmental
charges that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee) connected therewith.
Every replacement Security of a series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security of that series shall constitute
an original additional contractual obligation of the Company and the Guarantors,
if any, whether or not the destroyed, lost or stolen Security of that series
shall be at any time enforceable by anyone, and shall be entitled to all
benefits of this Indenture equally and proportionately with any and all other
Securities of the same series duly issued hereunder.
Procedures relating to mutilated, destroyed, lost or stolen Bearer
Securities shall be provided pursuant to Section 301.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section 308. [RESERVED]
Section 309. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Unless otherwise provided pursuant to Section 301, interest on any Security
of a series 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 that
Security of that series is registered at the close of business on the Regular
Record Date for such interest.
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Unless otherwise provided pursuant to Section 301, any interest on any
Security of a series which is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date and interest on such defaulted
interest at the then applicable interest rate borne by the Securities of that
series, to the extent lawful (such defaulted interest and interest thereon
herein collectively called "Defaulted Interest") shall forthwith cease to be
payable to the Holder on the Regular Record Date; and such Defaulted Interest
may be paid by the Company, at its election in each case, as provided in
Subsection (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities of that series are registered at the close
of business on a Special Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid on
each Security of that series and the date (not less than 30 days after such
notice) of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this Subsection provided.
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company in writing of such Special Record Date. In the
name and at the expense of the Company, the Trustee 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 at his address as it
appears in the Security Register, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Securities of that series are
registered on such Special Record Date and shall no longer be payable pursuant
to the following Subsection (b).
(b) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of that series may be listed, and upon such notice as
may be required by such exchange, if, after written notice given by the Company
to the Trustee of the proposed payment pursuant to this Subsection, such payment
shall be deemed practicable by the Trustee.
Payment of interest and preservation of interest rights of Bearer
Securities shall be set forth pursuant to Section 301.
Subject to the foregoing provisions of this Section, each Security of any
series delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other
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Security of the same series shall carry the rights to interest accrued and
unpaid, and to accrue, which were carried by such other Security of the same
series.
Section 310. Persons Deemed Owners.
---------------------
Unless otherwise provided pursuant to Section 301, the Company, any
Guarantor, the Trustee and any agent of the Company, any Guarantor or the
Trustee may treat the Person in whose name any Security of any series is
registered as the owner of such Security for the purpose of receiving payment of
principal of, premium, if any, and (subject to Section 309) interest on such
Security and for all other purposes whatsoever, whether or not such Security is
overdue, and neither the Company, any Guarantor, the Trustee nor any agent of
the Company, any Guarantor or the Trustee shall be affected by notice to the
contrary.
Unless otherwise provided as contemplated by Section 301, the Company, any
Guarantor, the Trustee and any agent of the Company, any Guarantor or the
Trustee may treat the bearer of any Bearer Security of any series and the bearer
of any interest coupon as the absolute owner of such Bearer Security or interest
coupon for the purpose of receiving payment thereof or on account thereof and
for all other purposes whatsoever, whether or not such Bearer Security or
interest coupon be overdue, and neither the Company, any Guarantor, the Trustee
nor any agent of the Company, the Guarantor or the Trustee shall be affected by
notice to the contrary.
No holder of any beneficial interest in any Global Security of any series
held on its behalf by a Depositary of that series shall have any rights under
this Indenture with respect to such Global Security of that series, and such
Depositary may be treated by the Company, any Guarantor, the Trustee and any
agent of the Company, any Guarantor or the Trustee as the owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, any Guarantor, the Trustee or any agent of the
Company, any Guarantor or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
impair, as between the Depositary and such holders of beneficial interests, the
operation of customary practices governing the exercise of the rights of the
Depositary (or its nominee) as Holder of any Security of any series.
Section 311. Cancellation.
------------
All Securities of any series surrendered for payment, purchase, redemption,
registration of transfer or exchange shall be delivered to the Trustee and, if
not already cancelled, shall be promptly cancelled by it. The Company and any
Guarantor may at any time deliver to the Trustee for cancellation any Securities
of any series previously authenticated and delivered hereunder which the Company
or such Guarantor may have acquired in any manner whatsoever, and all Securities
of any series so delivered shall be promptly cancelled by the Trustee. No
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Securities of any series shall be authenticated in lieu of or in exchange for
any Securities of that series canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Securities of any series
held by the Trustee shall be destroyed and certification of their destruction
delivered to the Company unless by a Company Order the Company shall direct that
the canceled Securities of that series be returned to it. The Trustee shall
provide the Company a list of all Securities of the series that have been
canceled from time to time as requested by the Company.
Section 312. Computation of Interest.
-----------------------
Except as otherwise provided pursuant to Section 301, interest on the
Securities of all series shall be computed on the basis of a 360-day year of
twelve 30-day months.
Section 313. CUSIP Numbers.
-------------
The Company in issuing the Securities of any series may use "CUSIP" numbers
(if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities of that series or as contained in any notice
of a redemption and that reliance may be placed only on the other identification
numbers printed on the Securities of that series, and any such redemption shall
not be affected by any defect in or omission of such numbers.
ARTICLE FOUR
DEFEASANCE AND COVENANT DEFEASANCE
Unless otherwise provided pursuant to Section 301, Securities of any series
shall be subject to the following provisions:
Section 401. Company's Option to Effect Defeasance or Covenant
-------------------------------------------------
Defeasance.
----------
Unless otherwise provided pursuant to Section 301, the Company may, at its
option by Board Resolution, at any time, with respect to the Securities of any
series, elect to have either Section 402 or Section 403 be applied to all of the
Outstanding Securities of any series (the "Defeased Securities"), upon
compliance with the conditions set forth below in this Article Four.
Section 402. Defeasance and Discharge.
------------------------
Unless otherwise provided pursuant to Section 301, upon the Company's
exercise under Section 401 of the option applicable to this Section 402, the
Company, each of the Guarantors, if any, and any other obligor upon the
Securities of any series, if any, shall be deemed to have been
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discharged from its obligations with respect to the Defeased Securities on the
date the conditions set forth below are satisfied (hereinafter, "defeasance").
For this purpose, such defeasance means that the Company, each of the
Guarantors, if any, and any other obligor under the Indenture shall be deemed to
have paid and discharged the entire Indebtedness represented by the Defeased
Securities of that series, which shall thereafter be deemed to be "Outstanding"
only for the purposes of Section 405 and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Company, and, upon written
request, shall execute proper instruments acknowledging the same), except for
the following which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of Defeased Securities to receive, solely
from the trust fund described in Section 404 and as more fully set forth in such
Section, payments in respect of the principal of, premium, if any, and interest
on such Securities when such payments are due, (b) the Company's obligations
with respect to such Defeased Securities under Sections 304, 305, 306, 1002 and
1003, (c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder, including, without limitation, the Trustee's rights under Section
606, (d) this Article Four and (e) if the Security is convertible, the right of
the Holder to convert the Security according to the terms set forth pursuant to
Section 301. Subject to compliance with this Article Four, the Company may
exercise its option under this Section 402 notwithstanding the prior exercise of
its option under Section 403 with respect to the Securities of that series.
Section 403. Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 401 of the option applicable to
this Section 403, the Company and each Guarantor shall be released from its
obligations under any covenant or provision contained or referred to in Article
Ten (except Section 1002 and 1003) or otherwise set forth in this Indenture and
expressly made subject to this Section 403 pursuant to Section 301, and the
provisions of Article Thirteen, if applicable, shall not apply, with respect to
the Defeased Securities on and after the date the conditions set forth below are
satisfied (hereinafter, "covenant defeasance"), and the Defeased Securities
shall thereafter be deemed to be not "Outstanding" for the purposes of any
direction, waiver, consent or declaration or Act of Holders (and the
consequences of any thereof) in connection with such covenants and the
provisions of Article Thirteen, if applicable, but shall continue to be deemed
"Outstanding" for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to the Defeased Securities, the Company and
each Guarantor 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 Article,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such Section or Article or by reason of any reference in any such Section or
Article to any other provision herein or in any other document and such omission
to comply shall not constitute a Default or an Event of Default under Section
501(c), (d) or (g), but, except as specified above, the remainder of this
Indenture and such Defeased Securities shall be unaffected thereby.
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Section 404. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
Unless otherwise provided pursuant to Section 301, the following shall be
the conditions to application of either Section 402 or Section 403 to the
Defeased Securities:
(1) The Company shall irrevocably have deposited or caused to be deposited
with the Trustee (or another trustee satisfying the requirements of Section 608
who shall agree to comply with the provisions of this Article Four applicable to
it) as trust funds in trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the benefit of
the Holders of such Securities, (a) United States dollars in an amount, or (b)
U.S. Government Obligations 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, money in an amount, or
(c) a combination thereof, sufficient, in the opinion of a nationally recognized
firm of independent public accountants or a nationally recognized investment
banking firm 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 the principal of, premium, if
any, and interest on the Defeased Securities on the Stated Maturity of such
principal or installment of principal or interest (or on the "Defeasance
Redemption Date" as defined pursuant to Section 301), if when exercising under
Section 401 either its option applicable to Section 402 or its option applicable
to Section 403, the Company shall have delivered to the Trustee an irrevocable
notice to redeem all of the Outstanding Securities of the applicable series on
the Defeasance Redemption Date); provided that the Trustee shall have been
irrevocably instructed to apply such United States dollars or the proceeds of
such U.S. Government Obligations to said payments with respect to the Securities
of that series. For this purpose, "U.S. Government Obligations" means securities
that are (i) direct obligations of the United States of America for the timely
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 the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, which, in either case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depository receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act), as custodian with respect
to any such U.S. Government Obligation or a specific payment of principal of or
interest on any such U.S. Government Obligation held by such custodian for the
account of the holder of such 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 U.S. Government Obligation or the specific
payment of principal of or interest on the U.S. Government Obligation evidenced
by such depository receipt.
(2) In the case of an election under Section 402, the Company shall have
delivered to the Trustee an Opinion of Independent Counsel in the United States
stating that (A) the Company has received from, or there has been published by,
the Internal Revenue Service a
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<PAGE>
ruling or (B) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Independent Counsel in the United States shall confirm
that, the holders of the Outstanding Securities 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.
(3) In the case of an election under Section 403, the Company shall have
delivered to the Trustee an Opinion of Independent Counsel in the United States
to the effect that the holders of the Outstanding Securities 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.
(4) No Default or Event of Default shall have occurred and be continuing
on the date of such deposit or insofar as subsections 501(h) and (i) are
concerned, at any time during the period ending on the 91st day after the date
of deposit.
(5) Such defeasance or covenant defeasance shall not cause the Trustee for
the Securities of that series to have a conflicting interest with respect to any
securities of the Company or any Guarantor.
(6) Such defeasance or covenant defeasance shall not result in a breach or
violation of, or constitute a Default under, this Indenture or any other
material agreement or instrument to which the Company or any Guarantor is a
party or by which it is bound.
(7) The Company shall have delivered to the Trustee an Opinion of
Independent Counsel to the effect that (A) the trust funds will not be subject
to any rights of holders of senior Indebtedness, including, without limitation,
those arising under this Indenture and (B) 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.
(8) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the holders of the Securities of that series or any Guarantee over
the other creditors of the Company or any Guarantor with the intent of
defeating, hindering, delaying or defrauding creditors of the Company, any
Guarantor or others.
(9) No event or condition shall exist that would prevent the Company from
making payments of the principal of, premium, if any, and interest on the
Securities of that series on the date of such deposit or at any time ending on
the 91st day after the date of such deposit.
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(10) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Independent Counsel, each stating that all
conditions precedent provided for relating to either the defeasance under
Section 402 or the covenant defeasance under Section 403 (as the case may be)
have been complied with as contemplated by this Section 404.
Opinions of Counsel or Opinions of Independent Counsel required to be
delivered under this Section may have qualifications customary for opinions of
the type required and counsel delivering such opinions may rely on certificates
of the Company or government or other officials customary for opinions of the
type required, including certificates certifying as to matters of fact,
including that various financial covenants have been complied with.
Section 405. Deposited Money and U.S. Government Obligations to Be Held
----------------------------------------------------------
in Trust; Other Miscellaneous Provisions.
----------------------------------------
Subject to the provisions of the last paragraph of Section 1003, all United
States dollars and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee or other qualifying trustee as permitted under
Section 404 (collectively, for purposes of this Section 405, the "Trustee")
pursuant to Section 404 in respect of the Defeased Securities shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Securities of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 404 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 the Defeased Securities.
Anything in this Article Four to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
United States dollars or U.S. Government Obligations held by it as provided in
Section 404 which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect defeasance or covenant defeasance.
Section 406. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any United States dollars
or U.S. Government Obligations in accordance with Section 402 or 403, as the
case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Company's and any Guarantor's obligations under this
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Indenture and the Securities of that series and the provisions of Article
Thirteen hereof shall be revived and reinstated as though no deposit had
occurred pursuant to Section 402 or 403, as the case may be, until such time as
the Trustee or Paying Agent is permitted to apply all such United States dollars
or U.S. Government Obligations in accordance with Section 402 or 403, as the
case may be; provided, however, that if the Company makes any payment to the
Trustee or Paying Agent of principal of, premium, if any, or interest on any
Security following the reinstatement of its obligations, the Trustee or Paying
Agent shall promptly pay any such amount to the Holders of the Securities of
that series and the Company shall be subrogated to the rights of the Holders of
such Securities of that series to receive such payment from the money held by
the Trustee or Paying Agent.
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
-----------------
Unless otherwise provided pursuant to Section 301, "Event of Default",
wherever used herein with respect to the Securities of any series, means any one
of the following events which has occurred and is continuing (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) there shall be a default in the payment of any interest on any
Security of that series when it becomes due and payable, and such default shall
continue for a period of 30 days;
(b) there shall be a default in the payment of the principal of (or
premium, if any, on) any Security of that series at its Maturity (upon
acceleration, optional or mandatory redemption, required repurchase or
otherwise);
(c) (i) there shall be a default in the performance, or breach, of any
covenant or agreement of the Company or any Guarantor under this Indenture
(other than a default in the performance or breach of a covenant or agreement
which is specifically dealt with in clause (a) or (b) or in clause (ii) of this
clause (c)) and such default or breach shall continue for a period of 30 days
after written notice has been given, by certified mail, (1) to the Company by
the Trustee or (2) to the Company and the Trustee by the Holders of at least 25%
in aggregate principal amount of the Outstanding Securities of the series; or
(ii) there shall be a default in the performance or breach of the provisions of
Article Eight;
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(d) one or more defaults shall have occurred under any agreements,
indentures or instruments under which the Company, any Guarantor or any
Restricted Subsidiary then has outstanding Indebtedness in excess of $10,000,000
in the aggregate and, if not already matured at its final maturity in accordance
with its terms, such Indebtedness shall have been accelerated;
(e) any Guarantee shall for any reason cease to be, or be asserted in
writing by any Guarantor or the Company not to be, in full force and effect, and
enforceable in accordance with its terms, except to the extent contemplated by
this Indenture and any such Guarantee;
(f) one or more judgments, orders or decrees for the payment of money in
excess of $10,000,000 either individually or in the aggregate (net of amounts
covered by insurance, bond, surety or similar instrument), shall be entered
against the Company, any Guarantor, or any Restricted Subsidiary or any of their
respective properties and shall not be discharged and either (a) any creditor
shall have commenced an enforcement proceeding upon such judgment, order or
decree or (b) there shall have been a period of 60 consecutive days during which
a stay of enforcement of such judgment or order, by reason of an appeal or
otherwise, shall not be in effect;
(g) any holder or holders of at least $10,000,000 in aggregate principal
amount of Indebtedness of the Company, any Guarantor, or any Restricted
Subsidiary after a default under such Indebtedness shall notify the Trustee of
the intended sale or disposition of any assets of the Company, any Guarantor or
any Restricted Subsidiary that have been pledged to or for the benefit of such
holder or holders to secure such Indebtedness or shall commence proceedings, or
take any action (including by way of set-off), to retain in satisfaction of such
Indebtedness or to collect on, seize, dispose of or apply in satisfaction of
Indebtedness, assets of the Company or any Restricted Subsidiary (including
funds on deposit or held pursuant to lock-box and other similar arrangements);
(h) there shall have been the entry by a court of competent jurisdiction
of (i) a decree or order for relief in respect of the Company, any Guarantor or
any Restricted Subsidiary in an involuntary case or proceeding under any
applicable Bankruptcy Law or (ii) a decree or order adjudging the Company, any
Guarantor or any Restricted Subsidiary bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment or composition of or in respect of the
Company, any Guarantor or any Restricted Subsidiary under any applicable federal
or state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Company, any Guarantor
or any Restricted Subsidiary or of any substantial part of their respective
properties, or ordering the winding up or liquidation of their affairs, and any
such decree or order for relief shall continue to be in effect, or any such
other decree or order shall be unstayed and in effect, for a period of 60
consecutive days; or
(i) (i) the Company, any Guarantor or any Restricted Subsidiary commences
a voluntary case or proceeding under any applicable Bankruptcy Law or any other
case or
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proceeding to be adjudicated bankrupt or insolvent, (ii) the Company, any
Guarantor or any Restricted Subsidiary consents to the entry of a decree or
order for relief in respect of the Company, any Guarantor or such Restricted
Subsidiary in an involuntary case or proceeding under any applicable Bankruptcy
Law or to the commencement of any bankruptcy or insolvency case or proceeding
against it, (iii) the Company, any Guarantor or any Restricted Subsidiary files
a petition or answer or consent seeking reorganization or relief under any
applicable federal or state law, or (iv) the Company, any Guarantor or any
Restricted Subsidiary (1) consents to the filing of such petition or the
appointment of, or taking possession by, a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company, any
Guarantor or such Restricted Subsidiary or of any substantial part of its
respective properties, (2) makes an assignment for the benefit of creditors or
(3) admits in writing its inability to pay its debts generally as they become
due.
Unless otherwise provided pursuant to Section 301, the Company shall
deliver to the Trustee within five business days after the occurrence thereof,
written notice, in the form of an Officers' Certificate, of any Default, its
status and what action the Company is taking or proposes to take with respect
thereto. Unless the Corporate Trust Office of the Trustee has received written
notice of an Event of Default of the nature described in this Section, the
Trustee shall not be deemed to have knowledge of such Event of Default for the
purposes of Article Five or for any other purpose.
Section 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
Unless otherwise provided pursuant to Section 301, if an Event of Default
(other than an Event of Default specified in Sections 501(h) and (i)) shall
occur and be continuing, the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Securities Outstanding of the applicable
series may, and the Trustee at the request of the Holders of not less than 25%
in aggregate principal amount of the Securities of the applicable series
Outstanding shall, declare all unpaid principal of, premium, if any, and accrued
interest on, all the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by the Holders of the Securities of that series). Thereupon the Trustee may, at
its discretion, proceed to protect and enforce the rights of the Holders of the
Securities of that series by appropriate judicial proceeding. If an Event of
Default specified in clause (h) or (i) of Section 501 occurs and is continuing,
then all the Securities shall ipso facto become and be immediately due and
payable, in an amount equal to the principal amount of the Securities of that
series, together with accrued and unpaid interest, if any, to the date the
Securities become due and payable, without any declaration or other act on the
part of the Trustee or any Holder.
Unless otherwise provided pursuant to Section 301, at any time after such
declaration of acceleration has been made but before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in aggregate principal amount of the
Securities Outstanding of the applicable series, by written
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notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum sufficient to
pay (i) all sums paid or advanced by the Trustee under this Indenture and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, (ii) all overdue interest on all Securities of any
series, (iii) the principal of and premium, if any, on any Securities of any
series which have become due otherwise than by such declaration of acceleration
and interest thereon at a rate borne by the Securities, and (iv) to the extent
that payment of such interest is lawful, interest upon overdue interest at the
rate borne by the Securities; and
(b) all Events of Default, other than the non-payment of principal of the
Securities of any series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent Default or impair any right
consequent thereon provided in Section 513. Provisions relating to acceleration
of the Maturity of a portion of the principal amount of an Original Issue
Discount Security upon the occurrence of an Event of Default and the
continuation thereof shall be provided pursuant to Section 301.
Section 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
-------
The Company, as to Securities of any series, and any Guarantor, as to
Securities of any series guaranteed by such Guarantor, covenant that if
(a) default is made in the payment of any interest on any such Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(b) default is made in the payment of the principal of or premium, if any,
on any such Security at the Stated Maturity thereof, the Company and, if
applicable, any such Guarantor will, upon demand of the Trustee, pay to it, for
the benefit of the Holders of such Securities, subject to Article Thirteen, if
applicable, the whole amount then due and payable on such Securities for
principal and premium, if any, and interest, with interest upon the overdue
principal and premium, if any, and, to the extent that payment of such interest
shall be legally enforceable, upon overdue installments of interest, at the rate
borne by the Securities of that series; and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company or, if applicable, any Guarantor 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
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judicial proceeding for the collection of the sums so due and unpaid and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or, if applicable, any Guarantor or any other obligor upon
the Securities of any series and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of the Company or, if
applicable, any Guarantor or any other obligor upon the Securities of that
series, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders under this Indenture or the Guarantees by such appropriate private or
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce such rights, including, seeking recourse against any Guarantor pursuant
to the terms of any Guarantee, 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 therein, or to enforce any other proper remedy, including,
without limitation, seeking recourse against any Guarantor pursuant to the terms
of a Guarantee, or to enforce any other proper remedy, subject however to
Section 512.
Section 504. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor, including each
Guarantor, upon the Securities of any series or the property of the Company or
of such other obligor or their creditors, the Trustee (irrespective of whether
the principal of the Securities of that series shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal, and
premium, if any, and interest owing and unpaid in respect of the Securities of
that series and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(b) subject to Article Thirteen, if applicable, to collect and receive any
moneys, securities or other property payable or deliverable upon any conversion
or exchange of Securities of that series or upon any such claims and to
distribute the same; and any custodian in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay the Trustee any amount due it for the reasonable compensation,
expenses,
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disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
of any series or the rights of any Holder thereof, or to authorize the Trustee
to vote in respect of the claim of any Holder in any such proceeding.
Section 505. Trustee May Enforce Claims without Possession of Securities.
-----------------------------------------------------------
All rights of action and claims under this Indenture or the Securities of
any series may be prosecuted and enforced by the Trustee without the possession
of any of the Securities of that series or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name and 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 of that
series 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 or otherwise on
behalf of the Holders or the Trustee pursuant to this Article or through any
proceeding or any arrangement or restructuring in anticipation or in lieu of any
proceeding contemplated by this Article shall be applied, subject to applicable
law, 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, premium, if any,
or interest, upon presentation of the Securities of any series and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 606;
SECOND: Subject to Article Thirteen, if applicable, to the payment of the
amounts then due and unpaid upon the Securities of that series for principal,
premium, if any, and interest, in respect of which or for the benefit of which
such money has been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Securities for principal,
premium, if any, and interest; and
THIRD: Subject to Article Thirteen, if applicable, the balance, if any, to
the Person or Persons entitled thereto, including the Company, provided that all
sums due and owing to the Holders and the Trustee have been paid in full as
required by this Indenture.
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Section 507. Limitation on Suits.
-------------------
No Holder of any Securities of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless s
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as trustee hereunder;
(c) such Holder or Holders have offered to the Trustee an indemnity
satisfactory to the Trustee against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in principal
amount of the Outstanding Securities of that series; it being understood and
intended that no one or more Holders shall have any right in any manner whatever
by virtue of, or by availing of, any provision of this Indenture or any
Guarantee to affect, disturb or prejudice the rights of any other Holders, or to
obtain or to seek to obtain priority or preference over any other Holders or to
enforce any right under this Indenture, except in the manner provided in this
Indenture or any Guarantee and for the equal and ratable benefit of all the
Holders of Securities of that series.
Section 508. Unconditional Right of Holders to Receive Principal, Premium
------------------------------------------------------------
and Interest.
------------
Notwithstanding any other provision in this Indenture, but subject to
Article Thirteen, if applicable, the Holder of any Security of any series shall
have the right on the terms stated herein, which is absolute and unconditional,
to receive payment of the principal of, premium, if any, and (subject to Section
309) interest on such Security on the respective Stated Maturities expressed in
such Security (or, in the case of redemption or repurchase, on the Redemption
Date or repurchase date) and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder, subject to Article Thirteen, if applicable.
Section 509. Restoration of Rights and Remedies.
----------------------------------
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If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture or the Guarantees and such proceeding has
been discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Holder, then and in every such case the Company, each
of the Guarantors, the Trustee and the Holders 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.
------------------------------
No right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Security of any
series 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, as
the case may be.
Section 512. Control by Holders.
------------------
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities of a series (or if more than one series is affected
thereby, of all series so affected, voting as a single class) 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 of that series, provided that
(a) such direction shall not be in conflict with any rule of law or with
this Indenture or any Guarantee or expose the Trustee to personal liability; and
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
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Section 513. Waiver of Past Defaults.
-----------------------
Unless otherwise provided pursuant to Section 301, the Holders of not less
than a majority in aggregate principal amount of the Outstanding Securities of
any series may on behalf of the Holders of all the Securities of that series
waive any past Default hereunder and its consequences, except a Default
(a) in the payment of the principal of, premium, if any, or interest on
any Security of any series; or
(b) in respect of a covenant or a provision hereof which under Article
Nine cannot be modified or amended without the consent of the holder of each
Outstanding Security of that series.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security of any
series by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee of that series
for any action taken, suffered or omitted by it as Trustee of that series, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee of that series, to any suit instituted by any
Holder, or group of Holders, of that series holding in the aggregate more than
10% in principal amount of the Outstanding Securities of that series, or to any
suit instituted by any Holder for the enforcement of the payment of the
principal of, premium, if any, or interest on any Security of any series on or
after the respective Stated Maturities expressed in such Security (or, in the
case of redemption, on or after the Redemption Date).
Section 515. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
Each of the Company and any Guarantor covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury or other law wherever enacted, now or at any time
hereafter in force, which would prohibit or forgive the Company or any Guarantor
from paying all or any portion of the principal of, premium, if any, or interest
on
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the Securities of any series or which may affect the covenants or the
performance of this Indenture; and each of the Company and any Guarantor (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee of that series,
but will suffer and permit the execution of every such power as though no such
law had been enacted.
ARTICLE SIX
THE TRUSTEE
Section 601. Notice of Defaults.
------------------
Within 30 days after the occurrence of any Default, the Trustee shall
transmit by mail to all Holders, as their names and addresses appear in the
Security Register, notice of such Default hereunder known to the Trustee, unless
such Default shall have been cured or waived; provided, however, that, except in
the case of a Default in the payment of the principal of, premium, if any, or
interest on any Security of any series, the Trustee shall be protected in
withholding such notice if and so long as a trust committee of Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interest of the Holders.
Section 602. Certain Rights of Trustee.
-------------------------
Subject to the provisions of Trust Indenture Act Sections 315(a) through
315(d):
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of Indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Trustees may be sufficiently evidenced by a Board Resolution;
(c) the Trustee may consult with counsel and any written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon in accordance with such advice or Opinion
of Counsel;
(d) 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 pursuant to
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this Indenture, unless such Holders shall have offered to the Trustee security
or indemnity satisfactory to the Trustee against the costs, expenses and
liabilities which might be incurred therein or thereby in compliance with such
request or direction;
(e) the Trustee shall not be liable for any action taken or omitted by it
in good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture other than any liabilities
arising out of the negligence of the Trustee;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, approval,
appraisal, bond, debenture, note, coupon, security or other paper or document;
provided, that the Trustee in its discretion may make such further inquiry or
investigation into such facts or matters as it may deem fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(h) no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers;
(i) the Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company, except as
otherwise provided herein;
(j) money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law, except as otherwise provided herein;
and
(k) if a Default or an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in its exercise thereof as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
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Section 603. Trustee Not Responsible for Recitals, Dispositions of
-----------------------------------------------------
Securities or Application of Proceeds Thereof.
---------------------------------------------
The recitals contained herein and in the Securities of each series, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities of any series, except that the Trustee represents
that it is duly authorized to execute and deliver this Indenture, authenticate
the Securities of any securities and perform its obligations hereunder and that
the statements made by it in any Statement of Eligibility and Qualification on
Form T-1 supplied to the Company are true and accurate subject to the
qualifications set forth therein. The Trustee shall not be accountable for the
use or application by the Company of Securities of any series or the proceeds
thereof.
Section 604. Trustee and Agents May Hold Securities; Collections; etc.
--------------------------------------------------------
The Trustee, any Paying Agent, Security Registrar or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities, with the same rights it would have if it were not the
Trustee, Paying Agent, Security Registrar or such other agent and, subject to
Trust Indenture Act Sections 310 and 311, may otherwise deal with the Company
and receive, collect, hold and retain collections from the Company with the same
rights it would have if it were not the Trustee, Paying Agent, Security
Registrar or such other agent.
Section 605. Money Held in Trust.
-------------------
All moneys received by the Trustee shall, until used or applied as herein
provided, be held in trust for the purposes for which they were received, but
need not be segregated from other funds except to the extent required by
mandatory provisions of law. Except for funds or securities deposited with the
Trustee pursuant to Article Four, the Trustee may invest all moneys received by
the Trustee, until used or applied as herein provided, in Temporary Cash
Investments in accordance with the written directions of the Company. The
Trustee shall not be liable for any losses incurred in connection with any
investments made in accordance with this Section 605, unless the Trustee acted
with gross negligence or in bad faith. With respect to any losses on investments
made under this Section 605, the Company is liable for the full extent of any
such loss.
Section 606. Compensation and Indemnification of Trustee and Its Prior
---------------------------------------------------------
Claim.
-----
The Company covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, such compensation for all services
rendered by it hereunder (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an
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express trust) set forth in a letter agreement executed by the Company and the
Trustee, as such agreement may be amended or supplemented, and the Company
covenants and agrees to pay or reimburse the Trustee and each predecessor
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by or on behalf of it in accordance with any of the provisions
of this Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all agents and other persons not regularly
in its employ) except any such expense, disbursement or advance as may arise
from its negligence or bad faith. The Company also covenants to indemnify the
Trustee and each predecessor Trustee for, and to hold it harmless against, any
loss, liability, tax, assessment or other governmental charge (other than taxes
applicable to the Trustee's compensation hereunder) or expense incurred without
negligence or bad faith on such Trustee's part, arising out of or in connection
with the acceptance or administration of this Indenture or the trusts hereunder
and such Trustee's duties hereunder, including enforcement of this Indenture and
also including any liability which the Trustee may incur as a result of failure
to withhold, pay or report any tax, assessment or other governmental charge, and
the costs and expenses of defending itself against or investigating any claim of
liability (whether asserted by any Holder, the Company or any other Person) in
connection with the exercise or performance of any of its powers or duties under
this Indenture. The obligations of the Company under this Section to compensate
and indemnify the Trustee and each predecessor Trustee and to pay or reimburse
the Trustee and each predecessor Trustee for expenses, disbursements and
advances shall constitute an additional obligation hereunder and shall survive
the satisfaction and discharge of this Indenture.
All payments and reimbursements pursuant to this Section 606 shall be made
with interest at the rate borne by the Securities.
As security for the performance of the obligations of the Company under
this Section 606, the Trustee shall have a Lien prior to the Securities of any
series upon all property and funds held or collected by the Trustee, except
funds held in trust for the payment of principal of (and premium, if any) or
interest on particular Securities. The Trustee's right to receive payment of any
amounts due under this Section 606 shall not be subordinate to any other
liability or indebtedness of the Company (even though the Securities of any
series may be so subordinate), and the Securities of any series shall be
subordinate to the Trustee's right to receive such payment.
Section 607. Conflicting Interests.
---------------------
The Trustee shall comply with the provisions of Section 310(b) of the Trust
Indenture Act.
Section 608. Corporate Trustee Required; Eligibility.
---------------------------------------
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There shall at all times be a Trustee hereunder which shall be eligible to
act as trustee under Trust Indenture Act Section 310(a)(1) and which shall have
a combined capital and surplus of at least $250,000,000, to the extent there is
an institution eligible and willing to serve. The Trustee shall be a participant
in the Depository Trust Company and FAST distribution systems. If such
corporation publishes reports of condition at least annually, pursuant to law or
to 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 corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect hereinafter specified in this
Article. The Corporate Trust Office shall initially be located at
_________________________.
Section 609. Resignation and Removal; Appointment of Successor Trustee.
---------------------------------------------------------
(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 under Section 610.
(b) The Trustee, or any trustee or trustees hereafter appointed, may at
any time resign by giving written notice thereof to the Company. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
trustee by written instrument executed by authority of the Board of Trustees of
the Company, a copy of which shall be delivered to the resigning Trustee and a
copy to the successor trustee. If an instrument of acceptance by a successor
trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may, or any Holder
who has been a bona fide Holder of a Security of the applicable series for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper, appoint a successor trustee.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by an Act of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of that series, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of Trust
Indenture Act Section 310(b) after written request therefor by the Company
or by any Holder who has been a bona fide Holder of a Security for at least
six months, or
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(2) the Trustee shall cease to be eligible under Section 608 and
shall fail to resign after written request therefor by the Company or by
any Holder who has been a bona fide Holder of a Security for at least six
months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any case, (i) the
Company by a Board Resolution may remove the Trustee, or (ii) subject to
Section 514, the Holder of any Security who has been a bona fide Holder of
a Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(e) If the Trustee shall be removed or become incapable of acting, or if a
vacancy shall occur in the office of Trustee for any cause, with respect to the
Securities of one or more series, the Company, by a Board Resolution, shall
promptly appoint a successor trustee with respect to the Securities of that or
those series (it being understood that any such successor Trustee may be
appointed with respect to the Securities of one or more or all 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 removal or incapability,
or the occurrence of such vacancy, a successor trustee with respect to the
Securities of any series shall be appointed by Act of the Holders of a majority
in principal amount of the Outstanding Securities of that series delivered to
the Company and the retiring Trustee, the successor trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor Trustee
with respect to the Securities of that series and to that extent supersede the
successor trustee appointed by the Company. If no successor Trustee with respect
to the Securities of that series shall have been so appointed by the Company or
the Holders of the Securities of that series and accepted appointment in the
manner hereinafter provided, the Holder of any Security of such series who has
been a bona fide Holder for at least six months may, subject to Section 514, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of that series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to the Holders of
Securities of the affected series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor trustee
and the address of its Corporate Trust Office or agent hereunder.
Section 610. Acceptance of Appointment by Successor.
--------------------------------------
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In case of the appointment hereunder of a successor Trustee with respect to
all Securities, such successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee as if originally named as
Trustee hereunder; but, nevertheless, on the written request of the Company or
the successor trustee, upon payment of its charges then unpaid, such retiring
Trustee shall, pay over to the successor trustee all moneys at the time held by
it hereunder and shall execute and deliver an instrument transferring to such
successor trustee all such rights, powers, duties and obligations. Upon request
of any such successor trustee, the Company shall execute any and all instruments
for more fully and certainly vesting in and confirming to such successor trustee
all such rights and powers. Any Trustee ceasing to act shall, nevertheless,
retain a prior claim upon all property or funds held or collected by such
Trustee or such successor trustee to secure any amounts then due such Trustee
pursuant to the provisions of Section 606.
In case of the appointment hereunder of a successor Trustee with respect to
the Securities of one or more (but not all) series, the Company, the Guarantors,
the retiring Trustee and each successor Trustee with respect to the Securities
of such one or more series shall execute and deliver an indenture supplemental
hereto wherein such successor Trustee shall accept such appointment and which
(1) shall contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, such successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company, any Guarantor or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.
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Upon request of any such successor Trustee, the Company and the Guarantors
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 the first or second preceding paragraph, as the case may be.
No successor Trustee with respect to the Securities of any series shall
accept appointment as provided in this Section 610 unless at the time of such
acceptance such successor trustee shall be eligible to act as trustee under the
provisions of Trust Indenture Act Section 310(a) and this Article Sixth and
shall have a combined capital and surplus of at least $250,000,000 and have a
Corporate Trust Office or an agent selected in accordance with Section 608.
Upon acceptance of appointment by any successor Trustee with respect to the
Securities of any particular series as provided in this Section 610, the Company
shall give notice thereof to the Holders of the Securities of any series
affected, by mailing such notice to such Holders at their addresses as they
shall appear on the Security Register. If the acceptance of appointment is
substantially contemporaneous with the resignation, then the notice called for
by the preceding sentence may be combined with the notice called for by Section
609. If the Company fails to give such notice within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be given at the expense of the Company.
Section 611. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be eligible under Trust Indenture Act Section
310(a) and this Article Sixth and shall have a combined capital and surplus of
at least $250,000,000 and have a Corporate Trust Office or an agent selected in
accordance with Section 608 without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities of any series shall have
been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and deliver
such Securities so authenticated; and, in case at that time any of the
Securities of that series shall not have been authenticated, any successor to
the Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor trustee; and in all such
cases such certificate shall have the full force which it is anywhere in the
Securities of any series or in this Indenture provided that the certificate of
the Trustee shall have; provided that the right to adopt the certificate of
authentication of any predecessor Trustee or to authenticate Securities of that
series in the name of any predecessor Trustee shall apply only to its successor
or successors by merger, conversion or consolidation.
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Section 612. Preferential Collection of Claims Against Company.
-------------------------------------------------
If and when the Trustee shall be or become a creditor of the Company (or
other obligor under the Securities of any series), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor). A Trustee who has resigned or
been removed shall be subject to the Trust Indenture Act Section 311(a) to the
extent indicated therein.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
---------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after each Regular Record Date, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of such Regular Record Date; and
(b) at such other times as the Trustee may request in writing, within 30
days after receipt by the Company of any such request, a list of similar form
and content as of a date not more than 15 days prior to the time such list is
furnished; provided, however, that if and so long as the Trustee shall be the
Security Registrar, no such list need be furnished.
Section 702. Disclosure of Names and Addresses of Holders.
--------------------------------------------
Holders may communicate pursuant to Trust Indenture Act Section 312(b) with
other Holders with respect to their rights under this Indenture or the
Securities, and the Trustee shall comply with Trust Indenture Act Section
312(b). The Company, the Trustee, the Security Registrar and any other Person
shall have the protection of Trust Indenture Act Section 312(c). Every Holder of
Securities of any series, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any agent
of either of them shall be held accountable by reason of the disclosure of any
information as to the names and addresses of the Holders in accordance with
Trust Indenture Act Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Trust Indenture
Act Section 312.
Section 703. Reports by Trustee.
------------------
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Within 60 days after May 15 of each year commencing with the first May 15
after the first issuance of Securities of each series, the Trustee shall
transmit by mail to all Holders, as their names and addresses appear in the
Security Register, as provided in Trust Indenture Act Section 313(c), a brief
report dated as of such May 15 in accordance with and to the extent required by
Trust Indenture Act Section 313(a).
Section 704. Reports by Company and Guarantors.
---------------------------------
The Company and any Guarantor shall:
(a) file with the Trustee, within 15 days after the Company or any
Guarantor, 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 from
time to time by rules and regulations prescribe) which the Company or any
Guarantor may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company or any Guarantor, as the
case may be, is not required to file information, documents or reports pursuant
to either of said Sections, then it shall file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Exchange Act in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules and
regulations;
(b) file with the Trustee and the Commission, in accordance with the rules
and regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company or
any Guarantor, as the case may be, with the conditions and covenants of this
Indenture as may be required from time to time by such rules and regulations;
and
(c) transmit or cause to be transmitted by mail to all Holders, as their
names and addresses appear in the Security Register, within 30 days after the
filing thereof with the Trustee, in the manner and to the extent provided in
Trust Indenture Act Section 313(c), such summaries of any information, documents
and reports required to by filed by the Company or any Guarantor, as the case
may be, pursuant to Subsections (a) and (b) of this Section as may be required
by rules and regulations prescribed from time to time by the Commission.
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ARTICLE EIGHT
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
Section 801. Company or Any Guarantor May Consolidate, etc., Only on
-------------------------------------------------------
Certain Terms.
-------------
Unless otherwise provided pursuant to Section 301:
(a) The Company shall not, in a single transaction or through a series of
related transactions, consolidate with or merge with or into any other Person or
sell, assign, convey, transfer or lease or otherwise dispose of all or
substantially all of its properties and assets as an entirety to any Person or
group of affiliated Persons, or permit any of its Subsidiaries to enter into any
such transaction or transactions if such transaction or transactions, in the
aggregate, would result in a sale, assignment, conveyance, transfer, lease or
disposal of all or substantially all of the properties and assets of the Company
and its Subsidiaries on a consolidated basis to any other Person or group of
affiliated Persons, unless at the time and after giving effect thereto:
(i) either (1) the Company shall be the continuing entity, or
(2) the Person (if other than the Company) formed by such consolidation or
into which the Company is merged or the Person which acquires by sale,
assignment, conveyance, transfer, lease or disposition of all or
substantially all of the properties and assets of the Company and its
Subsidiaries on a consolidated basis (the "Surviving Entity") shall be a
Person (other than an individual) duly organized and validly existing under
the laws of the United States of America, any state thereof or the District
of Columbia and such Person assumes, by a supplemental indenture in a form
reasonably satisfactory to the Trustee, all the obligations of the Company
under the Securities and this Indenture, and this Indenture shall remain in
full force and effect;
(ii) immediately before and immediately after giving effect to
such transaction, no Default or Event of Default shall have occurred and be
continuing;
(iii) immediately after giving effect to such transaction on a
pro forma basis, the Consolidated Net Worth of the Company (or the
Surviving Entity if the Company is not the continuing obligor under this
Indenture) is equal to or greater than the Consolidated Net Worth of the
Company immediately prior to such transaction;
(iv) immediately before and immediately after giving effect to
such transaction on a pro forma basis (on the assumption that the
transaction occurred on the first day of the four-quarter period
immediately prior to the consummation of such
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transaction with the appropriate adjustments with respect to the
transaction being included in such pro forma calculation), the Company (or
the Surviving Entity if the Company is not the continuing obligor under
this Indenture) could incur $1.00 of additional Indebtedness under any
applicable provisions of the Indenture limiting incurrence of indebtedness
and established pursuant to Section 301;
(v) each Guarantor, if any, unless it is the other party to
the transactions described above, shall have by supplemental indenture
confirmed that its Guarantee shall apply to such Person's obligations under
this Indenture and the Securities;
(vi) if any of the property or assets of the Company or any of
its Subsidiaries would thereupon become subject to any Lien, the provisions
of the Indenture limiting liens (established pursuant to Section 301) are
complied with; and
(vii) the Company or the Surviving Entity shall have delivered,
or caused to be delivered, to the Trustee, in form and substance reasonably
satisfactory to the Trustee, an Officers' Certificate and an Opinion of
Counsel, each to the effect that such consolidation, merger, transfer,
sale, assignment, conveyance, lease or other transaction and the
supplemental indenture in respect thereto comply with this Indenture and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
(b) If any Securities of any series are guaranteed pursuant to Article
Thirteen, each Guarantor, if any, shall not, and the Company shall not permit a
Guarantor to, in a single transaction or through a series of related
transactions merge or consolidate with or into any other Person (other than the
Company or any other Guarantor) or other entity, or sell, assign, convey,
transfer, lease or otherwise dispose of all or substantially all of its
properties and assets on a consolidated basis to any entity (other than the
Company or any other Guarantor) unless at the time and after giving effect
thereto:
(i) either (1) such Guarantor shall be the continuing Person
(other than an individual) or (2) the entity (if other than such Guarantor)
formed by such consolidation or into which such Guarantor is merged or the
entity which acquires by sale, assignment, conveyance, transfer, lease or
disposition the properties and assets of such Guarantor shall be a Person
(other than an individual) duly organized and validly existing under the
laws of the United States, any state thereof or the District of Columbia
and shall expressly assume by an indenture supplemental hereto, executed
and delivered to the Trustee, in a form reasonably satisfactory to the
Trustee, all the obligations of such Guarantor under its Guarantees and
this Indenture;
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(ii) immediately before and immediately after giving effect to
such transaction, no Default or Event of Default shall have occurred and be
continuing; and
(iii) such Guarantor shall have delivered to the Trustee, in
form and substance reasonably satisfactory to the Trustee, an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, assignment, conveyance, transfer, lease or
disposition and such supplemental indenture comply with this Indenture, and
thereafter all obligations of the predecessor shall terminate.
Section 802. Successor Substituted.
---------------------
Upon any consolidation or merger, or any sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the properties and
assets of the Company or any Guarantor in accordance with Section 801, the
successor Person formed by such consolidation or into which the Company or such
Guarantor, as the case may be, is merged or the successor Person to which such
sale, assignment, conveyance, transfer, lease or disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company or such Guarantor, as the case may be, under this Indenture, the
Securities of any series and/or such Guarantee, as the case may be, with the
same effect as if such successor had been named as the Company or such
Guarantor, as the case may be, herein, in the Securities of that series and/or
in such Guarantee, as the case may be. When a successor assumes all the
obligations of its predecessor under this Indenture, the Securities of any
series or a Guarantee, as the case may be, the predecessor shall be released
from those obligations; provided that in the case of a transfer by lease, the
predecessor shall not be released from the payment of principal and interest on
the Securities of any series or a Guarantee, as the case may be.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures and Agreements without Consent of
---------------------------------------------------------
Holders.
-------
Unless otherwise provided for in Section 301, without the consent of any
Holders, the Company and the Guarantors, when authorized by a Board Resolution,
and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto or agreements or other instruments with respect
to any Guarantee, in form and substance satisfactory to the Trustee, for any of
the following purposes:
(a) cause the Indenture to be qualified under the Trust Indenture Act
("TIA") or to add provisions expressly required under the TIA;
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(b) evidence the succession of another Person to the Company, any
Guarantor or other obligor upon the Securities and the assumption by any such
successor of the covenants of the Company, any Guarantor or other obligor upon
the Securities under the Indenture and in the Securities of any series;
(c) add to the covenants of the Company, any Guarantor or other obligor
upon the Securities for the benefit of the Holders (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 an additional Event of Default to all or any series of Securities, or
surrender any right or power conferred upon the Company;
(d) to secure the Securities of any series thereof;
(e) to add to or change any provisions to such extent as necessary to
facilitate the issuance or administration of Securities in bearer form or to
facilitate the issuance or administration of Securities in global form;
(f) to change or eliminate any provision affecting only series of
Securities not yet issued;
(g) to establish the form or terms of Securities and Guarantee, if any, of
any series;
(h) to evidence and provide for successor Trustees or to add or change any
provisions of such Indenture to such extent as necessary to permit or facilitate
the appointment of a separate Trustee or Trustees for specific series of
Securities;
(i) to permit payment in respect of Securities in bearer form in the
United States to the extent allowed by law;
(j) to make provision with respect to any conversion or exchange rights of
holders not adverse to the holders of any Securities of any series then
outstanding with such conversion or exchange rights which provision directly
effects any such series, including providing for the conversion or exchange of
Securities into Common Stock or Preferred Stock;
(k) cure any ambiguity, correct or supplement any provision which may be
defective or inconsistent with any other provision, or make any other provisions
with respect to matters or questions arising under the Indenture which shall not
be inconsistent with the provisions of the Indenture; provided, however, that no
such modifications or amendment may adversely affect the interest of holders of
Securities of any series then outstanding in any material respect; or
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(l) to add a Guarantor pursuant to the requirements of Article Thirteen.
Section 902. Supplemental Indentures and Agreements with Consent of
------------------------------------------------------
Holders.
-------
Unless otherwise provided pursuant to Section 301, with the consent of the
Holders of not less than a majority in aggregate principal amount of the
Outstanding Securities of all series affected, by Act of said Holders delivered
to the Company, each Guarantor, and the Trustee, the Company and each Guarantor
(if a party thereto), when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto or agreements or other
instruments with respect to any Guarantee in form and substance satisfactory to
the Trustee 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 under this Indenture, the Securities or any
Guarantee; provided, however, that no such supplemental indenture, agreement or
instrument shall, without the consent of the Holder of each Outstanding Security
of all series affected thereby:
(a) change the Stated Maturity of the principal of, or any installment of
interest on, any Security, or reduce the principal amount thereof or the rate of
interest thereon or any premium payable upon the redemption thereof, or change
the coin or currency in which the principal of any Security or any premium or
the interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment after the Stated Maturity thereof (or, in the
case of redemption, on or after the Redemption Date);
(b) reduce the percentage in principal amount of the Outstanding
Securities of a series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver or compliance with certain provisions of this Indenture or certain
defaults or with respect to any Guarantee;
(c) modify any of the provisions of this Section, Section 513 or Section
1009, except to increase the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such actions or to
provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Security affected thereby;
(d) except as otherwise permitted under Article Eight, consent to the
assignment or transfer by the Company or any Guarantor of any of its rights and
obligations under this Indenture; or
(e) modify the ranking or priority of any Security or the Guarantee in
respect thereof of any Guarantor in any manner adverse to the Holders of the
Securities or any Guarantee.
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Upon the written request of the Company and each Guarantor, accompanied by
a copy of a Board Resolution authorizing the execution of any such supplemental
indenture or Guarantee, and upon the filing with the Trustee of evidence of the
consent of Holders as aforesaid, the Trustee shall, subject to Section 903, join
with the Company and each Guarantor in the execution of such supplemental
indenture or Guarantee.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture or Guarantee
or agreement or instrument relating to any Guarantee, but it shall be sufficient
if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures and Agreements.
---------------------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture, agreement or instrument permitted by this Article or the
modifications thereby of the trusts created by this Indenture, the Trustee shall
be entitled to receive, and (subject to Trust Indenture Act Section 315(a)
through 315(d) and Section 602 hereof) shall be fully protected in relying upon,
an Opinion of Counsel and an Officers' Certificate stating that the execution of
such supplemental indenture, agreement or instrument is authorized or permitted
by this Indenture. The Trustee may, but shall not be obligated to, enter into
any such supplemental indenture, agreement or instrument which affects the
Trustee's own rights, duties or immunities under this Indenture, any Guarantee
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 of each series theretofore or thereafter authenticated and
delivered hereunder 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 each series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of each series so modified as to conform, in the
opinion of the Trustee and the Board of Trustees, to any such supplemental
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indenture may be prepared and executed by the Company and each Guarantor and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities of that series.
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.
------------------------------------------
Subject to the provisions of Article Thirteen, if applicable, the Company
will duly and punctually pay the principal of, premium, if any, and interest on
each series of the Securities in accordance with the terms of the Securities of
each series and this Indenture.
Section 1002. Maintenance of Office or Agency.
-------------------------------
Unless otherwise provided pursuant to Section 301, the Company will
maintain an office or agency where Securities of each series may be presented or
surrendered for payment. The Company also will maintain an office or agency
where Securities of each series may be surrendered for registration of transfer,
redemption or exchange and where notices and demands to or upon the Company in
respect of the Securities of each series and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location and any
change in the location of any such offices or agencies. If at any time the
Company shall fail to maintain any such required offices or agencies or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the office of the agent
of the Trustee described above and the Company hereby appoints such agent as its
agent to receive all such presentations, surrenders, notices and demands.
The Company may from time to time designate one or more other offices or
agencies where the Securities of each series may be presented or surrendered for
any or all such purposes, and may from time to time rescind such designation.
The Company will give prompt written notice to the Trustee of any such
designation or rescission and any change in the location of any such office or
agency.
Procedures with respect to Bearer Securities in connection with the matters
addressed in this Section 1002 shall be set forth pursuant to Section 301.
Unless otherwise provided pursuant to Section 301, the Trustee shall
initially serve as Paying Agent.
Section 1003. Money for Security Payments to Be Held in Trust.
-----------------------------------------------
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If the Company shall at any time act as its own Paying Agent, it will, on
or before each due date of the principal of, premium, if any, or interest on any
of the Securities of any series, segregate and hold in trust for the benefit of
the Holders entitled thereto a sum sufficient to pay the principal, premium, if
any, or interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided, and will promptly notify the
Trustee of its action or failure so to act.
If the Company is not acting as Paying Agent, the Company will, before each
due date of the principal of, premium, if any, or interest on any Securities of
any series, deposit with a Paying Agent or Paying Agents, as the case may be, a
sum in same day funds sufficient to pay the principal, premium, if any, or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of such
action or any failure so to act.
If the Company is not acting as Paying Agent, the Company will cause each
Paying Agent other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of, premium,
if any, or interest on Securities of any series in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company or any Guarantor
(or any other obligor upon the Securities of any series) in the making of any
payment of principal, premium, if any, or interest;
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and disabilities of
such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
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In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor, including each
Guarantor, upon the Securities of any series or the property of the Company or
of such other obligor or their creditors, the Trustee shall serve as the Paying
Agent.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium, if any, or
interest on any Security of any series and remaining unclaimed for two years
after such principal and premium, if any, or interest has become due and payable
shall promptly be paid to the Company on Company Request, or (if then held by
the Company) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in The New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will promptly be repaid to the Company.
Section 1004. Corporate Existence.
-------------------
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence and related rights and franchises (charter and statutory) of the
Company and each Subsidiary; provided, however, that the Company shall not be
required to preserve any such right or franchise or the corporate existence of
any such Subsidiary if the Board of Trustees of the Company shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of the Company and its Subsidiaries as a whole and that the loss thereof would
not reasonably be expected to have a material adverse effect on the ability of
the Company to perform its obligations hereunder; and provided, further,
however, that the foregoing shall not prohibit a sale, transfer or conveyance of
a Subsidiary or any of its assets in compliance with the terms of this
Indenture.
Section 1005. Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge or cause to be paid or discharged, on or
before the date the same shall become due and payable, (a) all taxes,
assessments and governmental charges levied or imposed upon the Company or any
Subsidiary shown to be due on any return of the Company or any Subsidiary or
otherwise assessed or upon the income, profits or property of the Company or any
Subsidiary if failure to pay or discharge the same could reasonably be expected
to have a material adverse effect on the ability of the Company or any
Guarantor, if any, to
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perform its obligations hereunder and (b) all lawful claims for labor, materials
and supplies, which, if unpaid, would by law become a lien upon the property of
the Company or any Subsidiary; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings properly instituted and
diligently conducted and in respect of which appropriate reserves (in the good
faith judgment of management of the Company) are being maintained in accordance
with generally accepted accounting principles consistently applied.
Section 1006. Maintenance of Properties.
-------------------------
The Company will cause all material properties owned by the Company or any
Subsidiary or used or held for use in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order (ordinary wear and tear excepted) and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be consistent with sound business practice and 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 Company from discontinuing the maintenance of any of
such properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business or the business of any Subsidiary and
not reasonably expected to have a material adverse effect on the ability of the
Company to perform its obligations hereunder.
Section 1007. Insurance.
---------
The Company will at all times keep all of its and its Subsidiaries'
properties which are of an insurable nature insured with insurers, believed by
the Company to be responsible, against loss or damage to the extent that
property of similar character is usually so insured by corporations similarly
situated and owning like properties.
Section 1008. Statement by Officers as to Default.
-----------------------------------
(a) The Company will deliver to the Trustee, on or before a date not more
than 60 days after the end of each fiscal quarter and not more than 120 days
after the end of each fiscal year of the Company ending after the date hereof, a
written statement signed by two executive officers of the Company, one of whom
shall be the principal executive officer, principal financial officer or
principal accounting officer of the Company, stating whether or not, after a
review of the activities of the Company during such year or such quarter and of
the Company's performance under this Indenture, to the best knowledge, based on
such review, of the signers thereof, the Company has fulfilled all its
obligations and is in compliance with all
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conditions and covenants under this Indenture throughout such year or quarter,
as the case may be, and, if there has been a Default specifying each Default and
the nature and status thereof.
(b) When any Default or Event of Default has occurred and is continuing, or
if the Trustee or any Holder or the trustee for or the holder of any other
evidence of Indebtedness of the Company or any Subsidiary gives any notice or
takes any other action with respect to a claimed default (other than with
respect to Indebtedness in the principal amount of less than $10,000,000), the
Company shall deliver to the Trustee by registered or certified mail or by
telegram, telex or facsimile transmission followed by hard copy an Officers'
Certificate specifying such Default, Event of Default, notice or other action
within five Business Days of its occurrence.
Section 1009. Waiver of Certain Covenants.
---------------------------
Unless otherwise provided pursuant to Section 301, the Company or any
Guarantor may, with respect to the Securities of any series, omit in any
particular instance to comply with any term, provision or condition set forth in
any covenant provided pursuant to Sections 301 or 901 for the benefit of the
Holders of any series, if, before or after the time for such compliance, the
Holders of not less than a majority in aggregate principal amount of the
Securities of that series at the time Outstanding shall, by Act of such Holders,
waive such compliance in such instance with such covenant, but no such waiver
shall extend to or affect such covenant except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such covenant shall
remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Rights of Redemption.
--------------------
Unless otherwise provided pursuant to Section 301, the Securities of each
series may be redeemed at the election of the Company, in whole or in part, at
any time as specified pursuant to Section 301, subject to the conditions, and at
the Redemption Price, specified in the form of Security of each series
(specified pursuant to Section 301), together with accrued and unpaid interest,
if any, to the Redemption Date.
Section 1102. Applicability of Article.
------------------------
Redemption of Securities of each series at the election of the Company or
otherwise, as permitted or required by any provision of this Indenture, shall be
made in accordance with such provision and this Article.
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Section 1103. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities of any series pursuant
to Section 1101 shall be evidenced by a Company Order and an Officers'
Certificate. In case of any redemption at the election of the Company, the
Company shall, not less than 45 nor more than 60 days prior to the Redemption
Date fixed by the Company (unless a shorter notice period shall be satisfactory
to the Trustee), notify the Trustee in writing of such Redemption Date and of
the principal amount of Securities of that series to be redeemed.
Section 1104. Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
If less than all the Securities of any series are to be redeemed, the
particular Securities of that series or portions thereof to be redeemed shall be
selected not more than 30 days prior to the Redemption Date by the Trustee, from
the Outstanding Securities not previously called for redemption, pro rata, by
lot or such other method as the Trustee shall deem fair and reasonable, and the
amounts to be redeemed may be equal to $1,000 or any integral multiple thereof.
The Trustee shall promptly notify the Company and the Security Registrar in
writing of the Securities of each series selected for redemption and, in the
case of any Securities of that series 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 redemption of Securities of any series (including
interest coupons, if any) shall relate, in the case of any Security of that
series (including interest coupons, if any) redeemed or to be redeemed only in
part, to the portion of the principal amount of such Security of that series
(including interest coupons, if any) which has been or is to be redeemed.
Section 1105. Notice of Redemption.
--------------------
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities of the affected series to be redeemed, at his address
appearing in the Security Register.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities of any series are to be
redeemed, the identification of the particular Securities of that series to be
redeemed;
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(d) in the case of a Security of any series to be redeemed in part, the
principal amount of such Security to be redeemed and that after the Redemption
Date upon surrender of such Security of that series, new Security or Securities
of that series in the aggregate principal amount equal to the unredeemed portion
thereof will be issued;
(e) that Securities of any series called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price;
(f) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security or portion thereof, and that (unless the Company
shall default in payment of the Redemption Price) interest thereon shall cease
to accrue on and after said date;
(g) the place or places where such Securities are to be surrendered for
payment of the Redemption Price; and
(h) the CUSIP number, if any, relating to such Securities.
Notice of redemption of Securities of any series to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
written request, by the Trustee in the name and at the expense of the Company.
The notice if mailed in the manner herein provided shall be conclusively
presumed to have been given, whether or not the Holder receives such notice. In
any case, failure to give such notice to any Holder of any Security of any
series designated for redemption as a whole or in part, or any defect in any
such notice, shall not affect the validity of the proceedings for the redemption
of any other Security of any series.
Section 1106. Deposit of Redemption Price.
---------------------------
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money in same day funds sufficient to pay the Redemption Price of and (except if
the Redemption Date shall be an Interest Payment Date) accrued interest on, all
the Securities or portions thereof which are to be redeemed on that date. When
the Redemption Date falls on an Interest Payment Date, payments of interest due
on such date are to be paid as provided hereunder as if no such redemption were
occurring.
Section 1107. Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the Securities of the
series so to be redeemed shall, on the Redemption Date, become due and payable
at the Redemption Price therein specified and from and after such date (unless
the Company shall default in the payment
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of the Redemption Price and accrued interest) such Securities shall cease to
bear interest. Upon surrender of any such Security for redemption in accordance
with said notice, such Security shall be paid by the Company at the Redemption
Price together with accrued interest to the Redemption Date; provided, however,
that installments of interest 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 on the relevant Regular Record
Dates according to the terms and the provisions of Section 309.
If any Security of any series called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear interest from the Redemption Date at the rate borne by such
Security.
Procedures regarding the treatment of Holders of Bearer Securities with
respect to the matters addressed in this Section 1107 shall be provided pursuant
to Section 301.
Section 1108. Securities Redeemed or Purchased in Part.
----------------------------------------
Any Security of any series which is to be redeemed or purchased only in
part shall be surrendered to the Paying Agent at the office or agency maintained
for such purpose pursuant to Section 1002 (with, if the Company, the Security
Registrar or the Trustee so requires, due endorsement by (or a written
instrument of transfer in form satisfactory to the Company, the Security
Registrar or the Trustee duly executed by), the Holder thereof or such Holder's
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities of that series, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to,
and in exchange for, the unredeemed portion of the principal of the Security of
that series so surrendered that is not redeemed or purchased.
ARTICLE TWELVE
SATISFACTION AND DISCHARGE
Section 1201. Satisfaction and Discharge of Indenture.
---------------------------------------
Unless otherwise provided pursuant to Section 301, this Indenture shall
cease to be of further effect (except as to surviving rights of registration of
transfer or exchange of Securities herein, rights to payment, rights to
conversion, and rights to replacement of stolen, lost or mutilated Securities
expressly provided for) and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(a) either
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(1) all the Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 308 or (ii) all
Securities for whose payment United States dollars have theretofore been
deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as provided
in Section 1003) have been delivered to the Trustee for cancellation; or
(2) all such Securities not theretofore delivered to the Trustee
for cancellation (x) have become due and payable, (y) will become due and
payable at their Stated Maturity within one year, or (z) are to be called
for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name,
and at the expense, of the Company, and the Company or any Guarantor, in
the case of (2)(x),(y) or (z) above, has irrevocably deposited or caused to
be deposited with the Trustee as trust funds in trust for the purpose an
amount in United States dollars sufficient to pay and discharge the entire
Indebtedness on the Securities not theretofore delivered to the Trustee for
cancellation, for the principal of, premium, if any, and accrued interest
at such Stated Maturity or Redemption Date;
(b) the Company or any Guarantor has paid or caused to be paid all other
sums payable hereunder by the Company or any Guarantor; and
(c) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel stating that (i) all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture have been
complied with and (ii) such satisfaction and discharge will not result in a
breach or violation of or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company or any Guarantor is
a party or by which the Company or any Guarantor is bound.
Opinions of Counsel required to be delivered under this Section may have
qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of the Company or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that various
financial covenants have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 606 and, if United
States dollars shall have been deposited with the Trustee pursuant to subclause
(2) of Subsection (a) of this Section, the obligations of the Trustee under
Section 1202 and the last paragraph of Section 1003 shall survive.
Section 1202. Application of Trust Money.
--------------------------
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Subject to the provisions of the last paragraph of Section 1003, all United
States dollars deposited with the Trustee pursuant to Section 1201 shall be held
in trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal of, premium, if
any, and interest on the Securities for whose payment such United States dollars
have been deposited with the Trustee.
ARTICLE THIRTEEN
GUARANTEE
If, pursuant to Section 301, the Securities of any series are to be
guaranteed by any Guarantor, the following provisions, unless otherwise provided
pursuant to Section 301, shall apply. In this Article Thirteen, unless the
context otherwise requires, all references to Securities refers to the series of
Securities guaranteed by the Guarantors and all references to Indenture
Obligations refer to Indenture Obligations in respect of the series of
Securities so guaranteed. If no series of Securities are guaranteed, this
Article Thirteen and all references to Guarantees and Guarantors in this
Indenture shall have no force and effect.
Section 1301. Guarantors' Guarantee.
---------------------
For value received, each of the Guarantors, in accordance with this Article
Thirteen, hereby absolutely, unconditionally and irrevocably guarantees, jointly
and severally, to the Trustee and the Holders, as if the Guarantors were the
principal debtor, the punctual payment and performance when due of all Indenture
Obligations (which for purposes of this Guarantee shall also be deemed to
include all commissions, fees, charges, costs and other expenses (including
reasonable legal fees and disbursements of one counsel in connection with any
one action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances) arising out of or
incurred by the Trustee or the Holders in connection with the enforcement of
this Guarantee).
Section 1302. Continuing Guarantee; No Right of Set-Off; Independent
------------------------------------------------------
Obligation.
----------
(a) This Guarantee shall be a continuing guarantee of the payment and
performance of all Indenture Obligations and shall remain in full force and
effect until the payment in full of all of the Indenture Obligations and shall
apply to and secure any ultimate balance due or remaining unpaid to the Trustee
or the Holders; and this Guarantee shall not be considered as wholly or
partially satisfied by the payment or liquidation at any time or from time to
time of any sum of money for the time being due or remaining unpaid to the
Trustee or the Holders. Each Guarantor, jointly and severally, covenants and
agrees to comply with all obligations, covenants, agreements and provisions
applicable to it in this Indenture including
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those set forth in Article Eight. Without limiting the generality of the
foregoing, each of the Guarantors' liability shall extend to all amounts which
constitute part of the Indenture Obligations and would be owed by the Company
under this Indenture and the Securities but for the fact that they are
unenforceable, reduced, limited, impaired, suspended or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding involving the
Company.
(b) Each Guarantor, jointly and severally, hereby guarantees that the
Indenture Obligations will be paid to the Trustee without set-off or
counterclaim or other reduction whatsoever (whether for taxes, withholding or
otherwise) in lawful currency of the United States of America.
(c) Each Guarantor, jointly and severally, guarantees that the Indenture
Obligations shall be paid strictly in accordance with their terms regardless of
any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the holders of the Securities.
(d) Each Guarantor's liability under this Guarantee to pay or perform or
cause the performance of the Indenture Obligations shall arise forthwith after
demand for payment or performance by the Trustee has been given to the
Guarantors in the manner prescribed in Section 106 hereof.
(e) Except as provided herein, the provisions of this Article Thirteen
cover all agreements between the parties hereto relative to this Guarantee and
none of the parties shall be bound by any representation, warranty or promise
made by any Person relative thereto which is not embodied herein; and it is
specifically acknowledged and agreed that this Guarantee has been delivered by
each Guarantor free of any conditions whatsoever and that no representations,
warranties or promises have been made to any Guarantor affecting its liabilities
hereunder, and that the Trustee shall not be bound by any representations,
warranties or promises now or at any time hereafter made by the Company to any
Guarantor.
Section 1303. Guarantee Absolute.
------------------
The obligations of the Guarantors hereunder are independent of the
obligations of the Company under the Securities and this Indenture and a
separate action or actions may be brought and prosecuted against any Guarantor
whether or not an action or proceeding is brought against the Company and
whether or not the Company is joined in any such action or proceeding. The
liability of the Guarantors hereunder is irrevocable, absolute and unconditional
and (to the extent permitted by law) the liability and obligations of the
Guarantors hereunder shall not be released, discharged, mitigated, waived,
impaired or affected in whole or in part by:
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(a) any defect or lack of validity or enforceability in respect of any
Indebtedness or other obligation of the Company or any other Person under this
Indenture or the Securities, or any agreement or instrument relating to any of
the foregoing;
(b) any grants of time, renewals, extensions, indulgences, releases,
discharges or modifications which the Trustee or the Holders may extend to, or
make with, the Company, any Guarantor or any other Person, or any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Indenture Obligations, or any other amendment or waiver of, or any consent to or
departure from, this Indenture or the Securities, including any increase or
decrease in the Indenture Obligations;
(c) the taking of security from the Company, any Guarantor or any other
Person, and the release, discharge or alteration of, or other dealing with, such
security;
(d) the occurrence of any change in the laws, rules, regulations or
ordinances of any jurisdiction by any present or future action of any
governmental authority or court amending, varying, reducing or otherwise
affecting, or purporting to amend, vary, reduce or otherwise affect, any of the
Indenture Obligations and the obligations of any Guarantor hereunder;
(e) the abstention from taking security from the Company, any Guarantor or
any other Person or from perfecting, continuing to keep perfected or taking
advantage of any security;
(f) any loss, diminution of value or lack of enforceability of any security
received from the Company, any Guarantor or any other Person, and including any
other guarantees received by the Trustee;
(g) any other dealings with the Company, any Guarantor or any other Person,
or with any security;
(h) the Trustee's or the Holders' acceptance of compositions from the
Company or any Guarantor;
(i) the application by the Holders or the Trustee of all monies at any time
and from time to time received from the Company, any Guarantor or any other
Person on account of any indebtedness and liabilities owing by the Company or
any Guarantor to the Trustee or the Holders, in such manner as the Trustee or
the Holders deems best and the changing of such application in whole or in part
and at any time or from time to time, or any manner of application of
collateral, if any, or proceeds thereof, to all or any of the Indenture
Obligations, or the manner of sale of any such collateral;
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(j) the release or discharge of the Company or any Guarantor of the
Securities or of any Person liable directly as surety or otherwise by operation
of law or otherwise for the Securities, other than an express release in writing
given by the Trustee, on behalf of the Holders, of the liability and obligations
of any Guarantor hereunder;
(k) any change in the name, business, capital structure or governing
instrument of the Company or any Guarantor or any refinancing or restructuring
of any of the Indenture Obligations;
(l) the sale of the Company's or any Guarantor's business or any part
thereof;
(m) subject to Section 1314, any merger or consolidation, arrangement or
reorganization of the Company, any Guarantor, any Person resulting from the
merger or consolidation of the Company or any Guarantor with any other Person or
any other successor to such Person or merged or consolidated Person or any other
change in the corporate existence, structure or ownership of the Company or any
Guarantor;
(n) the insolvency, bankruptcy, liquidation, winding-up, dissolution,
receivership or distribution of the assets of the Company or its assets or any
resulting discharge of any obligations of the Company (whether voluntary or
involuntary) or of any Guarantor or the loss of corporate existence;
(o) subject to Section 1314, any arrangement or plan of reorganization
affecting the Company or any Guarantor;
(p) any other circumstance (including any statute of limitations) that
might otherwise constitute a defense available to, or discharge of, the Company
or any Guarantor; or
(q) any modification, compromise, settlement or release by the Trustee, or
by operation of law or otherwise, of the Indenture Obligations or the liability
of the Company or any other obligor under the Securities, in whole or in part,
and any refusal of payment by the Trustee, in whole or in part, from any other
obligor or other guarantor in connection with any of the Indenture Obligations,
whether or not with notice to, or further assent by, or any reservation of
rights against, each of the Guarantors.
Section 1304. Right to Demand Full Performance.
--------------------------------
In the event of any demand for payment or performance by the Trustee from
any Guarantor hereunder, the Trustee or the Holders shall have the right to
demand its full claim and to receive all dividends or other payments in respect
thereof until the Indenture Obligations have been paid in full, and the
Guarantors shall continue to be jointly and severally liable hereunder for any
balance which may be owing to the Trustee or the Holders by the Company under
this
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Indenture and the Securities. The retention by the Trustee or the Holders of any
security, prior to the realization by the Trustee or the Holders of its rights
to such security upon foreclosure thereon, shall not, as between the Trustee and
any Guarantor, be considered as a purchase of such security, or as payment,
satisfaction or reduction of the Indenture Obligations due to the Trustee or the
Holders by the Company or any part thereof.
Section 1305. Waivers.
-------
(a) Each Guarantor hereby expressly waives (to the extent permitted by law)
notice of the acceptance of this Guarantee and notice of the existence, renewal,
extension or the non-performance, non-payment, or non-observance on the part of
the Company of any of the terms, covenants, conditions and provisions of this
Indenture or the Securities or any other notice whatsoever to or upon the
Company or such Guarantor with respect to the Indenture Obligations. Each
Guarantor hereby acknowledges communication to it of the terms of this Indenture
and the Securities and all of the provisions therein contained and consents to
and approves the same. Each Guarantor hereby expressly waives (to the extent
permitted by law) diligence, presentment, protest and demand for payment.
(b) Without prejudice to any of the rights or recourses which the Trustee
or the Holders may have against the Company, each Guarantor hereby expressly
waives (to the extent permitted by law) any right to require the Trustee or the
Holders to:
(i) initiate or exhaust any rights, remedies or recourse
against the Company, any Guarantor or any other Person;
(ii) value, realize upon, or dispose of any security of the
Company or any other Person held by the Trustee or the Holders; or
(iii) initiate or exhaust any other remedy which the Trustee or
the Holders may have in law or equity; before requiring or becoming
entitled to demand payment from such Guarantor under this Guarantee.
(c) With respect to this Section 1305, to the extent
applicable to any Guarantor, each Guarantor expressly waives application of
Sections 26-7 through 26-9 of the North Carolina General Statutes.
Section 1306. The Guarantors Remain Obligated in Event the Company Is No
----------------------------------------------------------
Longer Obligated to Discharge Indenture Obligations.
---------------------------------------------------
It is the express intention of the Trustee and the Guarantors that if for
any reason the Company has no legal existence, is or becomes under no legal
obligation to discharge the Indenture Obligations owing to the Trustee or the
Holders by the Company or if any of the
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Indenture Obligations owing by the Company to the Trustee or the Holders becomes
irrecoverable from the Company by operation of law or for any reason whatsoever,
this Guarantee and the covenants, agreements and obligations of the Guarantors
contained in this Article Thirteen shall nevertheless be binding upon the
Guarantors, as principal debtor, until such time as all such Indenture
Obligations have been paid in full to the Trustee and all such Indenture
Obligations owing to the Trustee or the Holders by the Company have been
discharged, or such earlier time as Section 402 shall apply to the Securities
and the Guarantors shall be responsible for the payment thereof to the Trustee
or the Holders upon demand.
Section 1307. Fraudulent Conveyance; Contribution Subrogation.
-----------------------------------------------
(a) Each Guarantor that is a Subsidiary of the Company, and by its
acceptance hereof each Holder, hereby confirms that it is the intention of all
such parties that the Guarantee by such Guarantor pursuant to its Guarantee not
constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar federal or state law. To effectuate the foregoing intention, the
Holders and such Guarantor hereby irrevocably agree that the obligations of such
Guarantor under its Guarantee shall be limited to the maximum amount which,
after giving effect to all other contingent and fixed liabilities of such
Guarantor, and after giving effect to any collections from or payments made by
or on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Guarantee or pursuant to its contribution obligations under
this Indenture, will result in the obligations of such Guarantor under its
Guarantee not constituting such fraudulent transfer or conveyance.
(b) Each Guarantor that makes a payment or distribution under its Guarantee
shall be entitled to a contribution from each other Guarantor, if any, in a pro
rata amount based on the net assets of each Guarantor, determined in accordance
with GAAP.
(c) Each Guarantor hereby waives all rights of subrogation or contribution,
whether arising by contract or operation of law (including, without limitation,
any such right arising under federal bankruptcy law) or otherwise by reason of
any payment by it pursuant to the provisions of this Article Thirteen.
Section 1308. Guarantee Is in Addition to Other Security.
------------------------------------------
This Guarantee shall be in addition to and not in substitution for any
other guarantees or other security which the Trustee may now or hereafter hold
in respect of the Indenture Obligations owing to the Trustee or the Holders by
the Company and (except as may be required by law) the Trustee shall be under no
obligation to marshal in favor of each of the Guarantors any other guarantees or
other security or any moneys or other assets which the Trustee may be entitled
to receive or upon which the Trustee or the Holders may have a claim.
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Section 1309. Release of Security Interests.
-----------------------------
Without limiting the generality of the foregoing and except as otherwise
provided in this Indenture, each Guarantor hereby consents and agrees, to the
fullest extent permitted by applicable law, that the rights of the Trustee
hereunder, and the liability of the Guarantors hereunder, shall not be affected
by any and all releases for any purpose of any collateral, if any, from the
Liens and security interests created by any collateral document and that this
Guarantee shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Indenture Obligations is rescinded or
must otherwise be returned by the Trustee upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, all as though such payment had not
been made.
Section 1310. No Bar to Further Actions.
-------------------------
Except as provided by law, no action or proceeding brought or instituted
under Article Thirteen and this Guarantee and no recovery or judgment in
pursuance thereof shall be a bar or defense to any further action or proceeding
which may be brought under Article Thirteen and this Guarantee by reason of any
further default or defaults under Article Thirteen and this Guarantee or in the
payment of any of the Indenture Obligations owing by the Company.
Section 1311. Failure to Exercise Rights Shall Not Operate as a Waiver; No
------------------------------------------------------------
Suspension of Remedies.
----------------------
(a) No failure to exercise and no delay in exercising, on the part of the
Trustee or the Holders, any right, power, privilege or remedy under this Article
Thirteen and this Guarantee shall operate as a waiver thereof, nor shall any
single or partial exercise of any rights, power, privilege or remedy preclude
any other or further exercise thereof, or the exercise of any other rights,
powers, privileges or remedies. The rights and remedies herein provided for are
cumulative and not exclusive of any rights or remedies provided in law or
equity.
(b) Nothing contained in this Article Thirteen shall limit the right of the
Trustee or the Holders to take any action to accelerate the maturity of the
Securities pursuant to Article Five or to pursue any rights or remedies
hereunder or under applicable law.
Section 1312. Trustee's Duties; Notice to Trustee.
-----------------------------------
(a) Any provision in this Article Thirteen or elsewhere in this Indenture
allowing the Trustee to request any information or to take any action authorized
by, or on behalf of any Guarantor, shall be permissive and shall not be
obligatory on the Trustee except as the Holders may direct in accordance with
the provisions of this Indenture or where the failure of the Trustee to request
any such information or to take any such action arises from the Trustee's
negligence, bad faith or willful misconduct.
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(b) The Trustee shall not be required to inquire into the existence, powers
or capacities of the Company, any Guarantor or the officers, directors, trustees
or agents acting or purporting to act on their respective behalf.
Section 1313. Successors and Assigns.
----------------------
All terms, agreements and conditions of this Article Thirteen shall extend
to and be binding upon each Guarantor and its successors and permitted assigns
and shall enure to the benefit of and may be enforced by the Trustee and its
successors and assigns; provided, however, that the Guarantors may not assign
any of their rights or obligations hereunder other than in accordance with
Article Eight.
Section 1314. Release of Guarantee.
--------------------
Concurrently with the payment in full of all of the Indenture Obligations,
the Guarantors shall be released from and relieved of their obligations under
this Article Thirteen. Upon the delivery by the Company to the Trustee of an
Officer's Certificate and, if requested by the Trustee, an Opinion of Counsel to
the effect that the transaction giving rise to the release of this Guarantee was
made by the Company in accordance with the provisions of this Indenture and the
Securities, the Trustee shall execute any documents reasonably required in order
to evidence the release of the Guarantors from their obligations under this
Guarantee. If any of the Indenture Obligations are revived and reinstated after
the termination of this Guarantee, then all of the obligations of the Guarantors
under this Guarantee shall be revived and reinstated as if this Guarantee had
not been terminated until such time as the Indenture Obligations are paid in
full, and each Guarantor shall enter into an amendment to this Guarantee,
reasonably satisfactory to the Trustee, evidencing such revival and
reinstatement.
This Guarantee shall terminate with respect to each Guarantor and shall be
automatically and unconditionally released and discharged under any
circumstances set forth pursuant to Section 301.
Section 1315. Execution of Guarantee.
----------------------
To evidence the Guarantee, each Guarantor hereby agrees to execute the
guarantee substantially in the form set forth in Section 204, to be endorsed on
each Security authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of each Guarantor by its General Partner (by an
authorized officer), Chairman of the Board, its President, or one of its Vice
Presidents and attested by its Secretary or one of its Assistant Secretaries.
The signature of any of these officers on the Securities may be manual or
facsimile.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
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CAPITAL AUTOMOTIVE REIT, as Issuer
Attest By:
- ----------------------- ----------------------------------
Name: Name:
Title: Title:
Attest [Name of Trustee], as Trustee
By:
- ----------------------- ----------------------------------
Name: Name:
Title: Title:
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STATE OF _________________)
) ss.:
COUNTY OF _______________)
On the ___ day of _____________, ____, before me personally came
___________, to me known, who, being by me duly sworn, did depose and say that
he resides at __________________________________________________________________
__________________________________________________________________; that he is
__________ of Capital Automotive REIT, the real estate investment trust
described in and which executed the foregoing instrument; and that he signed his
name thereto pursuant to authority of the Boards of Trustees of such company.
(NOTARIAL SEAL)
- ----------------------------
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STATE OF _______________________)
) ss.:
COUNTY OF _____________________)
On the ____ day of _________ ___, 19___, before me personally came ______,
to me known, who, being by me duly sworn, did depose and say that he resides at
________________________________________________________________________________
____________________________; that he is an authorized officer of [Name of
Trustee], one of the corporations described in and which executed the above
instrument; that he knows the corporate seal of such corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed
pursuant to authority of the board of directors of such corporation; and that he
signed his name thereto pursuant to like authority.
(NOTARIAL SEAL)
- ---------------------------
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EXHIBIT 4.4
(FORM OF SUBORDINATED INDENTURE)
CAPITAL AUTOMOTIVE REIT, as Issuer,
and
___________________, as Trustee
SUBORDINATED INDENTURE
Dated as of ___________, ____
Providing for Issuance of
Subordinated Debt Securities in Series
<PAGE>
TABLE OF CONTENTS
<TABLE>
Page
<S> <C>
RECITALS OF THE COMPANY......................................... 2
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION.................................. 2
Section 101. Definitions.................................. 2
Section 102. Other Definitions............................ 16
Section 103. Compliance Certificates and Opinions......... 16
Section 104. Form of Documents Delivered to Trustee....... 17
Section 105. Acts of Holders.............................. 18
Section 106. Notices, etc., to Trustee, the Company
and any Guarantor............................ 19
Section 107. Notice to Holders; Waiver.................... 19
Section 108. Conflict with Trust Indenture Act............ 20
Section 109. Effect of Headings and Table of Contents..... 20
Section 110 Successors and Assigns....................... 20
Section 111. Separability Clause.......................... 20
Section 112. Benefits of Indenture........................ 21
Section 113. Governing Law................................ 21
Section 114. Legal Holidays............................... 21
Section 115. Schedules and Exhibits....................... 21
Section 116. Counterparts................................. 21
ARTICLE TWO SECURITY FORMS............................... 21
Section 201. Forms Generally.............................. 22
Section 202. Form of and Provisions Required in Global
Security..................................... 23
Section 203. Form of Trustee's Certificate of
Authentication............................... 23
Section 204. Form of Guarantee of Each of the
Guarantors................................... 24
ARTICLE III THE SECURITIES............................... 26
Section 301. Amount Unlimited; Issuable in Series......... 26
Section 302. Denominations................................ 30
Section 303. Execution, Authentication, Delivery and
Dating....................................... 30
Section 304. Temporary Securities......................... 32
Section 305. Global Securities............................ 32
Section 306. Registration, Registration of Transfer
and Exchange................................. 34
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Section 307. Mutilated, Destroyed, Lost and Stolen 35
Securities................................
Section 308. [RESERVED]................................ 36
Section 309. Payment of Interest; Interest Rights
Preserved................................. 36
Section 310. Persons Deemed Owners..................... 37
Section 311. Cancellation.............................. 38
Section 312. Computation of Interest................... 38
Section 313. CUSIP Numbers............................. 38
ARTICLE FOUR DEFEASANCE AND COVENANT DEFEASANCE........ 39
Section 401. Company's Option to Effect Defeasance or
Covenant Defeasance....................... 39
Section 402. Defeasance and Discharge.................. 39
Section 403. Covenant Defeasance....................... 40
Section 404. Conditions to Defeasance or Covenant
Defeasance................................ 40
Section 405. Deposited Money and U.S. Government
Obligations to Be Held in Trust; Other
Miscellaneous Provisions.................. 42
Section 406. Reinstatement............................. 43
ARTICLE FIVE REMEDIES.................................. 43
Section 501. Events of Default......................... 43
Section 502. Acceleration of Maturity; Rescission and
Annulment................................. 45
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee.................... 47
Section 504. Trustee May File Proofs of Claim.......... 47
Section 505. Trustee May Enforce Claims without
Possession of Securities.................. 48
Section 506. Application of Money Collected............ 48
Section 507. Limitation on Suits....................... 49
Section 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest........... 50
Section 509. Restoration of Rights and Remedies........ 50
Section 510. Rights and Remedies Cumulative............ 50
Section 511. Delay or Omission Not Waiver.............. 50
Section 512. Control by Holders........................ 51
Section 513. Waiver of Past Defaults................... 51
Section 514. Undertaking for Costs..................... 51
Section 515. Waiver of Stay, Extension or Usury Laws... 52
ARTICLE SIX THE TRUSTEE............................... 52
Section 601. Notice of Defaults........................ 52
</TABLE>
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<TABLE>
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Section 602. Certain Rights of Trustee................. 52
Section 603. Trustee Not Responsible for Recitals,
Dispositions of Securities or
Application of Proceeds Thereof........... 54
Section 604. Trustee and Agents May Hold Securities;
Collections; etc.......................... 54
Section 605. Money Held in Trust....................... 54
Section 606. Compensation and Indemnification of
Trustee and Its Prior Claim............... 55
Section 607. Conflicting Interests..................... 55
Section 608. Corporate Trustee Required; Eligibility... 56
Section 609. Resignation and Removal; Appointment of
Successor Trustee......................... 56
Section 610. Acceptance of Appointment by Successor.... 58
Section 611. Merger, Conversion, Consolidation or
Succession to Business.................... 59
Section 612. Preferential Collection of Claims Against
Company................................... 60
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE
AND COMPANY............................... 60
Section 701. Company to Furnish Trustee Names and
Addresses of Holders...................... 60
Section 702. Disclosure of Names and Addresses of
Holders................................... 60
Section 703. Reports by Trustee........................ 60
Section 704. Reports by Company and Guarantors......... 61
ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE......................... 61
Section 801. Company or Any Guarantor May Consolidate,
etc., Only on Certain Terms............... 61
Section 802. Successor Substituted..................... 63
ARTICLE NINE SUPPLEMENTAL INDENTURES................... 64
Section 901. Supplemental Indentures and Agreements
without Consent of Holders................ 64
Section 902. Supplemental Indentures and Agreements
with Consent of Holders................... 65
Section 903. Execution of Supplemental Indentures and
Agreements................................ 66
Section 904. Effect of Supplemental Indentures......... 67
Section 905. Conformity with Trust Indenture Act....... 67
Section 906. Reference in Securities to Supplemental
Indentures................................ 67
Section 907. Effect on Senior Indebtedness............. 67
ARTICLE TEN COVENANTS................................. 67
</TABLE>
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<TABLE>
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Section 1001. Payment of Principal, Premium and Interest.. 67
Section 1002. Maintenance of Office or Agency............. 68
Section 1003. Money for Security Payments to Be Held in
Trust....................................... 68
Section 1004. Corporate Existence......................... 70
Section 1005. Payment of Taxes and Other Claims........... 70
Section 1006. Maintenance of Properties................... 70
Section 1007. Insurance................................... 71
Section 1008. Statement by Officers as to Default......... 71
Section 1009. Waiver of Certain Covenants................. 71
ARTICLE ELEVEN REDEMPTION OF SECURITIES.................... 72
Section 1101. Rights of Redemption........................ 72
Section 1102. Applicability of Article.................... 72
Section 1103. Election to Redeem; Notice to Trustee....... 72
Section 1104. Selection by Trustee of Securities to Be
Redeemed.................................... 72
Section 1105. Notice of Redemption........................ 73
Section 1106. Deposit of Redemption Price................. 74
Section 1107. Securities Payable on Redemption Date....... 74
Section 1108. Securities Redeemed or Purchased in Part.... 74
ARTICLE TWELVE SUBORDINATION OF SECURITIES................. 75
Section 1201. Securities Subordinate to Senior
Indebtedness................................ 75
Section 1202. Payment Over of Proceeds Upon Dissolution,
etc......................................... 75
Section 1203. Suspension of Payment When Senior
Indebtedness in Default..................... 77
Section 1204. Payment Permitted if No Default............. 78
Section 1205. Subrogation to Rights of Holders of
Senior Indebtedness......................... 78
Section 1206. Provisions Solely to Define Relative Rights 79
Section 1207. Trustee to Effectuate Subordination......... 79
Section 1208. No Waiver of Subordination Provisions....... 79
Section 1209. Notice to Trustee........................... 80
Section 1210. Reliance on Judicial Order or Certificate
of Liquidating Agent........................ 81
Section 1211. Rights of Trustee as a Holder of Senior
Indebtedness; Preservation of Trustee's
Rights...................................... 81
Section 1212. Article Applicable to Paying Agents......... 81
Section 1213. No Suspension of Remedies................... 82
Section 1214. Trustee's Relation to Senior Indebtedness... 82
ARTICLE THIRTEEN SATISFACTION AND DISCHARGE.................. 82
</TABLE>
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Section 1301. Satisfaction and Discharge of Indenture..... 82
Section 1302. Application of Trust Money.................. 83
ARTICLE FOURTEEN GUARANTEE................................... 84
Section 1401. Guarantors' Guarantee....................... 84
Section 1402 Continuing Guarantee; No Right of Set-Off;
Independent Obligation...................... 84
Section 1403. Guarantee Absolut........................... 85
Section 1404. Right to Demand Full Performance............ 87
Section 1405. Waivers..................................... 87
Section 1406. The Guarantors Remain Obligated in Event
the Company Is No Longer Obligated to
Discharge Indenture Obligations............. 88
Section 1407. Fraudulent Conveyance; Contribution
Subrogation................................. 88
Section 1408. Guarantee Is in Addition to Other Security.. 89
Section 1409. Release of Security Interests............... 89
Section 1410. No Bar to Further Actions................... 89
Section 1411. Failure to Exercise Rights Shall Not
Operate as a Waiver; No Suspension of
Remedies.................................... 90
Section 1412. Trustee's Duties; Notice to Trustee......... 90
Section 1413. Successors and Assigns...................... 90
Section 1414. Release of Guarantee........................ 90
Section 1415. Execution of Guarantee...................... 91
Section 1416. Guarantee Subordinate to Guarantor Senior
Indebtedness................................ 91
Section 1417. Payment Over of Proceeds Upon Dissolution
of the Guarantor, etc....................... 92
Section 1418. Default on Guarantor Senior Indebtedness.... 93
Section 1419. Payment Permitted by Each of the Guarantors
if No Default............................... 93
Section 1420. Subrogation to Rights of Holders of
Guarantor Senior Indebtedness............... 94
Section 1421. Provisions Solely to Define Relative Rights. 94
Section 1422. Trustee to Effectuate Subordination......... 94
Section 1423. No Waiver of Subordination Provisions....... 95
Section 1424. Notice to Trustee by Each of the Guarantors. 95
Section 1425. Reliance on Judicial Order or Certificate
of Liquidating Agent........................ 96
Section 1426. Rights of Trustee as a Holder of Guarantor
Senior Indebtedness; Preservation of
Trustee's Rights............................ 97
Section 1427. Article Applicable to Paying Agents......... 97
Section 1428. No Suspension of Remedies................... 97
Section 1429. Trustee's Relation to Guarantor Senior
Indebtedness................................ 97
</TABLE>
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<PAGE>
Reconciliation and ties between Trust Indenture Act of 1939, as amended,
and Indenture, dated as of ____________, 1998.
Trust Indenture Act Section Indenture Section(s)
- --------------------------- --------------------
(S)(S) 310 (a)(1) 608
(a)(2) 608
(b) 607, 609
(S)(S) 311 (a) 612
(S)(S) 312 (a) 701
(b) 702
(c) 702
(S)(S) 313 (a) 703
(c) 703, 704
(S)(S) 314 (a) 704
(a)(4) 1008
(c)(1) 103, 104, 404, 1103
(c)(2) 103, 104, 404, 1103
(e) 103
(S)(S) 315 (a) 602, 903
(b) 601
(c) 602
(d) 602
(e) 514
(S)(S) 316 (a)(last sentence) 101
(a)(1)(A) 512
(a)(1)(B) 513
(b) 508
(c) 105
(S)(S) 317 (a)(1) 503
(a)(2) 504
(b) 1003
(S)(S) 318 (a) 108
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of this Indenture.
<PAGE>
INDENTURE, dated as of ____________, 1998, between CAPITAL AUTOMOTIVE REIT,
a real estate investment trust organized under the laws of the State of Maryland
(the "Company"), and _______________________________________________________, a
national banking association organized under the laws of the United States of
America, as trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its subordinated
debentures, notes or other evidences of indebtedness ("Securities") to be issued
in one or more series as herein provided.
This Indenture is subject to, and shall be governed by, the provisions of
the Trust Indenture Act that are required to be part of and to govern indentures
qualified under the Trust Indenture Act.
All acts and things necessary have been done to make (i) the Securities of
any series, when their terms have been determined in accordance with this
Indenture and when executed by the Company and authenticated and delivered
hereunder and duly issued by the Company, the valid obligations of the Company,
(ii) the Guarantees, if and when executed by each of the Guarantors and
delivered hereunder, the valid obligation of each of the Guarantors and (iii)
this Indenture a valid agreement of the Company and, if applicable, each of the
Guarantors in accordance with the terms of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities or of any series thereof,
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 as set forth pursuant to Section 301 or unless the context otherwise
requires:
(a) the terms defined in this Article have the meanings assigned to them in
this Article, and include the plural as well as the singular;
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<PAGE>
(b) 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;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
(d) the words "herein," "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision; and
(e) all references to $, US$, dollars or United States dollars shall refer
to the lawful currency of the United States of America.
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person, (ii) any other Person that
owns, directly or indirectly, 5% or more of such Person's Equity Interest or any
officer director or trustee of any such Person or other Person or, with respect
to any natural Person, any Person having a relationship with such Person or
other Person by blood, marriage or adoption not more remote than first cousin or
(iii) any other Person 10% or more of the voting Equity Interests of which are
beneficially owned or held directly or indirectly by such specified Person. For
the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person directly or indirectly, whether through ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Bankruptcy Law" means Title 11, United States Bankruptcy Code of 1978, as
amended, or any similar United States federal or state law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or
relief of debtors or any amendment to, succession to or change in any such law.
"Bearer Security" means any Security issued hereunder which is payable to
bearer.
"Board of Trustees" means the board of Trustees of the Company or any
Guarantor, as the case may be, or any duly authorized committee of such board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company or any Guarantor, as the case may be,
to have been duly adopted by the Board of Trustees or similar governing body of
such entity and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
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<PAGE>
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in The City of New York, the
Commonwealth of Virginia or the city in which the Corporate Trust Office is
located are authorized or obligated by law or executive order to close.
"Capital Lease Obligation" means any obligation of the Company and its
Restricted Subsidiaries on a Consolidated basis under any capital lease of real
or personal property which, in accordance with GAAP, has been recorded as a
capitalized lease obligation.
"Cash Equivalents" means, (i) any evidence of Indebtedness with a maturity
of one year or less from the date of acquisition issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof); (ii) certificates of deposit
or acceptances with a maturity of one year or less from the date of acquisition
of any financial institution that is a member of the Federal Reserve System
having combined capital and surplus and undivided profits of not less than
$500,000,000; (iii) commercial paper with a maturity of one year or less from
the date of acquisition issued by a Person that is not an Affiliate of the
Company organized under the laws of any state of the United States or the
District of Columbia and rated A-1 (or higher) according to S&P or P-1 (or
higher) according to Moody's or at least an equivalent rating category of
another nationally recognized securities rating agency; (iv) any money market
deposit accounts issued or offered by a domestic commercial bank having capital
and surplus in excess of $500,000,000; and (v) repurchase agreements and reverse
repurchase agreements relating to marketable direct obligations issued or
unconditionally guaranteed by the government of the United States of America or
issued by any agency thereof and backed by the full faith and credit of the
United States of America, in each case maturing within one year from the date of
acquisition; provided that the terms of such agreements comply with the
guidelines set forth in the Federal Financial Agreements of Depository
Institutions With Securities Dealers and Others, as adopted by the Comptroller
of the Currency on October 31, 1985.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means Capital Automotive REIT, a real estate investment trust
organized under the laws of the State of Maryland, until a successor Person
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Company" shall mean such successor Person.
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<PAGE>
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by any one of its Chairman of the Board, its
Vice Chairman, its President or a Vice President (regardless of vice
presidential designation), and by any one of its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Consolidated Net Worth" means the consolidated equity of the holders of
Equity Interests (excluding Disqualified Equity Interests) of the Company and
its Restricted Subsidiaries, as determined in accordance with GAAP consistently
applied.
"Corporate Trust Office" means the office of the Trustee or an affiliate or
agent thereof at which at any particular time the corporate trust business for
the purposes of this Indenture shall be principally administered, which office
at the date of execution of this Indenture is located at ______________________,
Attention: _____________.
"Default" means any event which is, or after notice or passage of any time
or both would be, an Event of Default.
"Depositary" means, with respect to the Securities issued in the form of
Global Securities, if any, The Depository Trust Company, a New York limited
purpose corporation, its nominees and successors, or any other Person designated
as the Depositary by the Company pursuant to Section 305(b), in each case
registered as a "clearing agency" under the Exchange Act and maintaining a book-
entry system that qualifies for treatment as "registered form" under Section
163(f) of the Code.
"Designated Guarantor Senior Indebtedness" means any Guarantor Senior
Indebtedness which is incurred pursuant to an agreement (or series of related
agreements) simultaneously entered into providing for indebtedness, or
commitments to lend, of at least $25,000,000 at the time of determination and is
specifically designated in the instrument evidencing such Guarantor Senior
Indebtedness (or the agreement under which such Guarantor Senior Indebtedness
arises) as "Designated Guarantor Senior Indebtedness" by the Guarantor which is
the obligor under the Guarantor Senior Indebtedness.
"Designated Senior Indebtedness" means any Senior Indebtedness which is
incurred pursuant to an agreement (or series of related agreements)
simultaneously entered into providing for indebtedness, or commitments to lend,
of at least $25,000,000 at the time of determination and is specifically
designated in the instrument evidencing such Senior Indebtedness (or the
agreement under which such Senior Indebtedness arises) as "Designated Senior
Indebtedness" by the Company.
"Disqualified Equity Interests" means any Equity Interests that, either by
their terms or by the terms of any security into which they are convertible or
exchangeable or otherwise, are or upon the happening of an event or passage of
time would be required to be redeemed prior to any
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<PAGE>
Stated Maturity of the principal of the Securities or are redeemable at the
option of the holder thereof at any time prior to any such Stated Maturity, or
are convertible into or exchangeable for debt securities at any time prior to
any such Stated Maturity at the option of the holder thereof.
"Equity Interest" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock or other equity
participations, including without limitation partnership interests, whether
general or limited, and interests in limited liability companies, of such
Person, including any Preferred Equity Interests.
"Event of Default" has the meaning specified in Article Five.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, with respect to any asset or property, the sale
value that would be obtained in an arm's-length transaction between an informed
and willing seller under no compulsion to sell and an informed and willing buyer
under no compulsion to buy.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied, which
are in effect on the date of this Indenture.
"Global Security" means a Security of any series in book entry form
evidencing all or part of the Securities of any series, issued to the Depositary
or its nominee and registered in the name of the Depositary or such nominee.
"Guarantee" means, in respect of the Securities of any series, the
guarantee, if any, by any Guarantor, if any, of the Company's Indenture
Obligations pursuant to a guarantee given in accordance with Section 301 of this
Indenture, including, without limitation, the Guarantees by the Guarantors, if
any, included in Article Fourteen of this Indenture.
"Guaranteed Debt" of any Person means, without duplication, all
Indebtedness of any other Person referred to in the definition of Indebtedness
contained in this Section guaranteed directly or indirectly in any manner by
such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (i) to pay or purchase such Indebtedness or to advance or
supply funds for the payment or purchase of such Indebtedness, (ii) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such
Indebtedness or to assure the holder of such Indebtedness against loss, (iii) to
supply funds to, or in any other manner invest in, the debtor (including any
agreement to pay for property or services without requiring that such property
be received or such services be rendered), (iv) to maintain working capital or
equity capital of the debtor, or otherwise to maintain the net worth, solvency
or other financial condition of the debtor or (v)
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<PAGE>
otherwise to assure a creditor against loss; provided that the term "guarantee"
shall not include endorsements for collection or deposit, in either case in the
ordinary course of business.
"Guarantor," as of any time, means, in respect of a series of Securities, a
Subsidiary which provides a Guarantee pursuant to Section 301 of the Indenture
or any other guarantor of the Indenture Obligations. Guarantors, if any, will be
listed as signatories to any supplemental indenture of any series of Securities
which provide for Guarantees.
"Guarantor Senior Indebtedness" means the principal of, premium, if any,
and interest (including interest accruing after the filing of a petition
initiating any proceeding under any state, federal or foreign bankruptcy laws
whether or not allowable as a claim in such proceeding) on any Indebtedness of
any Guarantor (other than as otherwise provided in this definition), whether
outstanding on the date of this Indenture or thereafter created, incurred or
assumed, and whether at any time owing, actually or contingent, unless, in the
case of any particular Indebtedness, the instrument creating or evidencing the
same or pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to any Guarantee.
Notwithstanding the foregoing, "Guarantor Senior Indebtedness" shall not include
(i) Indebtedness evidenced by the Guarantees, (ii) Indebtedness that is
subordinate or junior in right of payment to any Indebtedness of any Guarantor,
(iii) Indebtedness which when incurred and without respect to any election under
Section 1111(b) of Title 11 of the United States Code, is without recourse to
any Guarantor, (iv) Indebtedness which is represented by Disqualified Equity
Interests, (v) any liability for foreign, federal, state, local or other taxes
owed or owing by any Guarantor to the extent such liability constitutes
Indebtedness, (vi) Indebtedness of any Guarantor to a Subsidiary or any other
Affiliate of the Company or any of such Affiliate's subsidiaries, (vii)
Indebtedness evidenced by any guarantee of any Subordinated Indebtedness or Pari
Passu Indebtedness, (viii) that portion of any Indebtedness which at the time of
issuance is issued in violation of this Indenture and (ix) Indebtedness owed by
any Guarantor for compensation to employees or for services.
"Holder" means a Person in whose name a Security of any series is
registered in the Security Register.
"Indebtedness" means, with respect to any Person, without duplication, (i)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, excluding any trade payables and other accrued
current liabilities arising in the ordinary course of business, but including,
without limitation, all obligations, contingent or otherwise, of such Person in
connection with any letters of credit issued under letter of credit facilities,
acceptance facilities or other similar facilities and in connection with any
agreement to purchase, redeem, exchange, convert or otherwise acquire for value
any Equity Interests of such Person, or any warrants, rights or options to
acquire such Equity Interests, now or hereafter outstanding, (ii) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments, (iii) all indebtedness created or arising under any
conditional sale or other
-7-
<PAGE>
title retention agreement with respect to property acquired by such Person (even
if the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), but
excluding trade payables arising in the ordinary course of business, (iv) all
Capital Lease Obligations of such Person, (v) all Indebtedness referred to in
clauses (i) through (iv) above of other Persons and all dividends of other
Persons, the payment of which is secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien, upon or with respect to property (including, without limitation,
accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness, (vi) all
Guaranteed Debt of such Person, (vii) all Disqualified Equity Interests valued
at the greater of their voluntary or involuntary maximum fixed repurchase price
plus accrued and unpaid dividends, and (viii) any amendment, supplement,
modification, deferral, renewal, extension, refunding or refinancing of any
liability of the types referred to in clauses (i) through (vii) above. The
amount of Indebtedness of any Person at any date shall be, without duplication,
the principal amount that would be shown on a balance sheet of such Person
prepared as of such date in accordance with GAAP and the maximum determinable
liability of any Guaranteed Debt referred to in clause (vi) above at such date.
The Indebtedness of the Company and its Restricted Subsidiaries shall not
include any Indebtedness of Unrestricted Subsidiaries so long as such
Indebtedness is non-recourse to the Company and the Restricted Subsidiaries. For
purposes hereof, the "maximum fixed repurchase price" of any Disqualified Equity
Interests which do not have a fixed repurchase price shall be calculated in
accordance with the terms of such Disqualified Equity Interests as if such
Disqualified Equity Interests were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the Fair Market Value of such Disqualified Equity
Interests, such Fair Market Value to be determined in good faith by the Board of
Trustees or similar governing body of the issuer of such Disqualified Equity
Interests.
"Indenture" means this instrument as originally executed and 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, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively. The term
"Indenture" shall also include the terms of particular series of Securities
established as contemplated by Section 301.
"Indenture Obligations" means the obligations of the Company and any other
obligor under this Indenture or under the Securities of any series, including
any Guarantor, to pay principal, premium, if any, and interest when due and
payable under the Securities of that series, and all other amounts due or to
become due under or in connection with this Indenture, the Securities of that
series, and the performance of all other obligations to the Trustee and the
Holders under this Indenture and the Securities of that series, according to the
terms hereof and thereof.
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<PAGE>
"Independent Trustee" means a Trustee of the Company other than a Trustee
(i) who (apart from being a Trustee of the Company or any Subsidiary) is an
employee, insider, associate or Affiliate of the Company or a Subsidiary or has
held any such position during the previous five years or (ii) who is a Trustee,
an employee, insider, associate or Affiliate of another party to the transaction
in question.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Investments" means, with respect to any Person, directly or indirectly,
any advance, loan (including guarantees), or other extension of credit or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase, acquisition or ownership by such Person of any Equity
Interests, bonds, notes, debentures or other securities or assets issued or
owned by any other Person and all other items that would be classified as
investments on a balance sheet prepared in accordance with GAAP.
"Lien" means any mortgage, charge, pledge, lien (statutory or otherwise),
privilege, security interest, hypothecation or other encumbrance upon or with
respect to any property of any kind (including any conditional sale or other
title retention agreement, any leases in the nature thereof, and any agreement
to give any security interest), real or personal, movable or immovable, now
owned or hereafter acquired.
"Maturity" when used with respect to any Security means the date on which
the principal of such Security becomes due and payable as therein provided or as
provided in this Indenture, whether at Stated Maturity, or the Redemption Date
and whether by declaration of acceleration, call for redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc. or any successor rating
agency.
"Non-Payment Default" means any event (other than a Payment Default) the
occurrence of which entitles one or more Persons to accelerate the maturity of
any Designated Senior Indebtedness.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, Vice Chairman, the President or a Vice President (regardless of vice
presidential designation), and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company or any Guarantor, as the
case may be, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, any of the Guarantors or the Trustee, unless an Opinion of
Independent Counsel is required pursuant to the terms of this Indenture, and who
shall be acceptable to the Trustee.
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<PAGE>
"Opinion of Independent Counsel" means a written opinion of counsel issued
by someone who is not an employee or consultant of the Company or any Guarantor
and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security that: (1) provides
for an amount less than the stated principal amount thereof to be due and
payable upon declaration of acceleration of the Maturity thereof pursuant to
Section 301 or (2) does not provide for payment of interest prior to maturity.
"Outstanding" when used with respect to Securities of any series means,
unless otherwise provided pursuant to Section 301, as of the date of
determination, all Securities theretofore authenticated and delivered under this
Indenture, except:
(a) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company or any Affiliate
thereof) in trust or set aside and segregated in trust by the Company or
such Affiliate (if the Company or such Affiliate shall act as the Paying
Agent) for the Holders; provided that if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor reasonably satisfactory to the Trustee has
been made;
(c) Securities, except to the extent provided in Sections 402 and
403, with respect to which the Company has effected defeasance or covenant
defeasance as provided in Article Four; and
(d) Securities in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this Indenture, other
than any such Securities in respect of which there shall have been
presented to the Trustee proof reasonably satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands the Securities
are valid obligations of the Company; provided, however, that in
determining whether the Holders of the requisite principal amount of
Outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by the
Company, any Guarantor, or any other obligor upon the Securities or any
Affiliate of the Company, any Guarantor, or such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the reasonable
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<PAGE>
satisfaction of the Trustee the pledgee's right so to act with respect to
such Securities and that the pledgee is not the Company, any Guarantor or
any other obligor upon the Securities or any Affiliate of the Company, any
Guarantor or such other obligor.
"Pari Passu Indebtedness" means any Indebtedness of the Company or any
Guarantor that is pari passu in right of payment to the Securities or any
Guarantee of any particular series, as the case may be.
"Paying Agent" means any Person authorized by the Company to pay the
principal of, premium, if any, or interest on any Securities on behalf of the
Company.
"Payment Default" means any default in the payment of principal of,
premium, if any, or interest, on any Designated Senior Indebtedness.
"Permitted Guarantor Junior Securities" means (so long as the effect of any
exclusion employing this definition is not to cause the Guarantee to be treated
in any case or proceeding or similar event described in clause (a), (b) or (c)
of Section 1417 as part of the same class of claims as the Guarantor Senior
Indebtedness or any class of claims pari passu with, or senior to, the Guarantor
Senior Indebtedness) for any payment or distribution, debt or equity securities
of any Guarantor (or any successor corporation provided for by a plan of
reorganization or readjustment) that are subordinated at least to the same
extent that the Guarantee is subordinated to the payment of all Guarantor Senior
Indebtedness then outstanding; provided that (1) if a new corporation results
from such reorganization or readjustment, such corporation assumes any Guarantor
Senior Indebtedness not paid in full in cash or Cash Equivalents in connection
with such reorganization or readjustment and (2) the rights of the holders of
such Guarantor Senior Indebtedness are not, without the consent of such holders,
altered by such reorganization or readjustment.
"Permitted Junior Securities" means (so long as the effect of any exclusion
employing this definition is not to cause the Securities to be treated in any
case or proceeding or similar event described in clause (a), (b) or (c) of
Section 1202 as part of the same class of claims as the Senior Indebtedness or
any class of claims pari passu with, or senior to, the Senior Indebtedness) for
any payment or distribution, debt or equity securities of the Company (or any
successor Person provided for by a plan of reorganization or readjustment) that
are subordinated at least to the same extent that the Securities are
subordinated to the payment of all Senior Indebtedness then outstanding;
provided that (1) if a new Person results from such reorganization or
readjustment, such Person assumes any Senior Indebtedness not paid in full in
cash or Cash Equivalents in connection with such reorganization or readjustment
and (2) the rights of the holders of such Senior Indebtedness are not, without
the consent of such holders, altered by such reorganization or readjustment.
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<PAGE>
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivisions thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 307 in exchange for a mutilated
Security or in lieu of a lost, destroyed or stolen Security shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Security.
"Preferred Equity Interest," as applied to the Equity Interest of any
Person, means an Equity Interest of any class or classes (however designated)
which is preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such person, over Equity Interests of any other class of such
Person.
"Qualified Equity Interests" of any Person means any and all Equity
Interests of such Person other than Disqualified Equity Interests.
"Redemption Date" when used with respect to any Security to be redeemed
pursuant to any provision in this Indenture 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
pursuant to any provision in this Indenture means the price at which it is to be
redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
means the 15th day (whether or not a Business Day) next preceding such Interest
Payment Date.
"Responsible Officer" when used with respect to the Trustee means any
officer assigned to the Corporate Trust Office or the agent of the Trustee
appointed hereunder, including any vice president, assistant vice president,
assistant secretary, or any other officer or assistant officer of the Trustee or
the agent of the Trustee appointed hereunder to whom any corporate trust matter
is referred because of his or her knowledge of and familiarity with the
particular subject.
"Restricted Subsidiary" means a Subsidiary subject to the covenants or
events of default under the agreements governing other indebtedness of the
Company.
"S&P" means Standard & Poor's Ratings Service, a division of the McGraw
Hill Companies, or any successor rating agency.
"Securities" has the meaning specified in the Recitals.
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<PAGE>
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 306.
"Senior Indebtedness" means the principal of, premium, if any, and interest
(including interest accruing after the filing of a petition initiating any
proceeding under any state, federal or foreign bankruptcy law whether or not
allowable as a claim in such proceeding) on any Indebtedness of the Company
(other than as otherwise provided in this definition), whether outstanding on
the date of this Indenture or thereafter created, incurred or assumed, and
whether at any time owing, actually or contingent, unless, in the case of any
particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Securities.
Notwithstanding the foregoing, "Senior Indebtedness" shall not include (i)
Indebtedness evidenced by the Securities, (ii) Indebtedness that is subordinate
or junior in right of payment to any Indebtedness of the Company, (iii)
Indebtedness which when incurred and without respect to any election under
Section 1111(b) of Title 11 of the United States Code, is without recourse to
the Company, (iv) Indebtedness which is represented by Disqualified Equity
Interests, (v) any liability for foreign, federal, state, local or other taxes
owed or owing by the Company to the extent such liability constitutes
Indebtedness, (vi) Indebtedness of the Company to a Subsidiary or any other
Affiliate of the Company or any of such Affiliate's subsidiaries, (vii) that
portion of any Indebtedness which at the time of issuance is issued in violation
of this Indenture and (viii) Indebtedness owed by the Company for compensation
to employees or for services.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 309.
"Stated Maturity" when used with respect to any Indebtedness or any
installment of interest thereon, means the date specified in such Indebtedness
as the fixed date on which the principal of such Indebtedness or such
installment of interest is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company or any
Guarantor subordinated in right of payment to Senior Indebtedness or Guarantor
Senior Indebtedness, as the case may be.
"Subsidiary" means any Person a majority of the equity ownership or the
Voting Stock of which is at the time owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries.
"Successor Security" of any particular Security means every Security issued
after, and evidencing all or a portion of the same debt as that evidenced by,
such particular Security. For
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the purposes of this definition, any Security authenticated and delivered under
Section 307 in exchange for or in lieu of a mutilated, destroyed, lost or stolen
Security shall be deemed to evidence the same debt as the mutilated, destroyed,
lost or stolen Security.
"Temporary Cash Investments" means (i) any evidence of Indebtedness,
maturing not more than one year after the date of acquisition, issued by the
United States of America, or an instrumentality or agency thereof and guaranteed
fully as to principal, premium, if any, and interest by the United States of
America, (ii) any certificate of deposit, maturing not more than one year after
the date of acquisition, issued by, or time deposit of, a commercial banking
institution (including the Trustee) that is a member of the Federal Reserve
System and that has combined capital and surplus and undivided profits of not
less than $500,000,000, whose debt has a rating, at the time as of which any
investment therein is made, of "P-1" (or higher) according to Moody's or "A-1"
(or higher) according to S&P, (iii) commercial paper, maturing not more than one
year after the date of acquisition, issued by a Person (other than an Affiliate
or Subsidiary of the Company) (including the Trustee) organized and existing
under the laws of the United States of America with a rating, at the time as of
which any investment therein is made, of "P-1" (or higher) according to Moody's
or "A-1" (or higher) according to S&P and (iv) any money market deposit accounts
issued or offered by a domestic commercial bank (including the Trustee) having
capital and surplus in excess of $500,000,000.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument, until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee and, if at any time, there is more than one Trustee,
"Trustee" as used with respect to the Securities of any series shall mean the
Trustee with respect to the Securities of that series.
"U.S. Person" means a citizen or resident of the United States, a
corporation, real estate investment trust, limited liability company,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, or an estate or trust, the
income of which is subject to United States federal income taxation regardless
of its source.
"Unrestricted Subsidiary," with respect to any series of Securities, shall
have the meaning set forth as provided pursuant to Section 301.
"Voting Stock" means stock of the class or classes pursuant to which the
holders thereof have the general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of a
Person (irrespective of whether or not at the time stock of any other class or
classes shall have or might have voting power by reason of the happening of any
contingency).
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Section 102. Other Definitions.
-----------------
DEFINED IN
TERM SECTION
---- ----------
"Act" 105
"Agent Members" 305
"Bearer Global Security" 305
"Covenant Defeasance" 403
"Defaulted Interest" 309
"Defeasance" 402
"Defeasance Redemption Date" 404
"Defeased Securities" 401
"Global Security" 202
"Initial Blockage Period" 1203
"Payment Blockage Period" 1203
"Physical Securities" 305
"Senior Representative" 1203
"Surviving Entity" 801
"U.S. Government Obligations" 404
Section 103. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company, any Guarantor and any
other obligor on the Securities of any series shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture (including any covenants compliance with which constitutes
a condition 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,
certificates and/or opinions is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
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Every certificate or Opinion of Counsel with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such individual, such
condition or covenant has been complied with.
Section 104. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company, any Guarantor or
other obligor of the Securities of any series may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company, any Guarantor or
other obligor of the Securities of any series stating that the information with
respect to such factual matters is in the possession of the Company, any
Guarantor or other obligor of the Securities of that series, unless such counsel
knows that the certificate or opinion or representations with respect to such
matters are erroneous. Opinions of Counsel required to be delivered to the
Trustee may have qualifications customary for opinions of the type required and
counsel delivering such Opinions of Counsel may rely on certificates of the
Company or government or other officials customary for opinions of the type
required, including certificates certifying as to matters of fact, including
that various financial covenants have been complied with.
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Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 105. 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 may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Procedures in connection
with acts of Holders with respect to Bearer Securities shall be as provided
pursuant to Section 301. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture, if made in the manner provided in
this Section. The fact and date of the execution by any person of any such
instrument or writing or the authority of the person executing the same, may
also be proved in any other manner which the Trustee deems sufficient in
accordance with such reasonable rules as the Trustee may determine.
(b) The ownership of Securities of any series shall be proved by the
Security Register.
(c) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Security of any series shall bind every
future Holder of the same Security of that series or the Holder of every
Security of that series issued upon the transfer thereof or in exchange therefor
or in lieu thereof, in respect of anything done, suffered or omitted to be done
by the Trustee, any Paying Agent or the Company or any Guarantor in reliance
thereon, whether or not notation of such action is made upon such Security.
(d) If the Company shall solicit from the Holders of Securities of one or
more series any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, by or pursuant to a Board
Resolution, fix in advance a record date for the determination of such Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
Notwithstanding Trust Indenture Act Section 316(c), any such record date shall
be the record date specified in or pursuant to such Board Resolution, which
shall be a date not more than 30 days prior to the first solicitation of Holders
generally in connection therewith and no later than the date such solicitation
is completed.
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In the absence of any such record date fixed by the Company, regardless as
to whether a solicitation of the Holders of Securities of one or more series is
occurring on behalf of the Company or any Holder, the Trustee may, at its
option, fix in advance a record date for the determination of such Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Trustee shall have no obligation to do so.
Any such record date shall be a date not more than 30 days prior to the first
solicitation of Holders generally in connection therewith and no later than a
date such solicitation is completed.
If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for purposes of determining
whether Holders of Securities of one or more series of the requisite proportion
of Securities then Outstanding have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other Act,
and for this purpose the Securities of any series then Outstanding shall be
computed as of such record date; provided that no such request, demand,
authorization, direction, notice, consent, waiver or other Act 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 six months after the
record date.
Section 106. Notices, etc., to Trustee, the Company and any Guarantor.
--------------------------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company or any Guarantor or any
other obligor of the Securities or a Senior Representative or holder of Senior
Indebtedness shall be sufficient for every purpose hereunder if in writing and
mailed, first-class postage prepaid, or delivered by recognized overnight
courier, to or with the Trustee at the Corporate Trust Office, Attention:
Corporate Trust Division, or at any other address previously furnished in
writing to the Holders, the Company, any Guarantor, any other obligor of the
Securities or a Senior Representative or holder of Senior Indebtedness by the
Trustee; or
(b) the Company or any Guarantor shall be sufficient for every purpose
(except as provided in Section 501(c)) hereunder or pursuant to Section 301 if
in writing and mailed, first-class postage prepaid, or delivered by recognized
overnight courier, to the Company or such Guarantor addressed to it at Capital
Automotive REIT, 1420 Spring Hill Road, Suite 525, McLean, Virginia 22102,
Attention: President, or at any other address previously furnished in writing to
the Trustee by the Company.
Section 107. Notice to Holders; Waiver.
-------------------------
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Where this Indenture or the Securities of any series provides for notice to
Holders of the Securities of any series of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, or delivered by recognized overnight
courier, to each Holder affected by such event, at his address as it appears in
the Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice, nor
any defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Any notice when
mailed to a Holder in the aforesaid manner shall be conclusively deemed to have
been received by such Holder whether or not actually received by such Holder.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver. Notices to Holders of Bearer Securities shall be
provided as may be specified pursuant to Section 301.
In case by reason of the suspension of regular mail service or by reason of
any other cause, it shall be impracticable to mail notice of any event as
required by any provision of this Indenture, then any method of giving such
notice as shall be reasonably satisfactory to the Trustee shall be deemed to be
a sufficient giving of such notice.
Section 108. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with any provision
of the Trust Indenture Act or another provision which is required or deemed to
be included in this Indenture by any of the provisions of the Trust Indenture
Act, the provision or requirement of the Trust Indenture Act shall control. If
any provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
Section 109. 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.
Section 110 Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company and the
Guarantors shall bind their successors and assigns, whether so expressed or not.
Section 111. Separability Clause.
-------------------
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In case any provision in this Indenture or in the Securities of any series
or in any Guarantees 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 112. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities or the Guarantees, express
or implied, shall give to any Person (other than the parties hereto and their
successors hereunder, any Paying Agent, the Holders and the holders of Senior
Indebtedness or Guarantor Senior Indebtedness) any benefit or any legal or
equitable right, remedy or claim under this Indenture.
Section 113. Governing Law.
-------------
THIS INDENTURE AND THE SECURITIES OF ANY SERIES AND ANY INTEREST COUPONS
APPERTAINING THERETO AND ANY GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PRINCIPLES THEREOF).
Section 114. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security of any series shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal or premium, if any, need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date or Redemption Date, or at the
Stated Maturity and no interest shall accrue with respect to such payment for
the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, to the next succeeding Business Day.
Section 115. Schedules and Exhibits.
----------------------
All schedules and exhibits attached hereto are by this reference made a
part hereof with the same effect as if herein set forth in full.
Section 116. Counterparts.
------------
This Indenture may be executed in any number of counterparts, each of which
shall be an original; but such counterparts shall together constitute but one
and the same instrument.
ARTICLE TWO
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SECURITY FORMS
Section 201. Forms Generally.
---------------
The Securities of each series and the Trustee's certificate of
authentication and the interest coupons, if any, to be attached thereto shall be
in substantially such form as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with the rules of any applicable securities
exchange, organizational document, governing instrument or law or as may,
consistently herewith, be determined by the officers executing the Securities of
that series and interest coupons, if any, to be attached thereto, as evidenced
by their execution of the Securities and interest coupons, if any. If temporary
Securities of any series are issued as permitted by Section 304, the form
thereof also shall be established as provided in the preceding sentence. If the
forms of Securities and interest coupons, if any, of any series are established
by, or by action taken pursuant to, a Board Resolution, a copy of the Board
Resolution together with an appropriate record of any such action taken pursuant
thereto, including a copy of the approved form of Securities or interest
coupons, if any, shall be delivered to the Trustee at or prior to the delivery
of the Company Order contemplated by Section 303 for the authentication and
delivery of such Securities. Any portion of the text of any Security may be set
forth on the reverse thereof, with an appropriate reference thereto on the face
of the Security.
Unless otherwise provided pursuant to Section 301, Bearer Securities, if
any, shall have interest coupons attached.
The definitive Securities of any series shall be printed, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange on which the
Securities of that series may be listed, all as determined by the officers
executing such Securities, as evidenced by their execution of such Securities.
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Section 202. Form of and Provisions Required in Global Security.
--------------------------------------------------
If Securities of or within a series are issuable in whole or in part in
global form, such Global Securities will be subject to Sections 301, 303, 304
(if applicable), 305 and 306.
Unless otherwise provided pursuant to Section 301, any Global Security
issued hereunder shall bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
IF THE DEPOSITORY TRUST COMPANY IS ACTING AS THE DEPOSITARY, INSERT --
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND ANY SUCH
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Section 203. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
Unless otherwise provided pursuant to Section 301, the Trustee's
certificate of authentication shall be included on the Securities and shall be
substantially in the form as follows:
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Securities referred to in the within-mentioned
Indenture.
[Name of Trustee]
----------------------
As Trustee
By:
----------------------
Authorized Signatory
Section 204. Form of Guarantee of Each of the Guarantors.
-------------------------------------------
If a Guarantee is to be endorsed on a Security of any series, the form of
Guarantee shall be set forth on the Securities substantially as follows:
GUARANTEES
For value received, each of the undersigned hereby unconditionally
guarantees, jointly and severally, to the holder of this Security the payment of
principal of, premium, if any, and interest on this Security in the amounts and
at the time when due and interest on the overdue principal and interest, if any,
of this Security, if lawful, and the payment or performance of all other
obligations of the Company under the Indenture or the Securities, to the holder
of this Security and the Trustee, all in accordance with and subject to the
terms and limitations of this Security and Article Fourteen of the Indenture.
These Guarantees will not become effective until the Trustee duly executes the
certificate of authentication on this Security. The Indebtedness evidenced by
these Guarantees is, to the extent and in the manner provided in the Indenture,
subordinate and subject in right of payment to the prior payment in full of all
Guarantor Senior Indebtedness (as defined in the Indenture), whether Outstanding
on the date of the Indenture or thereafter, and these Guarantees are issued
subject to such provisions.
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<PAGE>
[LIST OF GUARANTORS]
Attest:
By: ______________________ By: ____________________________
Name: ____________________ Name: __________________________
Title: ___________________ Title: __________________________
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ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series.
------------------------------------
(a) The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited. The Securities may be issued
from time to time in one or more series.
(b) The following matters shall be established with respect to each series
of Securities issued hereunder (i) by a Board Resolution, (ii) by action taken
pursuant to a Board Resolution and (subject to Section 303) set forth, or
determined in the manner provided, in an Officers' Certificate or (iii) in one
or more indentures supplemental hereto:
(1) the title of the Securities of the series (which title shall
distinguish the Securities of the series from all other series of
Securities);
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this Indenture
(which limit shall not pertain to Securities authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 304, 306, 307, 906 or 1108 or
any Securities of the series that, pursuant to Section 303, are deemed
never to have been authenticated and delivered hereunder);
(3) the date or dates on which the principal of and premium, if any,
on the Securities of the series will mature or the method or methods of
determining such date or dates;
(4) the rate or rates (which may be fixed or variable) at which the
Securities of the series shall bear interest, if any, or the method or
methods of calculating such rate or rates;
(5) the date or dates from which such interest, if any, shall accrue
or the method or methods by which such date or dates shall be determined;
(6) the date or dates on which interest, if any, shall be payable
and the record date or dates therefor, and the basis upon which interest
shall be calculated if other than that of a 360-day year of twelve 30-day
months;
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(7) the place or places where the principal of, premium, if any, and
interest, if any, on Securities of the series shall be payable, or at which
Securities of the series may be surrendered for registration of transfer
and exchange;
(8) the period or periods within which, the price or prices at which,
the currency or currencies if other than in United States dollars
(including currency unit or units) in which, and the other terms and
conditions upon which, Securities of the series may be redeemed, in whole
or in part, at the option of the Company;
(9) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or upon the happening of a specified event or at the option of a
Holder thereof and the period or periods within which, the price or prices
at which, the currency or currencies (if other than United States dollars)
(including currency unit or units) in which, and the other terms and
conditions upon which, Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;
(10) the denominations in which Securities of the series are authorized
to be issued;
(11) the currency or currency unit in which such Securities may be
denominated and/or the currency or currencies (including currency unit or
units) in which principal of, premium, if any, and interest, if any, on
such Securities will be payable and whether the Company or the holders of
any such Securities may elect to receive payments in respect of such
Securities in a currency or currency unit other than that in which such
Securities are stated to be payable;
(12) if the amount of payments of principal of, premium, if any, and
interest, if any, on the Securities of the series may be determined with
reference to an index, formula or other method (which index, formula or
method may be based, without limitation, on a currency or currencies
(including currency unit or units) other than that in which the Securities
of the series are denominated or designated to be payable), the manner in
which such amounts will be determined;
(13) if other than the entire principal amount thereof, the portion of
the principal amount of such Securities of the series which shall be
payable upon declaration of acceleration thereof pursuant to Section 502 or
the method by which such portion shall be determined;
(14) provisions, if any, granting special rights to the Holders of
Securities of the series upon the occurrence of such events as may be
specified;
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(15) any addition to, modifications of or deletion from the Events of
Default set forth in Section 501 or covenants of the Company set forth in
Article Nine pertaining to the Securities of the series;
(16) the circumstances, if any, under which the Company will pay
additional amounts on the Securities of that series held by a Person who is
not a U.S. Person (including any modification of the definition of such
term) in respect of taxes, assessments or similar charges;
(17) whether Securities of the series shall be issuable in registered
or bearer form (with or without interest coupons), or both, and any
restrictions applicable to the offering, sale, transfer or delivery of
Bearer Securities and, if other than as provided in Section 306, the terms
upon which Bearer Securities of a series may be exchanged for Securities of
the same series and vice versa;
(18) the date as of which any Bearer Securities of the series and any
temporary Global Security representing Outstanding Securities of the series
shall be dated, if other than the date of original issuance of the first
Security of the series to be issued;
(19) the forms of the Securities and interest coupons, if any, of the
series;
(20) if other than the Trustee, the identity of the Registrar and any
Paying Agent;
(21) the application, if any, of such means of defeasance or covenant
defeasance as may be specified for such Securities of that series;
(22) whether such Securities of the series are to be issued in whole
or in part in the form of one or more temporary or permanent Global
Securities, and, if so, the identity of the Depositary or its nominee, if
any, for such Global Securities, and the circumstances under which the
beneficial owners of interests in any Securities of the series in global
form may exchange such interests for certificated Securities of that
series, to be registered in the names of or to be held by such beneficial
owners or their nominees;
(23) if the Securities of the series may be issued or delivered, or
any installment of principal or interest is payable, only upon receipt of
certain certificates or other documents or satisfaction of other conditions
in addition to those specified in this Indenture, the form and terms of
such certificates, documents or conditions;
(24) if other than as provided in Section 309, the Person to whom any
interest on any Security of the series shall be payable and the manner in
which, or the Person to whom, any interest on any Bearer Securities of the
series shall be payable;
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(25) any definitions for Securities of that series which are not to
be as set forth in this Indenture, including, without limitation, the
definition of "Unrestricted Subsidiary" to be used for that series;
(26) the relative degree to which Debt Securities of the series
offered shall be senior to or be subordinated to other series of
Securities, and to other indebtedness of the Company, in right of payment,
whether such other series of Securities and other indebtedness are
outstanding or not;
(27) whether such Debt Securities are guaranteed and, if so, the
identity of the Guarantors and the terms of such Guarantees (including
whether and the extent to which the Guarantees are subordinated to the
other indebtedness of the Guarantors);
(28) the terms, if any, upon which the Company may be able to redeem
such Debt Securities prior to their maturity including the dates on which
such redemptions may be made and the price at which such redemptions may be
made;
(29) the terms, if any, upon which such Securities of any series may
be converted or exchanged into or for Common Shares, Preferred Shares or
other securities or property of the Company;
(30) any restrictions on the registration, transfer or exchange of
the Securities; and
(31) any other terms not inconsistent with the terms of the Indenture
pertaining to the Securities or which may be required by or advisable under
United States laws or regulations or advisable (as determined by the
Company) in connection with the marketing of Securities of the series.
(c) All provisions set forth in this Indenture shall be applicable to
each series of Debt Securities issued hereunder unless otherwise specified in a
supplemental indenture entered into pursuant to this Section 301, in which case
the provisions of the supplemental indenture shall govern and references herein
to "unless otherwise provided pursuant to Section 301" are not intended to limit
what provisions may be amended pursuant to any supplemental indenture. Subject
to Sections 108, 113 and any controlling provision of the Trust Indenture Act,
in the event of any inconsistency between the terms of this Indenture and the
terms applicable to a series of Securities established in the manner permitted
by this Section 301, the (i) Board Resolution, (ii) Officers' Certificate or
(iii) supplemental indenture setting forth such conflicting term shall prevail.
(d) All Securities of any one series and interest coupons, if any,
appertaining thereto shall be substantially identical except as to denomination
and except as may otherwise be
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provided (i) by a Board Resolution, (ii) by action taken pursuant to a Board
Resolution and (subject to Section 303) set forth, or determined in the manner
provided, in the related Officers' Certificate or (iii) in an 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 that series.
(e) If any of the terms of the Securities of any series are
established by action taken pursuant to a Board Resolution, a copy of such Board
Resolution shall be delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth, or providing the manner for determining,
the terms of the Securities of that series, and an appropriate record of any
action taken pursuant thereto in connection with the issuance of any Securities
of that series shall be delivered to the Trustee prior to the authentication and
delivery thereof.
(f) Unless otherwise provided pursuant to Section 301, payment of the
principal of, premium, if any, and interest on the Securities shall be made at
the office or agency of the Company maintained for that purpose as the Company
may designate pursuant to Section 301, in the United States, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made (i) by check mailed to
addresses of the Persons entitled thereto as such addresses shall appear on the
Security Register or (ii) by wire transfer in immediately available funds to an
account specified (not later than one Business Day prior to the applicable
Interest Payment Date) by the Holder thereof. If any of the Securities are held
by the Depository, payments of interest may be made by wire transfer to the
Depository. Procedures with respect to payments in connection with Bearer
Securities shall be established pursuant to Section 301.
Section 302. Denominations.
-------------
Unless otherwise provided pursuant to Section 301, the Securities shall be
issuable only in registered form without coupons and only in denominations of
$1,000 and any integral multiple of $1,000, and Bearer Securities shall be
issued in denominations of $5,000 or any integral multiple of $5,000.
Securities denominated in a foreign currency shall be issuable in such
denominations as are established with respect to such Securities in or pursuant
to this Indenture.
Section 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
Unless otherwise provided pursuant to Section 301, the Securities of any
series shall be executed on behalf of the Company by one of its Chairman of the
Board, its President or one of its Vice Presidents under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries.
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Securities and interest coupons, if any, on Securities bearing the manual
or facsimile signatures of individuals who were at any time the proper officers
of the Company shall bind the Company, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices on the date of such
Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities, together with any interest
coupons appertaining thereto, of any series executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities; and the Trustee in accordance with such Company
Order shall authenticate and deliver such Securities as provided in this
Indenture and not otherwise.
Each Security shall be dated the date of its authentication.
No Security of any series shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein duly executed by the Trustee by manual signature of an authorized
officer, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder.
Unless otherwise provided pursuant to Section 301, in case the Company or
any Guarantor, pursuant to Article Eight, shall be consolidated, merged with or
into any other Person or shall sell, assign, convey, transfer or lease
substantially all of its properties and assets to any Person, and the successor
Person resulting from such consolidation, or surviving such merger, or into
which the Company or such Guarantor shall have been merged, or the Person which
shall have received a sale, assignment, conveyance, transfer or lease as
aforesaid, shall have executed an indenture supplemental hereto with the Trustee
pursuant to Article Eight, any of the Securities authenticated or delivered
prior to such consolidation, merger, sale, assignment, conveyance, transfer or
lease may, from time to time, at the request of the successor Person, be
exchanged for other Securities executed in the name of the successor Person with
such changes in phraseology and form as may be appropriate, but otherwise in
substance of like tenor as the Securities surrendered for such exchange and of
like principal amount; and the Trustee, upon Company Request of the successor
Person, shall authenticate and deliver Securities as specified in such request
for the purpose of such exchange. If Securities shall at any time be
authenticated and delivered in any new name of a successor Person pursuant to
this Section in exchange or substitution for or upon registration of transfer of
any Securities, such successor Person, at the option of the Holders but without
expense to them, shall provide for the exchange of all Securities at the time
Outstanding for Securities authenticated and delivered in such new name.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities on behalf of the Trustee. Unless limited by the
terms of such
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appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as any Security Registrar or Paying Agent to deal with the Company
and its Affiliates.
The Bearer Securities will be transferable by delivery. Other terms,
conditions and restrictions in connection with Bearer Securities will be as
provided pursuant to Section 301.
The specific terms of the depositary arrangement with respect to any
portion of a series of Securities to be represented by a Global Security will be
as provided pursuant to Section 301.
Section 304. Temporary Securities.
--------------------
Unless otherwise provided pursuant to Section 301, pending the preparation
of definitive Securities of any series, the Company may execute, and upon
Company Order, the Trustee shall authenticate and deliver, temporary Securities
which are printed, lithographed, typewritten or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Securities
of any series in lieu of which they are issued 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.
Unless otherwise provided pursuant to Section 301, after the preparation of
definitive Securities of any series, the temporary Securities of any series
shall be exchangeable for definitive Securities of that series upon surrender of
the temporary Securities of that series at the office or agency of the Company
designated for such purpose pursuant to Section 1002, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Securities
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like principal amount of definitive Securities of authorized
denominations. Until so exchanged the temporary Securities of any series shall
in all respects be entitled to the same benefits under this Indenture as
definitive Securities of that series.
Section 305. Global Securities.
-----------------
(a) Unless otherwise provided pursuant to Section 301, any Global Security
of any series shall, if the Depositary permits, (i) be registered in the name of
the Depositary for such Global Security or the nominee of such Depositary, (ii)
be deposited with, or on behalf of, the Depositary and (iii) bear legends as set
forth in Section 202; provided, that the Securities are eligible to be in the
form of a Global Security.
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any Global Security held on their
behalf by the Depositary, or the Trustee as its custodian, or under the Global
Security, and the Depositary may be treated
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by the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or shall
impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a holder of any
Security.
The Securities of any series may also be issued in whole or in part in the
form of one or more bearer global securities (a "Bearer Global Security") that
will be deposited with a depositary, or with a nominee for such a depositary, as
provided pursuant to Section 301. Any Bearer Global Security may be issued in
temporary or permanent form. The specific terms and procedures, including the
specific terms of the depositary arrangement, with respect to any portion of a
series of Securities to be represented by one or more Bearer Global Securities
will be as provided pursuant to Section 301.
(b) Unless otherwise provided pursuant to Section 301, transfers of the
Global Security of a series shall be limited to transfers of such Global
Security in whole, but not in part, to the Depositary, its successors or their
respective nominees. Interests of beneficial owners in a Global Security may be
transferred in accordance with the rules and procedures of the Depositary.
Under the circumstances described in this clause (b) below, beneficial owners
shall obtain physical securities in the form provided pursuant to Section 301
("Physical Securities") in exchange for their beneficial interests in a Global
Security in accordance with the Depositary's and the Securities Registrar's
procedures. In connection with the execution, authentication and delivery of
such Physical Securities, the Security Registrar shall reflect on its books and
records a decrease in the principal amount of the Global Security equal to the
principal amount of such Physical Securities and the Company shall execute and
the Trustee shall authenticate and deliver one or more Physical Securities
having an equal aggregate principal amount. Unless otherwise provided pursuant
to Section 301, the Securities will be delivered in certificated form if (i) the
Depositary ceases to be registered as a clearing agency under the Exchange Act
or is not willing or no longer willing or able to provide securities depository
services with respect to the Securities and a successor depositary is not
appointed by the Company within 90 days, (ii) the Company, in its sole
discretion, so determines or (iii) there shall have occurred an Event of Default
or an event which, with the giving of notice or lapse of time or both, would
constitute an Event of Default with respect to the Securities represented by
such Global Security and such Event of Default or event continues for a period
of 90 days.
(c) In connection with any transfer of a portion of the beneficial interest
in a Global Security to a Physical Security pursuant to subsection (b) of this
Section to beneficial owners, the Security Registrar shall reflect on its books
and records the date and a decrease in the principal amount of a Global Security
in an amount equal to the principal amount of the beneficial interest in the
Global Security to be transferred, and the Company shall execute, and the
Trustee shall authenticate and deliver, one or more Physical Securities of like
tenor and amount.
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(d) In connection with the transfer of the entire Global Security of any
series to beneficial owners pursuant to subsection (b) of this Section, a Global
Security shall be deemed to be surrendered to the Trustee for cancellation, and
the Company shall execute, and the Trustee shall authenticate and deliver, to
each beneficial owner identified by the Depositary in exchange for its
beneficial interest in a Global Security, an equal aggregate principal amount of
Physical Securities of authorized denominations.
(e) The registered holder of a Global Security may grant proxies and
otherwise authorize any person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
Section 306. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
Unless otherwise provided pursuant to Section 301, the Company shall cause
to be kept at the Corporate Trust Office of the Trustee, or such other office as
the Trustee may designate, a register (the register maintained in such office
and in any other office or agency designated pursuant to Section 1002 being
herein sometimes referred to as the "Security Register") in which, subject to
such reasonable regulations as the Security Registrar may prescribe, the Company
shall provide for the registration of Securities of any series and of transfers
of Securities of any series. The Trustee or an agent thereof shall initially be
the "Security Registrar" for the purpose of registering Securities of any series
and transfers of Securities of any series as herein provided.
Procedures with respect to the registration and registration of transfer
and exchange, and other matters related thereto, with respect to Bearer
Securities shall be provided pursuant to Section 301.
Unless otherwise provided pursuant to Section 301, upon surrender for
registration of transfer of any Security of any series at the office or agency
of the Company designated pursuant to Section 1002, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities of that series of any
authorized denomination or denominations, of a like aggregate principal amount.
Furthermore, any Holder of a Global Security shall, by acceptance of such
Global Security, agree that transfers of beneficial interest in such Global
Security may be effected only through a book-entry system maintained by the
Holder of such Global Security (or its agent), and that ownership of a
beneficial interest in the Securities shall be required to be reflected in a
book entry.
Unless otherwise provided pursuant to Section 301, at the option of the
Holder, Securities of any series may be exchanged for other Securities of that
series of any authorized denomination
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or denominations, of a like aggregate principal amount, upon surrender of the
Securities of that series to be exchanged at such office or agency. Whenever any
Securities of any series are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities of that
series which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities of any series shall be the valid obligations of the Company,
evidencing the same Indebtedness, and entitled to the same benefits under this
Indenture, as the Securities of the series surrendered upon such registration of
transfer or exchange.
Unless otherwise provided pursuant to Section 301, every Security presented
or surrendered for registration of transfer, or for exchange or redemption shall
(if so required by the Company or the Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange or redemption of Securities of any series, but the Company
may require payment of a sum sufficient to pay all documentary, stamp or similar
issue or transfer taxes or other governmental charges that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Sections 303, 304, 305, 306, 307 and 906, not
involving any transfer.
Unless otherwise provided pursuant to Section 301, the Company shall not be
required (a) to issue, register the transfer of or exchange any Security of any
series during a period beginning at the opening of business (i) 15 days before
the date of selection of Securities of that series for redemption under Section
1104 and ending at the close of business on the day of such selection or (ii) 15
days before an Interest Payment Date and ending on the close of business on the
Interest Payment Date, or (b) to register the transfer of or exchange any
Security of that series so selected for redemption in whole or in part, except
the unredeemed portion of Securities of that series being redeemed in part.
Except as otherwise permitted pursuant to Section 304, any Security of a
series authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, any Global Security, whether pursuant to this
Section, Sections 304, 307, 906 or 1108 or otherwise, shall also be a Global
Security and bear the legend specified in Section 202.
Section 307. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If, (a) any mutilated Security of any series is surrendered to the Trustee,
or (b) the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security of any series, and there is delivered
to the Company, each Guarantor and the
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Trustee, such security or indemnity, in each case, as may be required by them to
save each of them harmless, then, in the absence of notice to the Company, any
Guarantor or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its written request the Trustee
shall authenticate and deliver, in exchange for any such mutilated Security or
in lieu of any such destroyed, lost or stolen Security, a replacement Security
of that series of like tenor and principal amount, bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security of any
series has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a replacement Security of that series, pay
such Security.
Upon the issuance of any replacement Securities of that series under this
Section, the Company may require the payment of a sum sufficient to pay all
documentary, stamp or similar issue or transfer taxes or other governmental
charges that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee) connected therewith.
Every replacement Security of a series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security of that series shall constitute
an original additional contractual obligation of the Company and the Guarantors,
if any, whether or not the destroyed, lost or stolen Security of that series
shall be at any time enforceable by anyone, and shall be entitled to all
benefits of this Indenture equally and proportionately with any and all other
Securities of the same series duly issued hereunder.
Procedures relating to mutilated, destroyed, lost or stolen Bearer
Securities shall be provided pursuant to Section 301.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section 308. [RESERVED]
Section 309. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Unless otherwise provided pursuant to Section 301, interest on any Security
of a series 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 that
Security of that series is registered at the close of business on the Regular
Record Date for such interest.
Unless otherwise provided pursuant to Section 301, any interest on any
Security of a series which is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date and interest on such defaulted
interest at the then applicable interest rate borne by the
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Securities of that series, to the extent lawful (such defaulted interest and
interest thereon herein collectively called "Defaulted Interest") shall
forthwith cease to be payable to the Holder on the Regular Record Date; and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Subsection (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities of that series are registered at the close
of business on a Special Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid on
each Security of that series and the date (not less than 30 days after such
notice) of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this Subsection provided.
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company in writing of such Special Record Date. In
the name and at the expense of the Company, the Trustee 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 at his
address as it appears in the Security Register, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the Securities of
that series are registered on such Special Record Date and shall no longer be
payable pursuant to the following Subsection (b).
(b) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of that series may be listed, and upon such notice as
may be required by such exchange, if, after written notice given by the Company
to the Trustee of the proposed payment pursuant to this Subsection, such payment
shall be deemed practicable by the Trustee.
Payment of interest and preservation of interest rights of Bearer
Securities shall be set forth pursuant to Section 301.
Subject to the foregoing provisions of this Section, each Security of any
series delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security of the same series shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such
other Security of the same series.
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Section 310. Persons Deemed Owners.
---------------------
Unless otherwise provided pursuant to Section 301, the Company, any
Guarantor, the Trustee and any agent of the Company, any Guarantor or the
Trustee may treat the Person in whose name any Security of any series is
registered as the owner of such Security for the purpose of receiving payment of
principal of, premium, if any, and (subject to Section 309) interest on such
Security and for all other purposes whatsoever, whether or not such Security is
overdue, and neither the Company, any Guarantor, the Trustee nor any agent of
the Company, any Guarantor or the Trustee shall be affected by notice to the
contrary.
Unless otherwise provided as contemplated by Section 301, the Company, any
Guarantor, the Trustee and any agent of the Company, any Guarantor or the
Trustee may treat the bearer of any Bearer Security of any series and the bearer
of any interest coupon as the absolute owner of such Bearer Security or interest
coupon for the purpose of receiving payment thereof or on account thereof and
for all other purposes whatsoever, whether or not such Bearer Security or
interest coupon be overdue, and neither the Company, any Guarantor, the Trustee
nor any agent of the Company, the Guarantor or the Trustee shall be affected by
notice to the contrary.
No holder of any beneficial interest in any Global Security of any series
held on its behalf by a Depositary of that series shall have any rights under
this Indenture with respect to such Global Security of that series, and such
Depositary may be treated by the Company, any Guarantor, the Trustee and any
agent of the Company, any Guarantor or the Trustee as the owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, any Guarantor, the Trustee or any agent of the
Company, any Guarantor or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
impair, as between the Depositary and such holders of beneficial interests, the
operation of customary practices governing the exercise of the rights of the
Depositary (or its nominee) as Holder of any Security of any series.
Section 311. Cancellation.
------------
All Securities of any series surrendered for payment, purchase, redemption,
registration of transfer or exchange shall be delivered to the Trustee and, if
not already canceled, shall be promptly canceled by it. The Company and any
Guarantor may at any time deliver to the Trustee for cancellation any Securities
of any series previously authenticated and delivered hereunder which the Company
or such Guarantor may have acquired in any manner whatsoever, and all Securities
of any series so delivered shall be promptly canceled by the Trustee. No
Securities of any series shall be authenticated in lieu of or in exchange for
any Securities of that series canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Securities of any series
held by the Trustee shall be destroyed and certification of their destruction
delivered to the Company unless by a Company Order the Company shall direct that
the canceled Securities of that series be returned to it. The Trustee shall
provide the Company a
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list of all Securities of the series that have been canceled from time to time
as requested by the Company.
Section 312. Computation of Interest.
-----------------------
Except as otherwise provided pursuant to Section 301, interest on the
Securities of all series shall be computed on the basis of a 360-day year of
twelve 30-day months.
Section 313. CUSIP Numbers.
-------------
The Company in issuing the Securities of any series may use "CUSIP" numbers
(if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities of that series or as contained in any notice
of a redemption and that reliance may be placed only on the other identification
numbers printed on the Securities of that series, and any such redemption shall
not be affected by any defect in or omission of such numbers.
ARTICLE FOUR
DEFEASANCE AND COVENANT DEFEASANCE
Unless otherwise provided pursuant to Section 301, Securities of any series
shall be subject to the following provisions:
Section 401. Company's Option to Effect Defeasance or Covenant
-------------------------------------------------
Defeasance.
Unless otherwise provided pursuant to Section 301, the Company may, at its
option by Board Resolution, at any time, with respect to the Securities of any
series, elect to have either Section 402 or Section 403 be applied to all of the
Outstanding Securities of any series (the "Defeased Securities"), upon
compliance with the conditions set forth below in this Article Four.
Section 402. Defeasance and Discharge.
------------------------
Unless otherwise provided pursuant to Section 301, upon the Company's
exercise under Section 401 of the option applicable to this Section 402, the
Company, each of the Guarantors, if any, and any other obligor upon the
Securities of any series, if any, shall be deemed to have been discharged from
its obligations with respect to the Defeased Securities on the date the
conditions set forth below are satisfied (hereinafter, "defeasance"). For this
purpose, such defeasance means that the Company, each of the Guarantors, if any,
and any other obligor under the Indenture shall be deemed to have paid and
discharged the entire Indebtedness represented by the Defeased Securities of
that series, which shall thereafter be deemed to be "Outstanding" only for the
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purposes of Section 405 and the other Sections of this Indenture referred to in
(a) and (b) below, and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned (and the
Trustee, at the expense of the Company, and, upon written request, shall execute
proper instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of Defeased Securities to receive, solely from the trust fund described
in Section 404 and as more fully set forth in such Section, payments in respect
of the principal of, premium, if any, and interest on such Securities when such
payments are due, (b) the Company's obligations with respect to such Defeased
Securities under Sections 304, 305, 306, 1002 and 1003, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder, including, without
limitation, the Trustee's rights under Section 606, (d) this Article Four and
(e) if the Security is convertible, the right of the Holder to convert the
Security according to the terms set forth pursuant to Section 301. Subject to
compliance with this Article Four, the Company may exercise its option under
this Section 402 notwithstanding the prior exercise of its option under Section
403 with respect to the Securities of that series.
Section 403. Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 401 of the option applicable to
this Section 403, the Company and each Guarantor shall be released from its
obligations under any covenant or provision contained or referred to in Article
Ten (except Section 1002 and 1003) or otherwise set forth in this Indenture and
expressly made subject to this Section 403 pursuant to Section 301, and the
provisions of Article Twelve and, if applicable, Article Fourteen, shall not
apply, with respect to the Defeased Securities on and after the date the
conditions set forth below are satisfied (hereinafter, "covenant defeasance"),
and the Defeased Securities shall thereafter be deemed to be not "Outstanding"
for the purposes of any direction, waiver, consent or declaration or Act of
Holders (and the consequences of any thereof) in connection with such covenants
and the provisions of Article Twelve and, if applicable, Article Fourteen, but
shall continue to be deemed "Outstanding" for all other purposes hereunder. For
this purpose, such covenant defeasance means that, with respect to the Defeased
Securities, the Company and each Guarantor 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 Article, whether directly or indirectly, by reason of any
reference elsewhere herein to any such Section or Article or by reason of any
reference in any such Section or Article to any other provision herein or in any
other document and such omission to comply shall not constitute a Default or an
Event of Default under Section 501(c), (d) or (g), but, except as specified
above, the remainder of this Indenture and such Defeased Securities shall be
unaffected thereby.
Section 404. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
Unless otherwise provided pursuant to Section 301, the following shall be
the conditions to application of either Section 402 or Section 403 to the
Defeased Securities:
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(1) The Company shall irrevocably have deposited or caused to be deposited
with the Trustee (or another trustee satisfying the requirements of Section 608
who shall agree to comply with the provisions of this Article Four applicable to
it) as trust funds in trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the benefit of
the Holders of such Securities, (a) United States dollars in an amount, or (b)
U.S. Government Obligations 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, money in an amount, or
(c) a combination thereof, sufficient, in the opinion of a nationally recognized
firm of independent public accountants or a nationally recognized investment
banking firm 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 the principal of, premium, if
any, and interest on the Defeased Securities on the Stated Maturity of such
principal or installment of principal or interest (or on the "Defeasance
Redemption Date" as defined pursuant to Section 301), if when exercising under
Section 401 either its option applicable to Section 402 or its option applicable
to Section 403, the Company shall have delivered to the Trustee an irrevocable
notice to redeem all of the Outstanding Securities of the applicable series on
the Defeasance Redemption Date); provided that the Trustee shall have been
irrevocably instructed to apply such United States dollars or the proceeds of
such U.S. Government Obligations to said payments with respect to the Securities
of that series; and provided, further, that the United States dollars or U.S.
Government Obligations deposited shall not be subject to the rights of the
holders of Senior Indebtedness or Guarantor Senior Indebtedness pursuant to the
provisions of Articles Twelve and Fourteen. For this purpose, "U.S. Government
Obligations" means securities that are (i) direct obligations of the United
States of America for the timely 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 the timely
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act), as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such 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 U.S. Government Obligation or the specific payment of principal
of or interest on the U.S. Government Obligation evidenced by such depository
receipt.
(2) In the case of an election under Section 402, the Company shall have
delivered to the Trustee an Opinion of Independent Counsel in the United States
stating that (A) the Company has received from, or there has been published by,
the Internal Revenue Service a ruling or (B) since the date of this Indenture,
there has been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such Opinion of Independent
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Counsel in the United States shall confirm that, the holders of the Outstanding
Securities 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.
(3) In the case of an election under Section 403, the Company shall have
delivered to the Trustee an Opinion of Independent Counsel in the United States
to the effect that the holders of the Outstanding Securities 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.
(4) No Default or Event of Default shall have occurred and be continuing on
the date of such deposit or insofar as subsections 501(h) and (i) are concerned,
at any time during the period ending on the 91st day after the date of deposit.
(5) Such defeasance or covenant defeasance shall not cause the Trustee for
the Securities of that series to have a conflicting interest with respect to any
securities of the Company or any Guarantor.
(6) Such defeasance or covenant defeasance shall not result in a breach or
violation of, or constitute a Default under, this Indenture or any other
material agreement or instrument to which the Company or any Guarantor is a
party or by which it is bound.
(7) The Company shall have delivered to the Trustee an Opinion of
Independent Counsel to the effect that (A) the trust funds will not be subject
to any rights of holders of Senior Indebtedness or Guarantor Senior
Indebtedness, including, without limitation, those arising under this Indenture
and (B) 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.
(8) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the holders of the Securities of that series or any Guarantee over
the other creditors of the Company or any Guarantor with the intent of
defeating, hindering, delaying or defrauding creditors of the Company, any
Guarantor or others.
(9) No event or condition shall exist that would prevent the Company from
making payments of the principal of, premium, if any, and interest on the
Securities of that series on the date of such deposit or at any time ending on
the 91st day after the date of such deposit.
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(10) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Independent Counsel, each stating that all
conditions precedent provided for relating to either the defeasance under
Section 402 or the covenant defeasance under Section 403 (as the case may be)
have been complied with as contemplated by this Section 404.
Opinions of Counsel or Opinions of Independent Counsel required to be
delivered under this Section may have qualifications customary for opinions of
the type required and counsel delivering such opinions may rely on certificates
of the Company or government or other officials customary for opinions of the
type required, including certificates certifying as to matters of fact,
including that various financial covenants have been complied with.
Section 405. Deposited Money and U.S. Government Obligations to Be Held
----------------------------------------------------------
in Trust; Other Miscellaneous Provisions.
----------------------------------------
Subject to the provisions of the last paragraph of Section 1003, all United
States dollars and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee or other qualifying trustee as permitted under
Section 404 (collectively, for purposes of this Section 405, the "Trustee")
pursuant to Section 404 in respect of the Defeased Securities shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Securities of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 404 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 the Defeased Securities.
Anything in this Article Four to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
United States dollars or U.S. Government Obligations held by it as provided in
Section 404 which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect defeasance or covenant defeasance.
Section 406. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any United States dollars
or U.S. Government Obligations in accordance with Section 402 or 403, as the
case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Company's and any Guarantor's obligations under this
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Indenture and the Securities of that series and the provisions of Articles
Twelve and Fourteen hereof shall be revived and reinstated as though no deposit
had occurred pursuant to Section 402 or 403, as the case may be, until such time
as the Trustee or Paying Agent is permitted to apply all such United States
dollars or U.S. Government Obligations in accordance with Section 402 or 403, as
the case may be; provided, however, that if the Company makes any payment to the
Trustee or Paying Agent of principal of, premium, if any, or interest on any
Security following the reinstatement of its obligations, the Trustee or Paying
Agent shall promptly pay any such amount to the Holders of the Securities of
that series and the Company shall be subrogated to the rights of the Holders of
such Securities of that series to receive such payment from the money held by
the Trustee or Paying Agent.
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
-----------------
Unless otherwise provided pursuant to Section 301, "Event of Default",
wherever used herein with respect to the Securities of any series, means any one
of the following events which has occurred and is continuing (whatever the
reason for such Event of Default and whether it shall be occasioned by the
provisions of Article Twelve or be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) there shall be a default in the payment of any interest on any Security
of that series when it becomes due and payable, and such default shall continue
for a period of 30 days;
(b) there shall be a default in the payment of the principal of (or
premium, if any, on) any Security of that series at its Maturity (upon
acceleration, optional or mandatory redemption, required repurchase or
otherwise);
(c) (i) there shall be a default in the performance, or breach, of any
covenant or agreement of the Company or any Guarantor under this Indenture
(other than a default in the performance or breach of a covenant or agreement
which is specifically dealt with in clause (a) or (b) or in clause (ii) of this
clause (c)) and such default or breach shall continue for a period of 30 days
after written notice has been given, by certified mail, (1) to the Company by
the Trustee or (2) to the Company and the Trustee by the Holders of at least 25%
in aggregate principal amount of the Outstanding Securities of the series; or
(ii) there shall be a default in the performance or breach of the provisions of
Article Eight;
(d) one or more defaults shall have occurred under any agreements,
indentures or instruments under which the Company, any Guarantor or any
Restricted Subsidiary then has
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outstanding Indebtedness in excess of $10,000,000 in the aggregate and, if not
already matured at its final maturity in accordance with its terms, such
Indebtedness shall have been accelerated;
(e) any Guarantee shall for any reason cease to be, or be asserted in
writing by any Guarantor or the Company not to be, in full force and effect, and
enforceable in accordance with its terms, except to the extent contemplated by
this Indenture and any such Guarantee;
(f) one or more judgments, orders or decrees for the payment of money in
excess of $10,000,000 either individually or in the aggregate (net of amounts
covered by insurance, bond, surety or similar instrument), shall be entered
against the Company, any Guarantor, or any Restricted Subsidiary or any of their
respective properties and shall not be discharged and either (a) any creditor
shall have commenced an enforcement proceeding upon such judgment, order or
decree or (b) there shall have been a period of 60 consecutive days during which
a stay of enforcement of such judgment or order, by reason of an appeal or
otherwise, shall not be in effect;
(g) any holder or holders of at least $10,000,000 in aggregate principal
amount of Indebtedness of the Company, any Guarantor, or any Restricted
Subsidiary after a default under such Indebtedness shall notify the Trustee of
the intended sale or disposition of any assets of the Company, any Guarantor or
any Restricted Subsidiary that have been pledged to or for the benefit of such
holder or holders to secure such Indebtedness or shall commence proceedings, or
take any action (including by way of set-off), to retain in satisfaction of such
Indebtedness or to collect on, seize, dispose of or apply in satisfaction of
Indebtedness, assets of the Company or any Restricted Subsidiary (including
funds on deposit or held pursuant to lock-box and other similar arrangements);
(h) there shall have been the entry by a court of competent jurisdiction of
(i) a decree or order for relief in respect of the Company, any Guarantor or any
Restricted Subsidiary in an involuntary case or proceeding under any applicable
Bankruptcy Law or (ii) a decree or order adjudging the Company, any Guarantor or
any Restricted Subsidiary bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company, any
Guarantor or any Restricted Subsidiary under any applicable federal or state
law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Company, any Guarantor or any
Restricted Subsidiary or of any substantial part of their respective properties,
or ordering the winding up or liquidation of their affairs, and any such decree
or order for relief shall continue to be in effect, or any such other decree or
order shall be unstayed and in effect, for a period of 60 consecutive days; or
(i) (i) the Company, any Guarantor or any Restricted Subsidiary commences
a voluntary case or proceeding under any applicable Bankruptcy Law or any other
case or proceeding to be adjudicated bankrupt or insolvent, (ii) the Company,
any Guarantor or any Restricted Subsidiary consents to the entry of a decree or
order for relief in respect of the
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Company, any Guarantor or such Restricted Subsidiary in an involuntary case or
proceeding under any applicable Bankruptcy Law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, (iii) the Company, any
Guarantor or any Restricted Subsidiary files a petition or answer or consent
seeking reorganization or relief under any applicable federal or state law, or
(iv) the Company, any Guarantor or any Restricted Subsidiary (1) consents to the
filing of such petition or the appointment of, or taking possession by, a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company, any Guarantor or such Restricted Subsidiary or
of any substantial part of its respective properties, (2) makes an assignment
for the benefit of creditors or (3) admits in writing its inability to pay its
debts generally as they become due.
Unless otherwise provided pursuant to Section 301, the Company shall
deliver to the Trustee within five business days after the occurrence thereof,
written notice, in the form of an Officers' Certificate, of any Default, its
status and what action the Company is taking or proposes to take with respect
thereto. Unless the Corporate Trust Office of the Trustee has received written
notice of an Event of Default of the nature described in this Section, the
Trustee shall not be deemed to have knowledge of such Event of Default for the
purposes of Article Five or for any other purpose.
Section 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
Unless otherwise provided pursuant to Section 301, if an Event of Default
(other than an Event of Default specified in Sections 501(h) and (i)) shall
occur and be continuing, the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Securities Outstanding of the applicable
series may, and the Trustee at the request of the Holders of not less than 25%
in aggregate principal amount of the Securities of the applicable series
Outstanding shall, declare all unpaid principal of, premium, if any, and accrued
interest on, all the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by the Holders of the Securities of that series).
Unless otherwise provided pursuant to Section 301, at any time after such
declaration of acceleration has been made but before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in aggregate principal amount of the
Securities Outstanding of the applicable series, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(a) the Company has paid or deposited with the Trustee a sum sufficient to
pay (i) all sums paid or advanced by the Trustee under this Indenture and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, (ii) all overdue interest on all Securities of any
series, (iii) the principal of and premium, if any, on any Securities of any
series which have become due otherwise than by such declaration of acceleration
and
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interest thereon at a rate borne by the Securities, and (iv) to the extent that
payment of such interest is lawful, interest upon overdue interest at the rate
borne by the Securities; and
(b) all Events of Default, other than the non-payment of principal of the
Securities of any series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent Default or impair any right
consequent thereon provided in Section 513. Provisions relating to acceleration
of the Maturity of a portion of the principal amount of an Original Issue
Discount Security upon the occurrence of an Event of Default and the
continuation thereof shall be provided pursuant to Section 301.
Section 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
-------
The Company, as to Securities of any series, and any Guarantor, as to
Securities of any series guaranteed by such Guarantor, covenant that if
(a) default is made in the payment of any interest on any such Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(b) default is made in the payment of the principal of or premium, if any,
on any such Security at the Stated Maturity thereof, the Company and, if
applicable, any such Guarantor will, upon demand of the Trustee, pay to it, for
the benefit of the Holders of such Securities, subject to Articles Twelve and,
if applicable, Article Fourteen, the whole amount then due and payable on such
Securities for principal and premium, if any, and interest, with interest upon
the overdue principal and premium, if any, and, to the extent that payment of
such interest shall be legally enforceable, upon overdue installments of
interest, at the rate borne by the Securities of that series; and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company or, if applicable, any Guarantor fails to pay such amounts
forthwith upon such demand, the Trustee, in its own name and as trustee of an
express trust, may institute a judicial proceeding for the collection of the
sums so due and unpaid and may prosecute such proceeding to judgment or final
decree, and may enforce the same against the Company or, if applicable, any
Guarantor or any other obligor upon the Securities of any series and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or, if applicable, any Guarantor or any other
obligor upon the Securities of that series, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders under this Indenture or the
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Guarantees by such appropriate private or judicial proceedings as the Trustee
shall deem most effectual to protect and enforce such rights, including, seeking
recourse against any Guarantor pursuant to the terms of any Guarantee, 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 therein, or to enforce any
other proper remedy, including, without limitation, seeking recourse against any
Guarantor pursuant to the terms of a Guarantee, or to enforce any other proper
remedy, subject however to Section 512.
Section 504. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor, including each
Guarantor, upon the Securities of any series or the property of the Company or
of such other obligor or their creditors, the Trustee (irrespective of whether
the principal of the Securities of that series shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal, and
premium, if any, and interest owing and unpaid in respect of the Securities of
that series and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(b) subject to Article Twelve and, if applicable, Article Fourteen, to
collect and receive any moneys, securities or other property payable or
deliverable upon any conversion or exchange of Securities of that series or upon
any such claims and to distribute the same; and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
of any series or the rights of any Holder thereof, or to authorize the Trustee
to vote in respect of the claim of any Holder in any such proceeding.
Section 505. Trustee May Enforce Claims without Possession of Securities.
-----------------------------------------------------------
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All rights of action and claims under this Indenture or the Securities of
any series may be prosecuted and enforced by the Trustee without the possession
of any of the Securities of that series or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name and 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 of that
series 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 or otherwise on
behalf of the Holders or the Trustee pursuant to this Article or through any
proceeding or any arrangement or restructuring in anticipation or in lieu of any
proceeding contemplated by this Article shall be applied, subject to applicable
law, 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, premium, if any,
or interest, upon presentation of the Securities of any series and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 606;
SECOND: Subject to Article Twelve and, if applicable, Article Fourteen, to
the payment of the amounts then due and unpaid upon the Securities of that
series for principal, premium, if any, and interest, in respect of which or for
the benefit of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on such
Securities for principal, premium, if any, and interest; and
THIRD: Subject to Article Twelve and, if applicable, Article Fourteen, the
balance, if any, to the Person or Persons entitled thereto, including the
Company, provided that all sums due and owing to the Holders and the Trustee
have been paid in full as required by this Indenture.
Section 507. Limitation on Suits.
-------------------
No Holder of any Securities of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default;
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(b) the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
trustee hereunder;
(c) such Holder or Holders have offered to the Trustee an indemnity
satisfactory to the Trustee against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in principal
amount of the Outstanding Securities of that series; it being understood and
intended that no one or more Holders shall have any right in any manner whatever
by virtue of, or by availing of, any provision of this Indenture or any
Guarantee to affect, disturb or prejudice the rights of any other Holders, or to
obtain or to seek to obtain priority or preference over any other Holders or to
enforce any right under this Indenture, except in the manner provided in this
Indenture or any Guarantee and for the equal and ratable benefit of all the
Holders of Securities of that series.
Section 508. Unconditional Right of Holders to Receive Principal, Premium
------------------------------------------------------------
and Interest.
------------
Notwithstanding any other provision in this Indenture, but subject to
Article Twelve and, if applicable, Article Fourteen, the Holder of any Security
of any series shall have the right on the terms stated herein, which is absolute
and unconditional, to receive payment of the principal of, premium, if any, and
(subject to Section 309) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption or
repurchase, on the Redemption Date or repurchase date) and to institute suit for
the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder, subject to Article Twelve and, if
applicable, Article Fourteen.
Section 509. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture or the Guarantees and such proceeding has
been discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Holder, then and in every such case the Company, each
of the Guarantors, the Trustee and the Holders 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.
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Section 510. Rights and Remedies Cumulative.
------------------------------
No right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Security of any
series 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,
as the case may be.
Section 512. Control by Holders.
------------------
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities of a series (or if more than one series is affected
thereby, of all series so affected, voting as a single class) 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 of that series, provided that
(a) such direction shall not be in conflict with any rule of law or with
this Indenture or any Guarantee or expose the Trustee to personal liability; and
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 513. Waiver of Past Defaults.
-----------------------
Unless otherwise provided pursuant to Section 301, the Holders of not less
than a majority in aggregate principal amount of the Outstanding Securities of
any series may on behalf of the Holders of all the Securities of that series
waive any past Default hereunder and its consequences, except a Default
(a) in the payment of the principal of, premium, if any, or interest on any
Security of any series; or
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(b) in respect of a covenant or a provision hereof which under Article Nine
cannot be modified or amended without the consent of the holder of each
Outstanding Security of that series.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security of any
series by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee of that series
for any action taken, suffered or omitted by it as Trustee of that series, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee of that series, to any suit instituted by any
Holder, or group of Holders, of that series holding in the aggregate more than
10% in principal amount of the Outstanding Securities of that series, or to any
suit instituted by any Holder for the enforcement of the payment of the
principal of, premium, if any, or interest on any Security of any series on or
after the respective Stated Maturities expressed in such Security (or, in the
case of redemption, on or after the Redemption Date).
Section 515. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
Each of the Company and any Guarantor covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury or other law wherever enacted, now or at any time
hereafter in force, which would prohibit or forgive the Company or any Guarantor
from paying all or any portion of the principal of, premium, if any, or interest
on the Securities of any series or which may affect the covenants or the
performance of this Indenture; and each of the Company and any Guarantor (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee of that series,
but will suffer and permit the execution of every such power as though no such
law had been enacted.
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ARTICLE SIX
THE TRUSTEE
Section 601. Notice of Defaults.
------------------
Within 30 days after the occurrence of any Default, the Trustee shall
transmit by mail to all Holders, as their names and addresses appear in the
Security Register, notice of such Default hereunder known to the Trustee, unless
such Default shall have been cured or waived; provided, however, that, except in
the case of a Default in the payment of the principal of, premium, if any, or
interest on any Security of any series, the Trustee shall be protected in
withholding such notice if and so long as a trust committee of Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interest of the Holders.
Section 602. Certain Rights of Trustee.
-------------------------
Subject to the provisions of Trust Indenture Act Sections 315(a) through
315(d):
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of Indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Trustees may be sufficiently evidenced by a Board Resolution;
(c) the Trustee may consult with counsel and any written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon in accordance with such advice or Opinion
of Counsel;
(d) 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 pursuant to this Indenture, unless such Holders shall have offered
to the Trustee security or indemnity satisfactory to the Trustee against the
costs, expenses and liabilities which might be incurred therein or thereby in
compliance with such request or direction;
(e) the Trustee shall not be liable for any action taken or omitted by it
in good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture other than any liabilities
arising out of the negligence of the Trustee;
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(f) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, approval,
appraisal, bond, debenture, note, coupon, security or other paper or document;
provided, that the Trustee in its discretion may make such further inquiry or
investigation into such facts or matters as it may deem fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(h) no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers;
(i) the Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company, except as
otherwise provided herein;
(j) money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law, except as otherwise provided herein;
and
(k) if a Default or an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in its exercise thereof as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
Section 603. Trustee Not Responsible for Recitals, Dispositions of
-----------------------------------------------------
Securities or Application of Proceeds Thereof.
---------------------------------------------
The recitals contained herein and in the Securities of each series, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities of any series, except that the Trustee represents
that it is duly authorized to execute and deliver this Indenture, authenticate
the Securities of any securities and perform its obligations hereunder and that
the statements made by it in any Statement of Eligibility and Qualification on
Form T-1 supplied to the Company are true and accurate subject to the
qualifications set forth therein. The Trustee shall not be accountable for the
use or application by the Company of Securities of any series or the proceeds
thereof.
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Section 604. Trustee and Agents May Hold Securities; Collections; etc.
--------------------------------------------------------
The Trustee, any Paying Agent, Security Registrar or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities, with the same rights it would have if it were not the
Trustee, Paying Agent, Security Registrar or such other agent and, subject to
Trust Indenture Act Sections 310 and 311, may otherwise deal with the Company
and receive, collect, hold and retain collections from the Company with the same
rights it would have if it were not the Trustee, Paying Agent, Security
Registrar or such other agent.
Section 605. Money Held in Trust.
-------------------
All moneys received by the Trustee shall, until used or applied as herein
provided, be held in trust for the purposes for which they were received, but
need not be segregated from other funds except to the extent required by
mandatory provisions of law. Except for funds or securities deposited with the
Trustee pursuant to Article Four, the Trustee may invest all moneys received by
the Trustee, until used or applied as herein provided, in Temporary Cash
Investments in accordance with the written directions of the Company. The
Trustee shall not be liable for any losses incurred in connection with any
investments made in accordance with this Section 605, unless the Trustee acted
with gross negligence or in bad faith. With respect to any losses on
investments made under this Section 605, the Company is liable for the full
extent of any such loss.
Section 606. Compensation and Indemnification of Trustee and Its Prior
---------------------------------------------------------
Claim.
- -----
The Company covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, such compensation for all services
rendered by it hereunder (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) set forth in a
letter agreement executed by the Company and the Trustee, as such agreement may
be amended or supplemented, and the Company covenants and agrees to pay or
reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on behalf
of it in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all agents and other persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
The Company also covenants to indemnify the Trustee and each predecessor Trustee
for, and to hold it harmless against, any loss, liability, tax, assessment or
other governmental charge (other than taxes applicable to the Trustee's
compensation hereunder) or expense incurred without negligence or bad faith on
such Trustee's part, arising out of or in connection with the acceptance or
administration of this Indenture or the trusts hereunder and such Trustee's
duties hereunder, including enforcement of this Indenture and also including any
liability which the Trustee may incur as a result of failure to withhold, pay or
report any tax, assessment or other governmental
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charge, and the costs and expenses of defending itself against or investigating
any claim of liability (whether asserted by any Holder, the Company or any other
Person) in connection with the exercise or performance of any of its powers or
duties under this Indenture. The obligations of the Company under this Section
to compensate and indemnify the Trustee and each predecessor Trustee and to pay
or reimburse the Trustee and each predecessor Trustee for expenses,
disbursements and advances shall constitute an additional obligation hereunder
and shall survive the satisfaction and discharge of this Indenture.
All payments and reimbursements pursuant to this Section 606 shall be made
with interest at the rate borne by the Securities.
As security for the performance of the obligations of the Company under
this Section 606, the Trustee shall have a Lien prior to the Securities of any
series upon all property and funds held or collected by the Trustee, except
funds held in trust for the payment of principal of (and premium, if any) or
interest on particular Securities. The Trustee's right to receive payment of
any amounts due under this Section 606 shall not be subordinate to any other
liability or indebtedness of the Company (even though the Securities of any
series may be so subordinate), and the Securities of any series shall be
subordinate to the Trustee's right to receive such payment.
Section 607. Conflicting Interests.
---------------------
The Trustee shall comply with the provisions of Section 310(b) of the Trust
Indenture Act.
Section 608. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be eligible to
act as trustee under Trust Indenture Act Section 310(a)(1) and which shall have
a combined capital and surplus of at least $250,000,000, to the extent there is
an institution eligible and willing to serve. The Trustee shall be a
participant in the Depository Trust Company and FAST distribution systems. If
such corporation publishes reports of condition at least annually, pursuant to
law or to 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 corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect hereinafter specified in this
Article. The Corporate Trust Office shall initially be located at ____________
_______________________________.
Section 609. Resignation and Removal; Appointment of Successor Trustee.
---------------------------------------------------------
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(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 under Section 610.
(b) The Trustee, or any trustee or trustees hereafter appointed, may at any
time resign by giving written notice thereof to the Company. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
trustee by written instrument executed by authority of the Board of Trustees of
the Company, a copy of which shall be delivered to the resigning Trustee and a
copy to the successor trustee. If an instrument of acceptance by a successor
trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may, or any Holder
who has been a bona fide Holder of a Security of the applicable series for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper, appoint a successor trustee.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by an Act of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of that series, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of Trust
Indenture Act Section 310(b) after written request therefor by the Company
or by any Holder who has been a bona fide Holder of a Security for at least
six months, or
(2) the Trustee shall cease to be eligible under Section 608 and shall
fail to resign after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent, or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any case, (i) the
Company by a Board Resolution may remove the Trustee, or (ii) subject to
Section 514, the Holder of any Security who has been a bona fide Holder of
a Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
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(e) If the Trustee shall be removed or become incapable of acting, or if a
vacancy shall occur in the office of Trustee for any cause, with respect to the
Securities of one or more series, the Company, by a Board Resolution, shall
promptly appoint a successor trustee with respect to the Securities of that or
those series (it being understood that any such successor Trustee may be
appointed with respect to the Securities of one or more or all 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 removal or incapability,
or the occurrence of such vacancy, a successor trustee with respect to the
Securities of any series shall be appointed by Act of the Holders of a majority
in principal amount of the Outstanding Securities of that series delivered to
the Company and the retiring Trustee, the successor trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor Trustee
with respect to the Securities of that series and to that extent supersede the
successor trustee appointed by the Company. If no successor Trustee with respect
to the Securities of that series shall have been so appointed by the Company or
the Holders of the Securities of that series and accepted appointment in the
manner hereinafter provided, the Holder of any Security of such series who has
been a bona fide Holder for at least six months may, subject to Section 514, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of that series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to the Holders of
Securities of the affected series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor trustee
and the address of its Corporate Trust Office or agent hereunder.
Section 610. Acceptance of Appointment by Successor.
--------------------------------------
In case of the appointment hereunder of a successor Trustee with respect to
all Securities, such successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee as if originally named as
Trustee hereunder; but, nevertheless, on the written request of the Company or
the successor trustee, upon payment of its charges then unpaid, such retiring
Trustee shall, pay over to the successor trustee all moneys at the time held by
it hereunder and shall execute and deliver an instrument transferring to such
successor trustee all such rights, powers, duties and obligations. Upon request
of any such successor trustee, the Company shall execute any and all instruments
for more fully and certainly vesting in and confirming to such successor trustee
all such rights and powers. Any Trustee ceasing to act shall, nevertheless,
retain a prior claim upon all property or funds held or collected by such
Trustee or such successor trustee to secure any amounts then due such Trustee
pursuant to the provisions of Section 606.
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In case of the appointment hereunder of a successor Trustee with respect to
the Securities of one or more (but not all) series, the Company, the Guarantors,
the retiring Trustee and each successor Trustee with respect to the Securities
of such one or more series shall execute and deliver an indenture supplemental
hereto wherein such successor Trustee shall accept such appointment and which
(1) shall contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, such successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company, any Guarantor or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.
Upon request of any such successor Trustee, the Company and the Guarantors
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 the first or second preceding paragraph, as the case may be.
No successor Trustee with respect to the Securities of any series shall
accept appointment as provided in this Section 610 unless at the time of such
acceptance such successor trustee shall be eligible to act as trustee under the
provisions of Trust Indenture Act Section 310(a) and this Article Sixth and
shall have a combined capital and surplus of at least $250,000,000 and have a
Corporate Trust Office or an agent selected in accordance with Section 608.
Upon acceptance of appointment by any successor Trustee with respect to the
Securities of any particular series as provided in this Section 610, the Company
shall give notice thereof to the Holders of the Securities of any series
affected, by mailing such notice to such Holders at their addresses as they
shall appear on the Security Register. If the acceptance of appointment is
substantially contemporaneous with the resignation, then the notice called for
by the preceding
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sentence may be combined with the notice called for by Section 609. If the
Company fails to give such notice within 10 days after acceptance of appointment
by the successor trustee, the successor trustee shall cause such notice to be
given at the expense of the Company.
Section 611. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be eligible under Trust Indenture Act Section
310(a) and this Article Sixth and shall have a combined capital and surplus of
at least $250,000,000 and have a Corporate Trust Office or an agent selected in
accordance with Section 608 without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities of any series shall have
been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and deliver
such Securities so authenticated; and, in case at that time any of the
Securities of that series shall not have been authenticated, any successor to
the Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor trustee; and in all such
cases such certificate shall have the full force which it is anywhere in the
Securities of any series or in this Indenture provided that the certificate of
the Trustee shall have; provided that the right to adopt the certificate of
authentication of any predecessor Trustee or to authenticate Securities of that
series in the name of any predecessor Trustee shall apply only to its successor
or successors by merger, conversion or consolidation.
Section 612. Preferential Collection of Claims Against Company.
-------------------------------------------------
If and when the Trustee shall be or become a creditor of the Company (or
other obligor under the Securities of any series), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor). A Trustee who has resigned or
been removed shall be subject to the Trust Indenture Act Section 311(a) to the
extent indicated therein.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
---------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee:
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(a) semi-annually, not more than 15 days after each Regular Record Date, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of such Regular Record Date; and
(b) at such other times as the Trustee may request in writing, within 30
days after receipt by the Company of any such request, a list of similar form
and content as of a date not more than 15 days prior to the time such list is
furnished; provided, however, that if and so long as the Trustee shall be the
Security Registrar, no such list need be furnished.
Section 702. Disclosure of Names and Addresses of Holders.
--------------------------------------------
Holders may communicate pursuant to Trust Indenture Act Section 312(b) with
other Holders with respect to their rights under this Indenture or the
Securities, and the Trustee shall comply with Trust Indenture Act Section
312(b). The Company, the Trustee, the Security Registrar and any other Person
shall have the protection of Trust Indenture Act Section 312(c). Every Holder of
Securities of any series, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any agent
of either of them shall be held accountable by reason of the disclosure of any
information as to the names and addresses of the Holders in accordance with
Trust Indenture Act Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Trust Indenture
Act Section 312.
Section 703. Reports by Trustee.
------------------
Within 60 days after May 15 of each year commencing with the first May 15
after the first issuance of Securities of each series, the Trustee shall
transmit by mail to all Holders, as their names and addresses appear in the
Security Register, as provided in Trust Indenture Act Section 313(c), a brief
report dated as of such May 15 in accordance with and to the extent required by
Trust Indenture Act Section 313(a).
Section 704. Reports by Company and Guarantors.
---------------------------------
The Company and any Guarantor shall:
(a) file with the Trustee, within 15 days after the Company or any
Guarantor, 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 from
time to time by rules and regulations prescribe) which the Company or any
Guarantor may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company or any Guarantor, as the
case may be, is not required to file information, documents or reports pursuant
to either of said Sections,
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then it shall file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with the rules
and regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company or
any Guarantor, as the case may be, with the conditions and covenants of this
Indenture as may be required from time to time by such rules and regulations;
and
(c) transmit or cause to be transmitted by mail to all Holders, as their
names and addresses appear in the Security Register, within 30 days after the
filing thereof with the Trustee, in the manner and to the extent provided in
Trust Indenture Act Section 313(c), such summaries of any information, documents
and reports required to by filed by the Company or any Guarantor, as the case
may be, pursuant to Subsections (a) and (b) of this Section as may be required
by rules and regulations prescribed from time to time by the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
Section 801. Company or Any Guarantor May Consolidate, etc., Only on
-------------------------------------------------------
Certain Terms.
-------------
Unless otherwise provided pursuant to Section 301:
(a) The Company shall not, in a single transaction or through a series of
related transactions, consolidate with or merge with or into any other Person or
sell, assign, convey, transfer or lease or otherwise dispose of all or
substantially all of its properties and assets as an entirety to any Person or
group of affiliated Persons, or permit any of its Subsidiaries to enter into any
such transaction or transactions if such transaction or transactions, in the
aggregate, would result in a sale, assignment, conveyance, transfer, lease or
disposal of all or substantially all of the properties and assets of the Company
and its Subsidiaries on a consolidated basis to any other Person or group of
affiliated Persons, unless at the time and after giving effect thereto:
(i) either (1) the Company shall be the continuing entity, or (2) the
Person (if other than the Company) formed by such consolidation or into
which the Company is merged or the Person which acquires by sale,
assignment, conveyance, transfer, lease or disposition of all or
substantially all of the properties and assets of the Company and its
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Subsidiaries on a consolidated basis (the "Surviving Entity") shall be a
Person duly organized and validly existing under the laws of the United
States of America, any state thereof or the District of Columbia and such
Person assumes, by a supplemental indenture in a form reasonably
satisfactory to the Trustee, all the obligations of the Company under the
Securities and this Indenture, and this Indenture shall remain in full
force and effect;
(ii) immediately before and immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing;
(iii) immediately after giving effect to such transaction on a pro
forma basis, the Consolidated Net Worth of the Company (or the Surviving
Entity if the Company is not the continuing obligor under this Indenture)
is equal to or greater than the Consolidated Net Worth of the Company
immediately prior to such transaction;
(iv) immediately before and immediately after giving effect to such
transaction on a pro forma basis (on the assumption that the transaction
occurred on the first day of the four-quarter period immediately prior to
the consummation of such transaction with the appropriate adjustments with
respect to the transaction being included in such pro forma calculation),
the Company (or the Surviving Entity if the Company is not the continuing
obligor under this Indenture) could incur $1.00 of additional Indebtedness
under any applicable provisions of the Indenture limiting incurrence of
indebtedness and established pursuant to Section 301;
(iv) each Guarantor, if any, unless it is the other party to the
transactions described above, shall have by supplemental indenture
confirmed that its Guarantee shall apply to such Person's obligations under
this Indenture and the Securities;
(vi) if any of the property or assets of the Company or any of its
Subsidiaries would thereupon become subject to any Lien, the provisions of
the Indenture limiting liens (established pursuant to Section 301) are
complied with; and
(vii) the Company or the Surviving Entity shall have delivered, or
caused to be delivered, to the Trustee, in form and substance reasonably
satisfactory to the Trustee, an Officers' Certificate and an Opinion of
Counsel, each to the effect that such consolidation, merger, transfer,
sale, assignment, conveyance, lease or other transaction and the
supplemental indenture in respect thereto comply with this Indenture and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
(b) If any Securities of any series are guaranteed pursuant to Article
Fourteen, each Guarantor, if any, shall not, and the Company shall not permit a
Guarantor to, in a single
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transaction or through a series of related transactions merge or consolidate
with or into any other Person (other than the Company or any other Guarantor) or
other entity, or sell, assign, convey, transfer, lease or otherwise dispose of
all or substantially all of its properties and assets on a consolidated basis to
any entity (other than the Company or any other Guarantor) unless at the time
and after giving effect thereto:
(i) either (1) such Guarantor shall be the continuing Person or (2)
the entity (if other than such Guarantor) formed by such consolidation or
into which such Guarantor is merged or the entity which acquires by sale,
assignment, conveyance, transfer, lease or disposition the properties and
assets of such Guarantor shall be a Person (other than an individual) duly
organized and validly existing under the laws of the United States, any
state thereof or the District of Columbia and shall expressly assume by an
indenture supplemental hereto, executed and delivered to the Trustee, in a
form reasonably satisfactory to the Trustee, all the obligations of such
Guarantor under its Guarantees and this Indenture;
(ii) immediately before and immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing; and
(iii) such Guarantor shall have delivered to the Trustee, in form and
substance reasonably satisfactory to the Trustee, an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
sale, assignment, conveyance, transfer, lease or disposition and such
supplemental indenture comply with this Indenture, and thereafter all
obligations of the predecessor shall terminate.
Section 802. Successor Substituted.
---------------------
Upon any consolidation or merger, or any sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the properties and
assets of the Company or any Guarantor in accordance with Section 801, the
successor Person formed by such consolidation or into which the Company or such
Guarantor, as the case may be, is merged or the successor Person to which such
sale, assignment, conveyance, transfer, lease or disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company or such Guarantor, as the case may be, under this Indenture, the
Securities of any series and/or such Guarantee, as the case may be, with the
same effect as if such successor had been named as the Company or such
Guarantor, as the case may be, herein, in the Securities of that series and/or
in such Guarantee, as the case may be. When a successor assumes all the
obligations of its predecessor under this Indenture, the Securities of any
series or a Guarantee, as the case may be, the predecessor shall be released
from those obligations; provided that in the case of a transfer by lease, the
predecessor shall not be released from the payment of principal and interest on
the Securities of any series or a Guarantee, as the case may be.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures and Agreements without Consent of
---------------------------------------------------------
Holders.
-------
Unless otherwise provided for in Section 301, without the consent of any
Holders, the Company and the Guarantors, when authorized by a Board Resolution,
and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto or agreements or other instruments with respect
to any Guarantee, in form and substance satisfactory to the Trustee, for any of
the following purposes:
(a) cause the Indenture to be qualified under the Trust Indenture Act
("TIA") or to add provisions expressly required under the TIA;
(b) evidence the succession of another Person to the Company, any
Guarantor or other obligor upon the Securities and the assumption by any such
successor of the covenants of the Company, any Guarantor or other obligor upon
the Securities under the Indenture and in the Securities of any series;
(c) add to the covenants of the Company, any Guarantor or other obligor
upon the Securities for the benefit of the Holders (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 an additional Event of Default to all or any series of Securities, or
surrender any right or power conferred upon the Company;
(d) to secure the Securities of any series thereof;
(e) to add to or change any provisions to such extent as necessary to
facilitate the issuance or administration of Securities in bearer form or to
facilitate the issuance or administration of Securities in global form;
(f) to change or eliminate any provision affecting only series of
Securities not yet issued;
(g) to establish the form or terms of Securities and Guarantee, if any, of
any series;
(h) to evidence and provide for successor Trustees or to add or change any
provisions of such Indenture to such extent as necessary to permit or facilitate
the appointment of a separate Trustee or Trustees for specific series of
Securities;
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(i) to permit payment in respect of Securities in bearer form in the United
States to the extent allowed by law;
(j) to make provision with respect to any conversion or exchange rights of
holders not adverse to the holders of any Securities of any series then
outstanding with such conversion or exchange rights which provision directly
effects any such series, including providing for the conversion or exchange of
Securities into Common Shares or Preferred Shares;
(k) cure any ambiguity, correct or supplement any provision which may be
defective or inconsistent with any other provision, or make any other provisions
with respect to matters or questions arising under the Indenture which shall not
be inconsistent with the provisions of the Indenture; provided, however, that no
such modifications or amendment may adversely affect the interest of holders of
Securities of any series then outstanding in any material respect; or
(l) to add a Guarantor pursuant to the requirements of Article Fourteen.
Section 902. Supplemental Indentures and Agreements with Consent of
------------------------------------------------------
Holders.
-------
Unless otherwise provided pursuant to Section 301, with the consent of the
Holders of not less than a majority in aggregate principal amount of the
Outstanding Securities of all series affected, by Act of said Holders delivered
to the Company, each Guarantor, and the Trustee, the Company and each Guarantor
(if a party thereto), when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto or agreements or other
instruments with respect to any Guarantee in form and substance satisfactory to
the Trustee 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 under this Indenture, the Securities or any
Guarantee; provided, however, that no such supplemental indenture, agreement or
instrument shall, without the consent of the Holder of each Outstanding Security
of all series affected thereby:
(a) change the Stated Maturity of the principal of, or any installment of
interest on, any Security, or reduce the principal amount thereof or the rate of
interest thereon or any premium payable upon the redemption thereof, or change
the coin or currency in which the principal of any Security or any premium or
the interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment after the Stated Maturity thereof (or, in the
case of redemption, on or after the Redemption Date);
(b) reduce the percentage in principal amount of the Outstanding Securities
of a series, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver or
compliance with certain provisions of this Indenture or certain defaults or with
respect to any Guarantee;
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(c) modify any of the provisions of this Section, Section 513 or Section
1009, except to increase the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such actions or to
provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Security affected thereby;
(d) except as otherwise permitted under Article Eight, consent to the
assignment or transfer by the Company or any Guarantor of any of its rights and
obligations under this Indenture; or
(e) amend or modify any of the provisions of this Indenture relating to the
subordination of the Securities or any Guarantee in any manner adverse to the
Holders of the Securities or any Guarantee.
Upon the written request of the Company and each Guarantor, accompanied by
a copy of a Board Resolution authorizing the execution of any such supplemental
indenture or Guarantee, and upon the filing with the Trustee of evidence of the
consent of Holders as aforesaid, the Trustee shall, subject to Section 903, join
with the Company and each Guarantor in the execution of such supplemental
indenture or Guarantee.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture or Guarantee
or agreement or instrument relating to any Guarantee, but it shall be sufficient
if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures and Agreements.
---------------------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture, agreement or instrument permitted by this Article or the
modifications thereby of the trusts created by this Indenture, the Trustee shall
be entitled to receive, and (subject to Trust Indenture Act Section 315(a)
through 315(d) and Section 602 hereof) shall be fully protected in relying upon,
an Opinion of Counsel and an Officers' Certificate stating that the execution of
such supplemental indenture, agreement or instrument is authorized or permitted
by this Indenture. The Trustee may, but shall not be obligated to, enter into
any such supplemental indenture, agreement or instrument which affects the
Trustee's own rights, duties or immunities under this Indenture, any Guarantee
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
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Indenture for all purposes; and every Holder of Securities of each series
theretofore or thereafter authenticated and delivered hereunder 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 each series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of each series so modified as to conform, in the
opinion of the Trustee and the Board of Trustees, to any such supplemental
indenture may be prepared and executed by the Company and each Guarantor and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities of that series.
Section 907. Effect on Senior Indebtedness.
-----------------------------
No supplemental indenture shall adversely affect the rights under Article
Twelve and, if applicable, Article Fourteen, or any definitions or provisions
related thereto, or the Guarantees of any holder of Senior Indebtedness or
Guarantor Senior Indebtedness unless the requisite holders of each issue of
Senior Indebtedness or Guarantor Senior Indebtedness affected thereby shall have
consented to such supplemental indenture.
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium and Interest.
------------------------------------------
Subject to the provisions of Article Twelve and, if applicable, Article
Fourteen, the Company will duly and punctually pay the principal of, premium, if
any, and interest on each series of the Securities in accordance with the terms
of the Securities of each series and this Indenture.
Section 1002. Maintenance of Office or Agency.
-------------------------------
Unless otherwise provided pursuant to Section 301, the Company will
maintain an office or agency where Securities of each series may be presented or
surrendered for payment. The Company also will maintain an office or agency
where Securities of each series may be
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surrendered for registration of transfer, redemption or exchange and where
notices and demands to or upon the Company in respect of the Securities of each
series and this Indenture may be served. The Company will give prompt written
notice to the Trustee of the location and any change in the location of any such
offices or agencies. If at any time the Company shall fail to maintain any such
required offices or agencies or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the office of the agent of the Trustee described above and the
Company hereby appoints such agent as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may from time to time designate one or more other offices or
agencies where the Securities of each series may be presented or surrendered for
any or all such purposes, and may from time to time rescind such designation.
The Company will give prompt written notice to the Trustee of any such
designation or rescission and any change in the location of any such office or
agency.
Procedures with respect to Bearer Securities in connection with the matters
addressed in this Section 1002 shall be set forth pursuant to Section 301.
Unless otherwise provided pursuant to Section 301, the Trustee shall
initially serve as Paying Agent.
Section 1003. Money for Security Payments to Be Held in Trust.
-----------------------------------------------
If the Company shall at any time act as its own Paying Agent, it will, on
or before each due date of the principal of, premium, if any, or interest on any
of the Securities of any series, segregate and hold in trust for the benefit of
the Holders entitled thereto a sum sufficient to pay the principal, premium, if
any, or interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided, and will promptly notify the
Trustee of its action or failure so to act.
If the Company is not acting as Paying Agent, the Company will, before each
due date of the principal of, premium, if any, or interest on any Securities of
any series, deposit with a Paying Agent or Paying Agents, as the case may be, a
sum in same day funds sufficient to pay the principal, premium, if any, or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of such
action or any failure so to act.
If the Company is not acting as Paying Agent, the Company will cause each
Paying Agent other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
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(a) hold all sums held by it for the payment of the principal of, premium,
if any, or interest on Securities of any series in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company or any Guarantor
(or any other obligor upon the Securities of any series) in the making of any
payment of principal, premium, if any, or interest;
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and disabilities of
such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor, including each
Guarantor, upon the Securities of any series or the property of the Company or
of such other obligor or their creditors, the Trustee shall serve as the Paying
Agent.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium, if any, or
interest on any Security of any series and remaining unclaimed for two years
after such principal and premium, if any, or interest has become due and payable
shall promptly be paid to the Company on Company Request, or (if then held by
the Company) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in The New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will promptly be repaid to the Company.
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Section 1004. Corporate Existence.
-------------------
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence and related rights and franchises (charter and statutory) of the
Company and each Subsidiary; provided, however, that the Company shall not be
required to preserve any such right or franchise or the corporate existence of
any such Subsidiary if the Board of Trustees of the Company shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of the Company and its Subsidiaries as a whole and that the loss thereof would
not reasonably be expected to have a material adverse effect on the ability of
the Company to perform its obligations hereunder; and provided, further,
however, that the foregoing shall not prohibit a sale, transfer or conveyance of
a Subsidiary or any of its assets in compliance with the terms of this
Indenture.
Section 1005. Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge or cause to be paid or discharged, on or
before the date the same shall become due and payable, (a) all taxes,
assessments and governmental charges levied or imposed upon the Company or any
Subsidiary shown to be due on any return of the Company or any Subsidiary or
otherwise assessed or upon the income, profits or property of the Company or any
Subsidiary if failure to pay or discharge the same could reasonably be expected
to have a material adverse effect on the ability of the Company or any
Guarantor, if any, to perform its obligations hereunder and (b) all lawful
claims for labor, materials and supplies, which, if unpaid, would by law become
a lien upon the property of the Company or any Subsidiary; provided, however,
that the Company shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings properly instituted and diligently conducted and in respect of which
appropriate reserves (in the good faith judgment of management of the Company)
are being maintained in accordance with generally accepted accounting principles
consistently applied.
Section 1006. Maintenance of Properties.
-------------------------
The Company will cause all material properties owned by the Company or any
Subsidiary or used or held for use in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order (ordinary wear and tear excepted) and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be consistent with sound business practice and 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 Company from discontinuing the maintenance of any of
such properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business or the business of any Subsidiary and
not
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reasonably expected to have a material adverse effect on the ability of the
Company to perform its obligations hereunder.
Section 1007. Insurance.
---------
The Company will at all times keep all of its and its Subsidiaries'
properties which are of an insurable nature insured with insurers, believed by
the Company to be responsible, against loss or damage to the extent that
property of similar character is usually so insured by corporations similarly
situated and owning like properties.
Section 1008. Statement by Officers as to Default.
-----------------------------------
(a) The Company will deliver to the Trustee, on or before a date not more
than 60 days after the end of each fiscal quarter and not more than 120 days
after the end of each fiscal year of the Company ending after the date hereof, a
written statement signed by two executive officers of the Company, one of whom
shall be the principal executive officer, principal financial officer or
principal accounting officer of the Company, stating whether or not, after a
review of the activities of the Company during such year or such quarter and of
the Company's performance under this Indenture, to the best knowledge, based on
such review, of the signers thereof, the Company has fulfilled all its
obligations and is in compliance with all conditions and covenants under this
Indenture throughout such year or quarter, as the case may be, and, if there has
been a Default specifying each Default and the nature and status thereof.
(b) When any Default or Event of Default has occurred and is continuing, or
if the Trustee or any Holder or the trustee for or the holder of any other
evidence of Indebtedness of the Company or any Subsidiary gives any notice or
takes any other action with respect to a claimed default (other than with
respect to Indebtedness in the principal amount of less than $10,000,000), the
Company shall deliver to the Trustee by registered or certified mail or by
telegram, telex or facsimile transmission followed by hard copy an Officers'
Certificate specifying such Default, Event of Default, notice or other action
within five Business Days of its occurrence.
Section 1009. Waiver of Certain Covenants.
---------------------------
Unless otherwise provided pursuant to Section 301, the Company or any
Guarantor may, with respect to the Securities of any series, omit in any
particular instance to comply with any term, provision or condition set forth in
any covenant provided pursuant to Sections 301 or 901 for the benefit of the
Holders of any series, if, before or after the time for such compliance, the
Holders of not less than a majority in aggregate principal amount of the
Securities of that series at the time Outstanding shall, by Act of such Holders,
waive such compliance in such instance with such covenant, but no such waiver
shall extend to or affect such covenant except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
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Company and the duties of the Trustee in respect of any such covenant shall
remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Rights of Redemption.
--------------------
Unless otherwise provided pursuant to Section 301, the Securities of each
series may be redeemed at the election of the Company, in whole or in part, at
any time as specified pursuant to Section 301, subject to the conditions, and at
the Redemption Price, specified in the form of Security of each series
(specified pursuant to Section 301), together with accrued and unpaid interest,
if any, to the Redemption Date.
Section 1102. Applicability of Article.
------------------------
Redemption of Securities of each series at the election of the Company or
otherwise, as permitted or required by any provision of this Indenture, shall be
made in accordance with such provision and this Article.
Section 1103. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities of any series pursuant
to Section 1101 shall be evidenced by a Company Order and an Officers'
Certificate. In case of any redemption at the election of the Company, the
Company shall, not less than 45 nor more than 60 days prior to the Redemption
Date fixed by the Company (unless a shorter notice period shall be satisfactory
to the Trustee), notify the Trustee in writing of such Redemption Date and of
the principal amount of Securities of that series to be redeemed.
Section 1104. Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
If less than all the Securities of any series are to be redeemed, the
particular Securities of that series or portions thereof to be redeemed shall be
selected not more than 30 days prior to the Redemption Date by the Trustee, from
the Outstanding Securities not previously called for redemption, pro rata, by
lot or such other method as the Trustee shall deem fair and reasonable, and the
amounts to be redeemed may be equal to $1,000 or any integral multiple thereof.
The Trustee shall promptly notify the Company and the Security Registrar in
writing of the Securities of each series selected for redemption and, in the
case of any Securities of that series selected for partial redemption, the
principal amount thereof to be redeemed.
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For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to redemption of Securities of any series (including
interest coupons, if any) shall relate, in the case of any Security of that
series (including interest coupons, if any) redeemed or to be redeemed only in
part, to the portion of the principal amount of such Security of that series
(including interest coupons, if any) which has been or is to be redeemed.
Section 1105. Notice of Redemption.
--------------------
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities of the affected series to be redeemed, at his address
appearing in the Security Register.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities of any series are to be
redeemed, the identification of the particular Securities of that series to be
redeemed;
(d) in the case of a Security of any series to be redeemed in part, the
principal amount of such Security to be redeemed and that after the Redemption
Date upon surrender of such Security of that series, new Security or Securities
of that series in the aggregate principal amount equal to the unredeemed portion
thereof will be issued;
(e) that Securities of any series called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price;
(f) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security or portion thereof, and that (unless the Company
shall default in payment of the Redemption Price) interest thereon shall cease
to accrue on and after said date;
(g) the place or places where such Securities are to be surrendered for
payment of the Redemption Price; and
(h) the CUSIP number, if any, relating to such Securities.
Notice of redemption of Securities of any series to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
written request, by the Trustee in the name and at the expense of the Company.
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The notice if mailed in the manner herein provided shall be conclusively
presumed to have been given, whether or not the Holder receives such notice. In
any case, failure to give such notice to any Holder of any Security of any
series designated for redemption as a whole or in part, or any defect in any
such notice, shall not affect the validity of the proceedings for the redemption
of any other Security of any series.
Section 1106. Deposit of Redemption Price.
---------------------------
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money in same day funds sufficient to pay the Redemption Price of and (except if
the Redemption Date shall be an Interest Payment Date) accrued interest on, all
the Securities or portions thereof which are to be redeemed on that date. When
the Redemption Date falls on an Interest Payment Date, payments of interest due
on such date are to be paid as provided hereunder as if no such redemption were
occurring.
Section 1107. Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the Securities of the
series so to be redeemed shall, on the Redemption Date, become due and payable
at the Redemption Price therein specified and from and after such date (unless
the Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price together with accrued interest to
the Redemption Date; provided, however, that installments of interest 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 on the relevant Regular Record Dates according to the terms and the
provisions of Section 309.
If any Security of any series called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear interest from the Redemption Date at the rate borne by such
Security.
Procedures regarding the treatment of Holders of Bearer Securities with
respect to the matters addressed in this Section 1107 shall be provided pursuant
to Section 301.
Section 1108. Securities Redeemed or Purchased in Part.
----------------------------------------
Any Security of any series which is to be redeemed or purchased only in
part shall be surrendered to the Paying Agent at the office or agency maintained
for such purpose pursuant to Section 1002 (with, if the Company, the Security
Registrar or the Trustee so requires, due endorsement by (or a written
instrument of transfer in form satisfactory to the Company, the
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Security Registrar or the Trustee duly executed by) the Holder thereof or such
Holder's attorney duly authorized in writing), and the Company shall execute,
and the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Security or Securities of that series, of any
authorized denomination as requested by such Holder in aggregate principal
amount equal to, and in exchange for, the unredeemed portion of the principal of
the Security of that series so surrendered that is not redeemed or purchased.
ARTICLE TWELVE
SUBORDINATION OF SECURITIES
Unless otherwise provided pursuant to Section 301, the following provisions
shall apply to the Securities of any series:
Section 1201. Securities Subordinate to Senior Indebtedness.
---------------------------------------------
Unless otherwise provided pursuant to Section 301, the Company covenants
and agrees, and each Holder of a Security, by his acceptance thereof, likewise
covenants and agrees, that, to the extent and in the manner hereinafter set
forth in this Article, the Indebtedness represented by the Securities and the
payment of the principal of, premium, if any, and interest on each and all of
the Securities and all other Indenture Obligations are hereby expressly made
subordinate and subject in right of payment as provided in the Indenture to the
prior payment in full, in cash or Cash Equivalents or in any other form as
acceptable to the holders of Senior Indebtedness, of all Senior Indebtedness,
whether outstanding on the date of the Indenture or thereafter incurred.
This Article Twelve shall constitute a continuing offer to all Persons who,
in reliance upon such provisions, become holders of, or continue to hold Senior
Indebtedness; and such provisions are made for the benefit of the holders of
Senior Indebtedness; and such holders are made obligees hereunder and they or
each of them may enforce such provisions.
Section 1202. Payment Over of Proceeds Upon Dissolution, etc.
----------------------------------------------
In the event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Company or to its creditors, as such, or
to its assets, or (b) any liquidation, dissolution or other winding up of the
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshaling of assets or liabilities of the Company, then and in any
such event:
(1) the holders of Senior Indebtedness shall be entitled to
receive payment in full in cash or Cash Equivalents or in any other form as
acceptable to the holders of Senior Indebtedness of all amounts due on or
in respect of all Senior Indebtedness, before
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the Holders of the Securities are entitled to receive any payment or
distribution of any kind or character (excluding Permitted Junior
Securities) on account of the principal of, premium, if any, or interest on
the Securities of any series or any other Indenture Obligations; and
(2) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities (excluding
Permitted Junior Securities), by set-off or otherwise, to which the Holders
or the Trustee would be entitled but for the provisions of this Article
shall be paid by the liquidating trustee or agent or other Person making
such payment or distribution, whether a trustee in bankruptcy, a receiver
or liquidating trustee or otherwise, directly to the holders of Senior
Indebtedness or their representative or representatives or to the trustee
or trustees under any indenture under which any instruments evidencing any
of such Senior Indebtedness may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of the Senior Indebtedness
held or represented by each, to the extent necessary to make payment in
full in cash or Cash Equivalents or in any other form as acceptable to the
Holders of Senior Indebtedness, of all Senior Indebtedness remaining
unpaid, after giving effect to any concurrent payment or distribution to
the holders of such Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions
of this Section, the Trustee or the Holder of any Security of any series
shall have received any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, in respect
of principal, premium, if any, and interest on the Securities of any series
or any other Indenture Obligations before all Senior Indebtedness is paid
in full, then and in such event such payment or distribution (excluding
Permitted Junior Securities) shall be paid over or delivered forthwith to
the trustee in bankruptcy, receiver, liquidating trustee, custodian,
assignee, agent or other person making payment or distribution of assets of
the Company for application to the payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all Senior Indebtedness in
full in cash or Cash Equivalents or in any other form as acceptable to the
Holders of Senior Indebtedness, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness.
The consolidation of the Company with, or the merger of the Company with or
into, another Person or the liquidation or dissolution of the Company following
the sale, assignment, conveyance, transfer, lease or other disposal of all or
substantially all of the Company's properties or assets to another Person upon
the terms and conditions set forth in Article Eight shall not be deemed a
dissolution, winding up, liquidation, reorganization, assignment for the benefit
of creditors or marshaling of assets and liabilities of the Company for the
purposes of this Section if the Person formed by such consolidation or the
surviving entity of such merger or the Person which acquires by sale,
assignment, conveyance, transfer, lease or other disposal of all or
substantially all of the Company's properties or assets, as the case may be,
shall, as a part of such
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consolidation, merger, sale, assignment, conveyance, transfer, lease or other
disposal, comply with the conditions set forth in Article Eight.
Section 1203. Suspension of Payment When Senior Indebtedness in Default.
---------------------------------------------------------
(a) Unless Section 1202 shall be applicable, upon the occurrence of a
Payment Default, no payment (other than any payments previously made pursuant to
the provisions described in Article Four) or distribution of any assets of the
Company of any kind or character (excluding Permitted Junior Securities) shall
be made by the Company on account of principal of, premium, if any, or interest
on, the Securities of any series or any other Indenture Obligations or on
account of the purchase, redemption, defeasance (whether under Section 402 or
403) or other acquisition of or in respect of the Securities unless and until
such Payment Default shall have been cured or waived or shall have ceased to
exist or the Designated Senior Indebtedness with respect to which such Payment
Default shall have occurred shall have been discharged or paid in full in cash
or Cash Equivalents or in any other form as acceptable to the Holders of Senior
Indebtedness, after which the Company shall resume making any and all required
payments in respect of the Securities, including any missed payments.
(b) Unless Section 1202 shall be applicable, upon (1) the occurrence of a
Non-payment Default and (2) after receipt by the Trustee and the Company from a
representative of the holder of any Designated Senior Indebtedness (a "Senior
Representative") of written notice of such occurrence, no payment (other than
any payments previously made pursuant to the provisions described in Article
Four) or distribution of any assets of the Company of any kind or character
(excluding Permitted Junior Securities) shall be made by the Company on account
of any principal of, premium, if any, or interest on, the Securities or any
other Indenture Obligations or on account of the purchase, redemption,
defeasance or other acquisition of or in respect of Securities for a period
("Payment Blockage Period") commencing on the date of receipt by the Trustee of
such notice unless and until the earliest of (subject to any blockage of
payments that may then or thereafter be in effect under subsection (a) of this
Section 1203) (x) 179 days having elapsed since receipt of such written notice
by the Trustee (provided any Designated Senior Indebtedness as to which notice
was given shall theretofore have not been accelerated), (y) the date such Non-
payment Default and all other Non-payment Defaults as to which notice is also
given after such period is initiated shall have been cured or waived or shall
have ceased to exist or the Designated Senior Indebtedness related thereto shall
have been discharged or paid in full in cash or Cash Equivalents or in any other
form as acceptable to the Holders of Designated Senior Indebtedness, or (z) the
date on which such Payment Blockage Period (and all Non-payment Defaults as to
which notice is given after such Payment Blockage Period is initiated) shall
have been terminated by written notice to the Company or the Trustee from the
representative of holders of Designated Senior Indebtedness, or the holders of
at least a majority of the Designated Senior Indebtedness, that initiated such
Payment Blockage Period, after which, in each such case, the Company shall
promptly resume making any and all required payments in respect of the
Securities, including any missed payments. Notwithstanding any other provision
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of this Indenture, in no event shall a Payment Blockage Period extend beyond 179
days from the date of the receipt by the Company or the Trustee of the notice
referred to in clause (2) of this paragraph (b) (the "Initial Blockage Period").
Any number of notices of Non-payment Defaults may be given during the Initial
Blockage Period; provided that during any 365-day consecutive period only one
Payment Blockage Period during which payment of principal of, or interest on,
the Securities may not be made may commence and the duration of the Payment
Blockage Period may not exceed 179 days. No Non-payment Default with respect to
Designated Senior Indebtedness which existed or was continuing on the date of
the commencement of any Payment Blockage Period will be, or can be, made the
basis for the commencement of a second Payment Blockage Period, whether or not
within a period of 365 consecutive days, unless such default shall have been
cured or waived for a period of not less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, then and in such event such payment shall
be paid over and delivered forthwith to a Senior Representative of the holders
of the Designated Senior Indebtedness or as a court of competent jurisdiction
shall direct.
Section 1204. Payment Permitted if No Default.
-------------------------------
Nothing contained in this Article, elsewhere in this Indenture or in any of
the Securities shall prevent the Company, at any time except during the pendency
of any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshaling of assets and
liabilities of the Company referred to in Section 1202 or under the conditions
described in Section 1203, from making payments at any time of principal of,
premium, if any, or interest on the Securities.
Section 1205. Subrogation to Rights of Holders of Senior Indebtedness.
-------------------------------------------------------
Subject to the payment in full of all Senior Indebtedness in cash or Cash
Equivalents or in any other form as acceptable to the holders of Senior
Indebtedness, the Holders of the Securities shall be subrogated to the rights of
the holders of such Senior Indebtedness to receive payments and distributions of
cash, property and securities applicable to the Senior Indebtedness until the
principal of, premium, if any, and interest on the Securities shall be paid in
full. For purposes of such subrogation, no payments or distributions to the
holders of Senior Indebtedness of any cash, property or securities to which the
Holders or the Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of this Article to the
holders of Senior Indebtedness by Holders of the Securities or the Trustee,
shall, as among the Company, its creditors other than holders of Senior
Indebtedness, and the Holders of the Securities, be deemed to be a payment or
distribution by the Company to or on account of the Senior Indebtedness.
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Section 1206. Provisions Solely to Define Relative Rights.
-------------------------------------------
The provisions of this Article are intended solely for the purpose of
defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Indebtedness on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Securities is intended to
or shall (a) impair, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of the Securities, the obligation of the
Company, which is absolute and unconditional, to pay to the Holders of the
Securities the principal of, premium, if any, and interest on the Securities as
and when the same shall become due and payable in accordance with their terms;
or (b) affect the relative rights against the Company of the Holders of the
Securities and creditors of the Company other than the holders of Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article of the holders
of Senior Indebtedness (1) in any case, proceeding, dissolution, liquidation or
other winding up, assignment for the benefit of creditors or other marshaling of
assets and liabilities of the Company referred to in Section 1202, to receive,
pursuant to and in accordance with such Section, cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder, or (2) under the
conditions specified in Section 1203, to prevent any payment prohibited by such
Section or enforce their rights pursuant to Section 1203(c).
Section 1207. Trustee to Effectuate Subordination.
-----------------------------------
Each Holder of a Security by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article and appoints the
Trustee his attorney-in-fact for any and all such purposes, including, in the
event of any dissolution, winding-up, liquidation or reorganization of the
Company whether in bankruptcy, insolvency, receivership proceedings, or
otherwise, the timely filing of a claim for the unpaid balance of the
Indebtedness of the Company owing to such Holder in the form required in such
proceedings and the causing of such claim to be approved.
Section 1208. No Waiver of Subordination Provisions.
-------------------------------------
(a) No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act by any such holder, or by any non-compliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
(b) Without limiting the generality of Subsection (a) of this Section and
notwithstanding any other provision contained herein, the holders of Senior
Indebtedness may, at
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any time and from time to time, without the consent of or notice to the Trustee
or the Holders of the Securities, without incurring responsibility to the
Holders of the Securities and without impairing or releasing the subordination
provided in this Article or the obligations hereunder of the Holders of the
Securities to the holders of Senior Indebtedness, do any one or more of the
following: (1) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior Indebtedness is
outstanding; (2) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (3) release any
Person liable in any manner for the collection or payment of Senior
Indebtedness; and (4) exercise or refrain from exercising any rights against the
Company and any other Person; provided, however, that in no event shall any such
actions limit the right of the Holders of the Securities to take any action to
accelerate the maturity of the Securities in accordance with the provisions set
forth in Article Five or to pursue any rights or remedies under this Indenture
or under applicable laws if the taking of such action does not otherwise violate
the terms of this Article.
Section 1209. Notice to Trustee.
-----------------
(a) The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Securities or other Indenture Obligations.
Notwithstanding the provisions of this Article or any provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee in
respect of the Securities, unless and until the Trustee shall have received
written notice thereof from the Company or a holder of Senior Indebtedness or
from a Senior Representative or any trustee, fiduciary or agent therefor; and,
prior to the receipt of any such written notice, the Trustee shall be entitled
in all respects to assume that no such facts exist; provided, however, that if
the Trustee shall not have received the notice provided for in this Section
prior to the date upon which by the terms hereof any money may become payable
for any purpose (including, without limitation, the payment of the principal of,
premium, if any, or interest on any Security or other Indenture Obligations),
then, anything herein contained to the contrary notwithstanding but without
limiting the rights and remedies of the holders of Senior Indebtedness or any
trustee, fiduciary or agent thereof, the Trustee shall have full power and
authority to receive such money and to apply the same to the purpose for which
such money was received and shall not be affected by any notice to the contrary
which may be received by it after such date; nor shall the Trustee be charged
with knowledge of the curing of any such default or the elimination of the act
or condition preventing any such payment unless and until the Trustee shall have
received an Officers' Certificate to such effect.
(b) The Trustee shall be entitled to rely on the delivery to it of a
written notice to the Trustee and the Company by a Person representing himself
to be a Senior Representative or a holder of Senior Indebtedness (or a trustee,
fiduciary or agent therefor) to establish that such
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notice has been given by a Senior Representative or a holder of Senior
Indebtedness (or a trustee, fiduciary or agent therefor); provided, however,
that failure to give such notice to the Company shall not affect in any way the
ability of the Trustee to rely on such notice. In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Section 1210. Reliance on Judicial Order or Certificate of Liquidating
--------------------------------------------------------
Agent.
-----
Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee and the Holders of the Securities shall be entitled to
rely upon any order or decree entered by any court of competent jurisdiction in
which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article, provided that the foregoing shall apply only if such court has
been fully apprised of the provisions of this Article.
Section 1211. Rights of Trustee as a Holder of Senior Indebtedness;
-----------------------------------------------------
Preservation of Trustee's Rights.
--------------------------------
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article with respect to any Senior Indebtedness which may at
any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder. Nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 606.
Section 1212. Article Applicable to Paying Agents.
-----------------------------------
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting under this Indenture, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such
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Paying Agent were named in this Article in addition to or in place of the
Trustee; provided, however, that Section 1211 shall not apply to the Company or
any Affiliate of the Company if it or such Affiliate acts as Paying Agent.
Section 1213. No Suspension of Remedies.
-------------------------
Nothing contained in this Article shall limit the right of the Trustee or
the Holders of Securities to take any action to accelerate the maturity of the
Securities pursuant to Article Five and as set forth in this Indenture or to
pursue any rights or remedies hereunder or under applicable law, subject to the
rights, if any, under this Article of the holders, from time to time, of Senior
Indebtedness to receive the cash, property or securities receivable upon the
exercise of such rights or remedies.
Section 1214. Trustee's Relation to Senior Indebtedness.
-----------------------------------------
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article, and no implied covenants or obligations
with respect to the holders of Senior Indebtedness shall be read into this
Article against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness and the Trustee shall not
be liable to any holder of Senior Indebtedness if it shall mistakenly in the
absence of gross negligence or willful misconduct pay over or deliver to
Holders, the Company or any other Person moneys or assets to which any holder of
Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE
Section 1301. Satisfaction and Discharge of Indenture.
---------------------------------------
Unless otherwise provided pursuant to Section 301, this Indenture shall
cease to be of further effect (except as to surviving rights of registration of
transfer or exchange of Securities herein, rights to payment, rights to
conversion, and rights to replacement of stolen, lost or mutilated Securities
expressly provided for) and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(a) either
(1) all the Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 308 or (ii) all
Securities for whose payment United States dollars
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have theretofore been deposited in trust or segregated and held in trust by
the Company and thereafter repaid to the Company or discharged from such
trust, as provided in Section 1003) have been delivered to the Trustee for
cancellation; or
(2) all such Securities not theretofore delivered to the Trustee for
cancellation (x) have become due and payable, (y) will become due and
payable at their Stated Maturity within one year, or (z) are to be called
for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name,
and at the expense, of the Company, and the Company or any Guarantor, in
the case of (2)(x),(y) or (z) above, has irrevocably deposited or caused to
be deposited with the Trustee as trust funds in trust for the purpose an
amount in United States dollars sufficient to pay and discharge the entire
Indebtedness on the Securities not theretofore delivered to the Trustee for
cancellation, for the principal of, premium, if any, and accrued interest
at such Stated Maturity or Redemption Date;
(b) the Company or any Guarantor has paid or caused to be paid all other
sums payable hereunder by the Company or any Guarantor; and
(c) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel stating that (i) all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture have been
complied with and (ii) such satisfaction and discharge will not result in a
breach or violation of or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company or any Guarantor is
a party or by which the Company or any Guarantor is bound.
Opinions of Counsel required to be delivered under this Section may have
qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of the Company or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that various
financial covenants have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 606 and, if United
States dollars shall have been deposited with the Trustee pursuant to subclause
(2) of Subsection (a) of this Section, the obligations of the Trustee under
Section 1302 and the last paragraph of Section 1003 shall survive.
Section 1302. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 1003, all United
States dollars deposited with the Trustee pursuant to Section 1301 shall be held
in trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either
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directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal of, premium, if any, and interest on the Securities for whose
payment such United States dollars have been deposited with the Trustee.
ARTICLE FOURTEEN
GUARANTEE
If, pursuant to Section 301, the Securities of any series are to be
guaranteed by any Guarantor, the following provisions, unless otherwise provided
pursuant to Section 301, shall apply. In this Article Fourteen, unless the
context otherwise requires, all references to Securities refers to the series of
Securities guaranteed by the Guarantors and all references to Indenture
Obligations refer to Indenture Obligations in respect of the series of
Securities so guaranteed. If no series of Securities are guaranteed, this
Article Fourteen and all references to Guarantees and Guarantors in this
Indenture shall have no force and effect.
Section 1401. Guarantors' Guarantee.
---------------------
For value received, each of the Guarantors, in accordance with this Article
Fourteen, hereby absolutely, unconditionally and irrevocably guarantees, jointly
and severally, to the Trustee and the Holders, as if the Guarantors were the
principal debtor, the punctual payment and performance when due of all Indenture
Obligations (which for purposes of this Guarantee shall also be deemed to
include all commissions, fees, charges, costs and other expenses (including
reasonable legal fees and disbursements of one counsel in connection with any
one action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances) arising out of or
incurred by the Trustee or the Holders in connection with the enforcement of
this Guarantee).
Section 1402. Continuing Guarantee; No Right of Set-Off; Independent
------------------------------------------------------
Obligation.
----------
(a) This Guarantee shall be a continuing guarantee of the payment and
performance of all Indenture Obligations and shall remain in full force and
effect until the payment in full of all of the Indenture Obligations and shall
apply to and secure any ultimate balance due or remaining unpaid to the Trustee
or the Holders; and this Guarantee shall not be considered as wholly or
partially satisfied by the payment or liquidation at any time or from time to
time of any sum of money for the time being due or remaining unpaid to the
Trustee or the Holders. Each Guarantor, jointly and severally, covenants and
agrees to comply with all obligations, covenants, agreements and provisions
applicable to it in this Indenture including those set forth in Article Eight.
Without limiting the generality of the foregoing, each of the Guarantors'
liability shall extend to all amounts which constitute part of the Indenture
Obligations and would be owed by the Company under this Indenture and the
Securities but for the fact that they are unenforceable,
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reduced, limited, impaired, suspended or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Company.
(b) Each Guarantor, jointly and severally, hereby guarantees that the
Indenture Obligations will be paid to the Trustee without set-off or
counterclaim or other reduction whatsoever (whether for taxes, withholding or
otherwise) in lawful currency of the United States of America.
(c) Each Guarantor, jointly and severally, guarantees that the Indenture
Obligations shall be paid strictly in accordance with their terms regardless of
any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the holders of the Securities.
(d) Each Guarantor's liability under this Guarantee to pay or perform or
cause the performance of the Indenture Obligations shall arise forthwith after
demand for payment or performance by the Trustee has been given to the
Guarantors in the manner prescribed in Section 106 hereof.
(e) Except as provided herein, the provisions of this Article Fourteen
cover all agreements between the parties hereto relative to this Guarantee and
none of the parties shall be bound by any representation, warranty or promise
made by any Person relative thereto which is not embodied herein; and it is
specifically acknowledged and agreed that this Guarantee has been delivered by
each Guarantor free of any conditions whatsoever and that no representations,
warranties or promises have been made to any Guarantor affecting its liabilities
hereunder, and that the Trustee shall not be bound by any representations,
warranties or promises now or at any time hereafter made by the Company to any
Guarantor.
Section 1403. Guarantee Absolute.
------------------
The obligations of the Guarantors hereunder are independent of the
obligations of the Company under the Securities and this Indenture and a
separate action or actions may be brought and prosecuted against any Guarantor
whether or not an action or proceeding is brought against the Company and
whether or not the Company is joined in any such action or proceeding. The
liability of the Guarantors hereunder is irrevocable, absolute and unconditional
and (to the extent permitted by law) the liability and obligations of the
Guarantors hereunder shall not be released, discharged, mitigated, waived,
impaired or affected in whole or in part by:
(a) any defect or lack of validity or enforceability in respect of any
Indebtedness or other obligation of the Company or any other Person under this
Indenture or the Securities, or any agreement or instrument relating to any of
the foregoing;
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(b) any grants of time, renewals, extensions, indulgences, releases,
discharges or modifications which the Trustee or the Holders may extend to, or
make with, the Company, any Guarantor or any other Person, or any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Indenture Obligations, or any other amendment or waiver of, or any consent to or
departure from, this Indenture or the Securities, including any increase or
decrease in the Indenture Obligations;
(c) the taking of security from the Company, any Guarantor or any other
Person, and the release, discharge or alteration of, or other dealing with, such
security;
(d) the occurrence of any change in the laws, rules, regulations or
ordinances of any jurisdiction by any present or future action of any
governmental authority or court amending, varying, reducing or otherwise
affecting, or purporting to amend, vary, reduce or otherwise affect, any of the
Indenture Obligations and the obligations of any Guarantor hereunder;
(e) the abstention from taking security from the Company, any Guarantor or
any other Person or from perfecting, continuing to keep perfected or taking
advantage of any security;
(f) any loss, diminution of value or lack of enforceability of any security
received from the Company, any Guarantor or any other Person, and including any
other guarantees received by the Trustee;
(g) any other dealings with the Company, any Guarantor or any other Person,
or with any security;
(h) the Trustee's or the Holders' acceptance of compositions from the
Company or any Guarantor;
(i) the application by the Holders or the Trustee of all monies at any time
and from time to time received from the Company, any Guarantor or any other
Person on account of any indebtedness and liabilities owing by the Company or
any Guarantor to the Trustee or the Holders, in such manner as the Trustee or
the Holders deems best and the changing of such application in whole or in part
and at any time or from time to time, or any manner of application of
collateral, if any, or proceeds thereof, to all or any of the Indenture
Obligations, or the manner of sale of any such collateral;
(j) the release or discharge of the Company or any Guarantor of the
Securities or of any Person liable directly as surety or otherwise by operation
of law or otherwise for the Securities, other than an express release in writing
given by the Trustee, on behalf of the Holders, of the liability and obligations
of any Guarantor hereunder;
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(k) any change in the name, business, capital structure or governing
instrument of the Company or any Guarantor or any refinancing or restructuring
of any of the Indenture Obligations;
(l) the sale of the Company's or any Guarantor's business or any part
thereof;
(m) subject to Section 1414, any merger or consolidation, arrangement or
reorganization of the Company, any Guarantor, any Person resulting from the
merger or consolidation of the Company or any Guarantor with any other Person or
any other successor to such Person or merged or consolidated Person or any other
change in the corporate existence, structure or ownership of the Company or any
Guarantor;
(n) the insolvency, bankruptcy, liquidation, winding-up, dissolution,
receivership or distribution of the assets of the Company or its assets or any
resulting discharge of any obligations of the Company (whether voluntary or
involuntary) or of any Guarantor or the loss of corporate existence;
(o) subject to Section 1414, any arrangement or plan of reorganization
affecting the Company or any Guarantor;
(p) any other circumstance (including any statute of limitations) that
might otherwise constitute a defense available to, or discharge of, the Company
or any Guarantor; or
(q) any modification, compromise, settlement or release by the Trustee, or
by operation of law or otherwise, of the Indenture Obligations or the liability
of the Company or any other obligor under the Securities, in whole or in part,
and any refusal of payment by the Trustee, in whole or in part, from any other
obligor or other guarantor in connection with any of the Indenture Obligations,
whether or not with notice to, or further assent by, or any reservation of
rights against, each of the Guarantors.
Section 1404. Right to Demand Full Performance.
--------------------------------
In the event of any demand for payment or performance by the Trustee from
any Guarantor hereunder, the Trustee or the Holders shall have the right to
demand its full claim and to receive all dividends or other payments in respect
thereof until the Indenture Obligations have been paid in full, and the
Guarantors shall continue to be jointly and severally liable hereunder for any
balance which may be owing to the Trustee or the Holders by the Company under
this Indenture and the Securities. The retention by the Trustee or the Holders
of any security, prior to the realization by the Trustee or the Holders of its
rights to such security upon foreclosure thereon, shall not, as between the
Trustee and any Guarantor, be considered as a purchase of such security, or as
payment, satisfaction or reduction of the Indenture Obligations due to the
Trustee or the Holders by the Company or any part thereof.
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Section 1405. Waivers.
-------
(a) Each Guarantor hereby expressly waives (to the extent permitted by
law) notice of the acceptance of this Guarantee and notice of the existence,
renewal, extension or the non-performance, non-payment, or non-observance on the
part of the Company of any of the terms, covenants, conditions and provisions of
this Indenture or the Securities or any other notice whatsoever to or upon the
Company or such Guarantor with respect to the Indenture Obligations. Each
Guarantor hereby acknowledges communication to it of the terms of this Indenture
and the Securities and all of the provisions therein contained and consents to
and approves the same. Each Guarantor hereby expressly waives (to the extent
permitted by law) diligence, presentment, protest and demand for payment.
(b) Without prejudice to any of the rights or recourses which the Trustee
or the Holders may have against the Company, each Guarantor hereby expressly
waives (to the extent permitted by law) any right to require the Trustee or the
Holders to:
(i) initiate or exhaust any rights, remedies or recourse against the
Company, any Guarantor or any other Person;
(ii) value, realize upon, or dispose of any security of the Company or
any other Person held by the Trustee or the Holders; or
(iii) initiate or exhaust any other remedy which the Trustee or the
Holders may have in law or equity; before requiring or becoming entitled to
demand payment from such Guarantor under this Guarantee.
(c) With respect to this Section 1405, to the extent applicable to any
Guarantor, each Guarantor expressly waives application of Sections 26-7
through 26-9 of the North Carolina General Statutes.
Section 1406. The Guarantors Remain Obligated in Event the Company Is No
----------------------------------------------------------
Longer Obligated to Discharge Indenture Obligations.
---------------------------------------------------
It is the express intention of the Trustee and the Guarantors that if for
any reason the Company has no legal existence, is or becomes under no legal
obligation to discharge the Indenture Obligations owing to the Trustee or the
Holders by the Company or if any of the Indenture Obligations owing by the
Company to the Trustee or the Holders becomes irrecoverable from the Company by
operation of law or for any reason whatsoever, this Guarantee and the covenants,
agreements and obligations of the Guarantors contained in this Article Fourteen
shall nevertheless be binding upon the Guarantors, as principal debtor, until
such time as all such Indenture Obligations have been paid in full to the
Trustee and all such Indenture Obligations owing to the Trustee or the Holders
by the Company have been
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discharged, or such earlier time as Section 402 shall apply to the Securities
and the Guarantors shall be responsible for the payment thereof to the Trustee
or the Holders upon demand.
Section 1407. Fraudulent Conveyance; Contribution Subrogation.
-----------------------------------------------
(a) Each Guarantor that is a Subsidiary of the Company, and by its
acceptance hereof each Holder, hereby confirms that it is the intention of all
such parties that the Guarantee by such Guarantor pursuant to its Guarantee not
constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar federal or state law. To effectuate the foregoing intention, the
Holders and such Guarantor hereby irrevocably agree that the obligations of such
Guarantor under its Guarantee shall be limited to the maximum amount which,
after giving effect to all other contingent and fixed liabilities of such
Guarantor, and after giving effect to any collections from or payments made by
or on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Guarantee or pursuant to its contribution obligations under
this Indenture, will result in the obligations of such Guarantor under its
Guarantee not constituting such fraudulent transfer or conveyance.
(b) Each Guarantor that makes a payment or distribution under its Guarantee
shall be entitled to a contribution from each other Guarantor, if any, in a pro
rata amount based on the net assets of each Guarantor, determined in accordance
with GAAP.
(c) Each Guarantor hereby waives all rights of subrogation or contribution,
whether arising by contract or operation of law (including, without limitation,
any such right arising under federal bankruptcy law) or otherwise by reason of
any payment by it pursuant to the provisions of this Article Fourteen.
Section 1408. Guarantee Is in Addition to Other Security.
------------------------------------------
This Guarantee shall be in addition to and not in substitution for any
other guarantees or other security which the Trustee may now or hereafter hold
in respect of the Indenture Obligations owing to the Trustee or the Holders by
the Company and (except as may be required by law) the Trustee shall be under no
obligation to marshal in favor of each of the Guarantors any other guarantees or
other security or any moneys or other assets which the Trustee may be entitled
to receive or upon which the Trustee or the Holders may have a claim.
Section 1409. Release of Security Interests.
-----------------------------
Without limiting the generality of the foregoing and except as otherwise
provided in this Indenture, each Guarantor hereby consents and agrees, to the
fullest extent permitted by applicable law, that the rights of the Trustee
hereunder, and the liability of the Guarantors hereunder, shall not be affected
by any and all releases for any purpose of any collateral, if any,
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from the Liens and security interests created by any collateral document and
that this Guarantee shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Indenture Obligations is
rescinded or must otherwise be returned by the Trustee upon the insolvency,
bankruptcy or reorganization of the Company or otherwise, all as though such
payment had not been made.
Section 1410. No Bar to Further Actions.
-------------------------
Except as provided by law, no action or proceeding brought or instituted
under Article Fourteen and this Guarantee and no recovery or judgment in
pursuance thereof shall be a bar or defense to any further action or proceeding
which may be brought under Article Fourteen and this Guarantee by reason of any
further default or defaults under Article Fourteen and this Guarantee or in the
payment of any of the Indenture Obligations owing by the Company.
Section 1411. Failure to Exercise Rights Shall Not Operate as a Waiver; No
------------------------------------------------------------
Suspension of Remedies.
----------------------
(a) No failure to exercise and no delay in exercising, on the part of the
Trustee or the Holders, any right, power, privilege or remedy under this Article
Fourteen and this Guarantee shall operate as a waiver thereof, nor shall any
single or partial exercise of any rights, power, privilege or remedy preclude
any other or further exercise thereof, or the exercise of any other rights,
powers, privileges or remedies. The rights and remedies herein provided for are
cumulative and not exclusive of any rights or remedies provided in law or
equity.
(b) Nothing contained in this Article Fourteen shall limit the right of the
Trustee or the Holders to take any action to accelerate the maturity of the
Securities pursuant to Article Five or to pursue any rights or remedies
hereunder or under applicable law.
Section 1412. Trustee's Duties; Notice to Trustee.
-----------------------------------
(a) Any provision in this Article Fourteen or elsewhere in this Indenture
allowing the Trustee to request any information or to take any action authorized
by, or on behalf of any Guarantor, shall be permissive and shall not be
obligatory on the Trustee except as the Holders may direct in accordance with
the provisions of this Indenture or where the failure of the Trustee to request
any such information or to take any such action arises from the Trustee's
negligence, bad faith or willful misconduct.
(b) The Trustee shall not be required to inquire into the existence, powers
or capacities of the Company, any Guarantor or the officers, Trustees or agents
acting or purporting to act on their respective behalf.
Section 1413. Successors and Assigns.
----------------------
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All terms, agreements and conditions of this Article Fourteen shall extend
to and be binding upon each Guarantor and its successors and permitted assigns
and shall enure to the benefit of and may be enforced by the Trustee and its
successors and assigns; provided, however, that the Guarantors may not assign
any of their rights or obligations hereunder other than in accordance with
Article Eight.
Section 1414. Release of Guarantee.
--------------------
Concurrently with the payment in full of all of the Indenture Obligations,
the Guarantors shall be released from and relieved of their obligations under
this Article Fourteen. Upon the delivery by the Company to the Trustee of an
Officer's Certificate and, if requested by the Trustee, an Opinion of Counsel to
the effect that the transaction giving rise to the release of this Guarantee was
made by the Company in accordance with the provisions of this Indenture and the
Securities, the Trustee shall execute any documents reasonably required in order
to evidence the release of the Guarantors from their obligations under this
Guarantee. If any of the Indenture Obligations are revived and reinstated after
the termination of this Guarantee, then all of the obligations of the Guarantors
under this Guarantee shall be revived and reinstated as if this Guarantee had
not been terminated until such time as the Indenture Obligations are paid in
full, and each Guarantor shall enter into an amendment to this Guarantee,
reasonably satisfactory to the Trustee, evidencing such revival and
reinstatement.
This Guarantee shall terminate with respect to each Guarantor and shall be
automatically and unconditionally released and discharged under any
circumstances set forth pursuant to Section 301.
Section 1415. Execution of Guarantee.
----------------------
To evidence the Guarantee, each Guarantor hereby agrees to execute the
guarantee substantially in the form set forth in Section 204, to be endorsed on
each Security authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of each Guarantor by its General Partner (by an
authorized officer), Chairman of the Board, its President, or one of its Vice
Presidents and attested by its Secretary or one of its Assistant Secretaries.
The signature of any of these officers on the Securities may be manual or
facsimile.
Section 1416. Guarantee Subordinate to Guarantor Senior Indebtedness.
------------------------------------------------------
Each Guarantor covenants and agrees, and each Holder of a Guarantee, by his
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article, the Indebtedness represented
by the Guarantees is hereby made subordinate and subject in right of payment as
provided in this Article to the prior payment in full in cash or Cash
Equivalents or in any other form as acceptable to the holders of Guarantor
Senior Indebtedness of all Guarantor Senior Indebtedness; provided, however,
that the Indebtedness represented by this
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Guarantee in all respects shall rank equally with, or prior to, all existing and
future Indebtedness of such Guarantor that is expressly subordinated to such
Guarantor's Guarantor Senior Indebtedness.
This Article Fourteen shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold
Guarantor Senior Indebtedness; and such provisions are made for the benefit of
the holders of Guarantor Senior Indebtedness; and such holders are made obligees
hereunder and they or each of them may enforce such provisions.
With respect to the relative rights of Holders and holders of Senior
Indebtedness and Guarantor Senior Indebtedness and for the purpose of Section
1407(a), each Holder of a Security by his acceptance thereof acknowledges that
all Senior Indebtedness and any guarantee by a Guarantor of such Senior
Indebtedness shall be deemed to have been incurred prior to the incurrence by
such Guarantor of its liability under its Guarantee.
Section 1417. Payment Over of Proceeds Upon Dissolution of the Guarantor,
-----------------------------------------------------------
etc.
- ---
In the event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to any Guarantor or to its creditors, as such, or
to its assets, or (b) any liquidation, dissolution or other winding up of any
Guarantor, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshaling of assets or liabilities of any Guarantor, then and in any
such event:
(1) the holders of Guarantor Senior Indebtedness shall be entitled to
receive payment in full in cash or Cash Equivalents or in any other form as
acceptable to the holders of Guarantor Senior Indebtedness of all amounts due on
or in respect of all Guarantor Senior Indebtedness, before the Holders of the
Securities are entitled to receive any payment or distribution of any kind or
character (excluding Permitted Guarantor Junior Securities) on account of the
Guarantee of such Guarantor; and
(2) any payment or distribution of assets of any Guarantor of any kind or
character, whether in cash, property or securities (excluding Permitted
Guarantor Junior Securities), by set-off or otherwise, to which the Holders or
the Trustee would be entitled but for the provisions of this Article shall be
paid by the liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or otherwise, directly to the holders of Guarantor Senior Indebtedness or their
representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Guarantor Senior
Indebtedness may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the Guarantor Senior Indebtedness held or
represented by each, to the extent necessary to make payment in full in cash or
Cash
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<PAGE>
Equivalents or in any other form as acceptable to the holders of Guarantor
Senior Indebtedness of all Guarantor Senior Indebtedness remaining unpaid, after
giving effect to any concurrent payment or distribution to the holders of such
Guarantor Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of any Guarantor of any kind or character,
whether in cash, property or securities, in respect of the Guarantee of such
Guarantor before all Guarantor Senior indebtedness is paid in full, then and in
such event such payment or distribution (excluding Permitted Guarantor Junior
Securities) shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other
person making payment or distribution of assets of such Guarantor for
application to the payment of all Guarantor Senior Indebtedness remaining
unpaid, to the extent necessary to pay all Guarantor Senior Indebtedness in full
in cash or Cash Equivalents or in any other form as acceptable to the holders of
Guarantor Senior Indebtedness after giving effect to any concurrent payment or
distribution to or for the holders of Guarantor Senior Indebtedness.
The consolidation of any Guarantor with, or the merger of any Guarantor
with or into, another Person or the liquidation or dissolution of any Guarantor
following the sale, assignment, conveyance, transfer, lease or other disposal of
all or substantially all of such Guarantor's properties or assets to another
Person upon the terms and conditions set forth in Article Eight shall not be
deemed a dissolution, winding up, liquidation, reorganization, assignment for
the benefit of creditors or marshaling of assets and liabilities of such
Guarantor for the purposes of this Section if the Person formed by such
consolidation or the surviving entity of such merger or the Person which
acquires by sale, assignment, conveyance, transfer, lease or other disposal of
all or substantially all of such Guarantor's properties and assets, as the case
may be, shall, as a part of such consolidation, merger, sale, assignment,
conveyance, transfer, lease or other disposal comply with the conditions set
forth in Article Eight.
Section 1418. Default on Guarantor Senior Indebtedness.
----------------------------------------
(a) Upon the maturity of any Guarantor Senior Indebtedness by lapse of
time, acceleration or otherwise, all principal thereof and interest thereon and
other amounts due in connection therewith shall first be paid in full or such
payment duly provided for before any payment is made by any of the Guarantors or
any Person acting on behalf of any of the Guarantors in respect of the Guarantee
of such Guarantor.
(b) No payment (excluding payments in the form of Permitted Guarantor
Junior Securities) shall be made by any Guarantor in respect of its Guarantee
during the period in which Section 1417 shall be applicable, during any
suspension of payments in effect under Section 1203(a) of this Indenture or
during any Payment Blockage Period in effect under Section 1203(b) of this
Indenture.
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(c) In the event that, notwithstanding the foregoing, any Guarantor shall
make any payment to the Trustee or the Holder of its Guarantee prohibited by the
foregoing provisions of this Section, then and in such event such payment shall
be paid over and delivered forthwith to the representatives of Guarantor Senior
Indebtedness or as a court of competent jurisdiction shall direct.
Section 1419. Payment Permitted by Each of the Guarantors if No Default.
---------------------------------------------------------
Nothing contained in this Article, elsewhere in this Indenture or in any of
the Securities shall prevent any Guarantor, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshaling of assets and
liabilities of such Guarantor referred to in Section 1417 or under the
conditions described in Section 1418, from making payments at any time of
principal of, premium, if any, or interest on the Securities.
Section 1420. Subrogation to Rights of Holders of Guarantor Senior
----------------------------------------------------
Indebtedness.
------------
Subject to the payment in full of all Guarantor Senior Indebtedness in cash
or Cash Equivalents or in any other form acceptable to the holders of Guarantor
Senior Indebtedness, the Holders of the Securities shall be subrogated to the
rights of the holders of such Guarantor Senior Indebtedness to receive payments
and distributions of cash, property and securities applicable to the Guarantor
Senior Indebtedness until the principal of, premium, if any, and interest on the
Securities shall be paid in full. For purposes of such subrogation, no payments
or distributions to the holders of Guarantor Senior Indebtedness of any cash,
property or securities to which the Holders of the Securities or the Trustee
would be entitled except for the provisions of this Article, and no payments
over pursuant to the provisions of this Article to the holders of Guarantor
Senior Indebtedness by Holders of the Securities or the Trustee, shall, as among
any Guarantor, its creditors other than holders of Guarantor Senior
Indebtedness, and the Holders of the Securities, be deemed to be a payment or
distribution by such Guarantor to or on account of the Guarantor Senior
Indebtedness.
Section 1421. Provisions Solely to Define Relative Rights.
-------------------------------------------
The provisions of Sections 1416 through 1429 of this Indenture are intended
solely for the purpose of defining the relative rights of the Holders of the
Securities on the one hand and the holders of Guarantor Senior Indebtedness on
the other hand. Nothing contained in this Article or elsewhere in this
Indenture or in the Securities is intended to or shall (a) impair, as among any
Guarantor, its creditors other than holders of Guarantor Senior Indebtedness and
the Holders of the Securities, the obligation of such Guarantor, which is
absolute and unconditional, to pay to the Holders of the Securities the
principal of, premium, if any, and interest on the Securities as and when the
same shall become due and payable in accordance with their terms; or (b) affect
the relative rights against each of the Guarantors of the Holders of the
Securities and creditors of
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each of the Guarantors other than the holders of Guarantor Senior Indebtedness;
or (c) prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders of
Guarantor Senior Indebtedness (1) in any case, proceeding, dissolution,
liquidation or other winding up, assignment for the benefit of creditors or
other marshaling of assets and liabilities of the Guarantors referred to in
Section 1417, to receive, pursuant to and in accordance with such Section, cash,
property and securities otherwise payable or deliverable to the Trustee or such
Holder, or (2) under the conditions specified in Section 1418, to prevent any
payment prohibited by such Section or enforce their rights pursuant to Section
1418(c).
Section 1422. Trustee to Effectuate Subordination.
-----------------------------------
Each Holder of a Security by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article and appoints the
Trustee his attorney-in-fact for any and all such purposes, including, in the
event of any dissolution, winding-up, liquidation or reorganization of any
Guarantor whether in bankruptcy, insolvency, receivership proceedings, or
otherwise, the timely filing of a claim for the unpaid balance of the
indebtedness of any Guarantor owing to such Holder in the form required in such
proceedings and the causing of such claim to be approved.
Section 1423. No Waiver of Subordination Provisions.
-------------------------------------
(a) No right of any present or future holder of any Guarantor Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
any Guarantor or by any act or failure to act by any such holder, or by any non-
compliance by any Guarantor with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
(b) Without limiting the generality of Subsection (a) of this Section and
notwithstanding any other provision contained herein, the holders of Guarantor
Senior Indebtedness may, at any time and from time to time, without the consent
of or notice to the Trustee or the Holders of the Securities, without incurring
responsibility to the Holders of the Securities and without impairing or
releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Securities to the holders of Guarantor Senior
Indebtedness, do any one or more of the following: (1) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter,
Guarantor Senior Indebtedness or any instrument evidencing the same or any
agreement under which Guarantor Senior Indebtedness is outstanding; (2) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Guarantor Senior Indebtedness; (3) release any Person liable
in any manner for the collection or payment of Guarantor Senior Indebtedness;
and (4)
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exercise or refrain from exercising any rights against any of the Guarantors and
any other Person; provided, however, that in no event shall any such actions
limit the right of the Holders of the Securities to take any action to
accelerate the maturity of the Securities in accordance with the provisions set
forth in Article Five or to pursue any rights or remedies under this Indenture
or under applicable laws if the taking of such action does not otherwise violate
the terms of this Article.
Section 1424. Notice to Trustee by Each of the Guarantors.
-------------------------------------------
(a) Each Guarantor shall give prompt written notice to the Trustee of any
fact known to such Guarantor which would prohibit the making of any payment to
or by the Trustee in respect of the Guarantee. Notwithstanding the provisions of
this Article or any provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from any
Guarantor or a holder of Guarantor Senior Indebtedness or any trustee, fiduciary
or agent therefor; and, prior to the receipt of any such written notice, the
Trustee shall be entitled in all respects to assume that no such facts exist;
provided, however, that if the Trustee shall not have received the notice
provided for in this Section prior to the date upon which by the terms hereof
any money may become payable for any purpose (including, without limitation, the
payment of the principal of, premium, if any, or interest on any Security or any
other Indenture Obligations), then, anything herein contained to the contrary
notwithstanding but without limiting the rights and remedies of the holders of
Guarantor Senior Indebtedness or any trustee, fiduciary or agent thereof, the
Trustee shall have full power and authority to receive such money and to apply
the same to the purpose for which such money was received and shall not be
affected by any notice to the contrary which may be received by it after such
date; nor shall the Trustee be charged with knowledge of the curing of any such
default or the elimination of the act or condition preventing any such payment
unless and until the Trustee shall have received an Officers' Certificate to
such effect.
(b) The Trustee shall be entitled to rely on the delivery to it of a
written notice to the Trustee and each Guarantor by a Person representing
himself to be a representative of one or more holders of Designated Guarantor
Senior Indebtedness (a "Guarantor Senior Representative") or a holder of
Guarantor Senior Indebtedness (or a trustee, fiduciary or agent therefor) to
establish that such notice has been given by a Guarantor Senior Representative
or a holder of Guarantor Senior Indebtedness (or a trustee, fiduciary or agent
therefor); provided, however, that failure to give such notice to the Company
shall not affect in any way the ability of the Trustee to rely on such notice.
In the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Guarantor Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Guarantor Senior
Indebtedness held by such Person, the extent to which such
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Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Section 1425. Reliance on Judicial Order or Certificate of Liquidating
--------------------------------------------------------
Agent.
-----
Upon any payment or distribution of assets of any Guarantor referred to in
this Article, the Trustee and the Holders of the Securities shall be entitled to
rely upon any order or decree entered by any court of competent jurisdiction in
which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Guarantor Senior Indebtedness
and other indebtedness of such Guarantor, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article, provided that the foregoing shall apply only if such
court has been fully apprised of the provisions of this Article.
Section 1426. Rights of Trustee as a Holder of Guarantor Senior
-------------------------------------------------
Indebtedness; Preservation of Trustee's Rights.
----------------------------------------------
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article with respect to any Guarantor Senior Indebtedness
which may at any time be held by it, to the same extent as any other holder of
Guarantor Senior Indebtedness, and nothing in this Indenture shall deprive the
Trustee of any of its rights as such holder. Nothing in this Article shall apply
to claims of, or payments to, the Trustee under or pursuant to Section 606.
Section 1427. Article Applicable to Paying Agents.
-----------------------------------
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting under this Indenture, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
however, that Section 1426 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
Section 1428. No Suspension of Remedies.
-------------------------
-97-
<PAGE>
Nothing contained in this Article shall limit the right of the Trustee or
the Holders of Securities to take any action to accelerate the maturity of the
Securities pursuant to the provisions described under Article Five and as set
forth in this Indenture or to pursue any rights or remedies hereunder or under
applicable law, subject to the rights, if any, under this Article of the
holders, from time to time, of Guarantor Senior Indebtedness to receive the
cash, property or securities receivable upon the exercise of such rights or
remedies.
Section 1429. Trustee's Relation to Guarantor Senior Indebtedness.
---------------------------------------------------
With respect to the holders of Guarantor Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of Guarantor Senior Indebtedness shall
be read into this Article against the Trustee. The Trustee shall not be deemed
to owe any fiduciary duty to the holders of Guarantor Senior Indebtedness and
the Trustee shall not be liable to any holder of Guarantor Senior Indebtedness
if it shall mistakenly in the absence of gross negligence or willful misconduct
pay over or deliver to Holders, the Company or any other Person moneys or assets
to which any holder of Guarantor Senior Indebtedness shall be entitled by virtue
of this Article or otherwise.
If an officer whose signature is on this Indenture no longer holds that
office at the time the Trustee authenticates a Security on which a Guarantee is
endorsed, such Guarantee shall be valid nevertheless.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
CAPITAL AUTOMOTIVE REIT, as Issuer
Attest By:
_______________________ _______________________
Name: Name:
Title: Title:
Attest [Name of Trustee], as Trustee
By:
-98-
<PAGE>
_______________________ _______________________
Name: Name:
Title: Title:
-99-
<PAGE>
STATE OF _________________)
) ss.:
COUNTY OF ________________)
On the ___ day of _____________, ____, before me personally came
___________, to me known, who, being by me duly sworn, did depose and say that
he resides at __________________________________________________; that he is
__________ of Capital Automotive REIT, a real estate investment trust described
in and which executed the foregoing instrument; and that he signed his name
thereto pursuant to authority of the Boards of Trustees of such company.
(NOTARIAL SEAL)
___________________________
-100-
<PAGE>
STATE OF _______________________)
) ss.:
COUNTY OF ______________________)
On the ____ day of _____, 1998, before me personally came ______, to me
known, who, being by me duly sworn, did depose and say that he resides at
__________________________________________; that he is an authorized officer of
[Name of Trustee], one of the corporations described in and which executed the
above instrument; that he knows the corporate seal of such corporation; that the
seal affixed to said instrument is such corporate seal; that it was so affixed
pursuant to authority of the Board of Trustees of such corporation; and that he
signed his name thereto pursuant to like authority.
(NOTARIAL SEAL)
___________________________
-101-
<PAGE>
EXHIBIT 5.1
WILMER, CUTLER & PICKERING Washington
2445 M Street, N.W. Baltimore
Washington, D.C. 20037-1420 New York
--- London
Telephone (410) 986-2800 Brussels
Facsimile (410) 986-2828 Berlin
March 1, 1999
Capital Automotive REIT
1420 Spring Hill Road, Suite 525
McLean, Virginia 22102
Re: Capital Automotive REIT
-----------------------
Registration Statement on Form S-3
----------------------------------
Dear Ladies and Gentlemen:
We have acted as counsel to Capital Automotive REIT, a Maryland real estate
investment trust (the "Company"), in connection with a Registration Statement on
Form S-3 (the "Registration Statement") filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended. The Registration
Statement relates to the offering and sale from time to time of securities with
an aggregate public offering price of up to $200,000,000. The securities offered
and sold by the Company pursuant to the Registration Statement may be all or any
combination of: (1) common shares of beneficial interest, par value $.01 per
share (the "Common Shares"), in any class or series, of the Company,
(2) preferred shares of beneficial interest, par value $.01 per share (the
"Preferred Shares"), in any class or series, of the Company, (3) senior debt
securities of the Company (the "Senior Debt Securities"), subordinated debt
securities of the Company (the "Subordinated Debt Securities") as well as
guarantees (the "Guarantee"), if applicable, of the Senior Debt Securities or
Subordinated Debt Securities, by Capital Automotive L.P., a Delaware limited
partnership (the "Guarantor"), and/or (4) Warrants to purchase Common Shares, in
any class or series, or Preferred Shares, in any class or series, (the
"Warrants"). The Senior Debt Securities and the Subordinated Debt Securities,
with or without any Guarantee, are collectively referred to herein as the "Debt
Securities." The Common Shares, the Debt Securities, the Preferred Shares and
the Warrants are collectively referred to herein as the "Securities." The Senior
Debt Securities and any Guarantees thereof will be offered and sold pursuant to
indentures (individually, the "Senior Indenture") between or among the Company
and one or more trustees and other parties to the Senior Indenture. The
Subordinated Debt Securities and any Guarantees thereof will be offered and sold
pursuant to written indentures (individually, the "Subordinated Indenture")
between or among the Company and one or more trustees or other parties to the
<PAGE>
Capital Automotive REIT
March 1, 1999
Page 2
Subordinated Indenture. Any trustee under the Senior Indenture or the
Subordinated Indenture is referred to herein as a "Trustee." Any Senior
Indenture or Subordinated Indenture is referred to herein as an "Indenture." The
Common Shares and/or Preferred Shares may be offered in any class or series and
to the extent required will be offered and sold pursuant to Articles
Supplementary or amendments to the Company's Amended and Restated Declaration of
Trust to be filed with the Maryland State Department of Assessments and Taxation
("SDAT"). Any Warrants will be offered and sold pursuant to a written warrant
agreement (the "Warrant Agreement).
For the purposes of this opinion, we have examined copies of the following
documents:
1. The Registration Statement;
2. The Declaration of Trust of the Company (the "Declaration of Trust"),
as amended, restated or supplemented, as certified by SDAT on
February 23, 1999;
3. The forms of the Indentures filed as exhibits to the Registration
Statement;
4. The Bylaws of the Company (the "Bylaws"), as amended, restated or
supplemented, as of the date hereof;
5. The Agreement of Limited Partnership of the Guarantor (the "Partnership
Agreement"), as amended, restated or supplemented, as of the date
hereof;
6. The Resolutions of the Board of Trustees of the Company dated
February 2, 1999; and
7. Such other documents, corporate records, certificates of public
officials and other instruments as we have deemed necessary for the
purposes of rendering this opinion.
In our examination of the aforesaid documents, we have assumed the legal
capacity of all natural persons, the genuineness of all signatures, the
completeness and authenticity of all documents submitted to us as originals, and
the conformity to original documents of all documents submitted to us as
certified, telecopied, photostatic or reproduced copies.
In connection with the opinions expressed below, we have assumed that at
and prior to the offering, sale and delivery of any Common Shares, Preferred
Shares, Debt Securities or Warrants, as
<PAGE>
Capital Automotive REIT
March 1, 1999
Page 3
the case may be, pursuant to the Registration Statement, (i) the Board of
Trustees of the Company (or the committee of the Board or the officer authorized
to act on behalf of the Company, or the general partner of the Guarantor, as the
case may be,) will have duly established the rights, powers, privileges and
preferences and other terms, if any, of any class or series, as applicable, of
the Common Shares, Preferred Shares, Debt Securities or Warrants, (ii) the
Resolutions of the Board of Trustees authorizing the offering and sale of the
Securities have not have been amended, modified or rescinded, (iii) the
Registration Statement has been declared effective and no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings with respect thereto have been commenced or threatened, and
(iv) there has not occurred any change in law materially adversely affecting the
power of the Company to offer and sell the Securities or the validity of any
Security. We have also assumed that the terms of any Common Shares, Preferred
Shares, Debt Securities or Warrants to be established subsequent to the date
hereof; the offering, sale and delivery of any such Securities; and compliance
by the Company (or the Guarantor, as the case may be,) with the rights, powers,
privileges and preferences and other terms, if any, of such Common Shares,
Preferred Shares, Debt Securities or Warrants will not at the time of such
offering and sale violate or conflict with (1) the Declaration of Trust, as then
amended, restated and supplemented, and Bylaws, as then amended, restated and
supplemented, of the Company (or the Partnership Agreement, as then amended,
restated or supplemented, of the Guarantor, if applicable,), (2) any provision
of any license, indenture, instrument, mortgage, contract, document or agreement
to which the Company (or the Guarantor, if applicable,) is then a party or by
which the Company (or the Guarantor, if applicable,) is then bound, or (3) any
law or regulation or any decree, judgment or order applicable to the Company (or
the Guarantor, if applicable,). We have further assumed that the number of
Common Shares or Preferred Shares to be offered and sold pursuant to the
Registration Statement will not at the time of such offering and sale exceed the
amount of such class of capital shares authorized in the Declaration of Trust,
as then amended, restated or supplemented, and unissued at such time. We have
also assumed that prior to the offering and sale (1) ,in the case of Common
Shares and Preferred Shares, as applicable, Articles Supplementary or an
amendment to the Declaration of Trust will have been filed with, and accepted
for record by, SDAT, (2) ,in the case of Debt Securities, an Indenture will have
been executed and delivered by the Company, the Trustee and the other parties
thereto that complies with the Trust Indenture Act of 1939, as amended, and any
other applicable laws, and (3) ,in the case of Warrants, a written warrant
agreement will have been executed and delivered by the Company (and any other
maker thereof). Notwithstanding anything herein to the contrary, we have also
assumed that in no event will the combined aggregate purchase prices for the
Securities to be offered pursuant to the Registration Statement exceed the
registered amount of $200,000,000.
<PAGE>
Capital Automotive REIT
March 1, 1999
Page 4
Based upon, subject to, and limited by the foregoing, we are of the opinion
that:
1. The offering and sale of Common Shares pursuant to the Registration
Statement have been duly authorized and when Common Shares registered under the
Registration Statement are offered and sold by the Company, and when they are
paid for by the purchasers thereof and issued in accordance with their terms,
such Common Shares will be validly issued, fully paid and nonassessable.
2. The offering and sale of Preferred Shares pursuant to the Registration
Statement have been duly authorized and when Preferred Shares registered under
the Registration Statement are offered and sold by the Company, and when they
are paid for by the purchasers thereof and issued in accordance with their
terms, such Preferred Shares will be validly issued, fully paid and
nonassessable.
3. The offering and sale of Debt Securities pursuant to the Registration
Statement have been duly authorized and when Debt Securities registered under
the Registration Statement are offered and sold by the Company (and the
Guarantor, if applicable,), and when they are paid for by the purchasers
thereof and issued in accordance with their terms, such Debt Securities will
constitute valid and binding obligations of the Company (and the Guarantor, if
applicable,), enforceable against each of them, as applicable, in accordance
with their terms, except as (a) the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or
similar laws now or hereinafter in effect relating to or affecting the
enforcement of creditors' rights generally and (b) the availability of equitable
remedies may be limited by equitable principles of general applicability
(regardless of whether considered in a proceeding at law or in equity).
4. The offering and sale of Warrants pursuant to the Registration
Statement have been duly authorized and when Warrants registered under the
Registration Statement are offered and sold by the Company, and when they are
paid for by the purchasers thereof and issued in accordance with their terms,
such Warrants will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as (a)
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or similar laws now or
hereinafter in effect relating to or affecting the enforcement of creditors'
rights generally and (b) the availability of equitable remedies may be limited
by equitable principles of general applicability (regardless of whether
considered in a proceeding at law or in equity).
<PAGE>
Capital Automotive REIT
March 1, 1999
Page 5
This opinion is limited to the laws of the United States, the General
Corporation Law of Maryland and New York contract law (but not including any
statutes, ordinances, administrative decisions, rules or regulations of any
political subdivision of the State of New York). We are members of the Bar of
the States of Maryland and New York and do not hold ourselves out as being
experts in the laws of any other jurisdiction. Our opinion is rendered only
with respect to the laws and the rules, regulations and orders thereunder that
are currently in effect. We assume no obligation to advise you of any changes
in the foregoing subsequent to the delivery of this opinion. This opinion has
been prepared solely for your use in connection with the filing of the
Registration Statement, and should not be quoted in whole or in part or
otherwise be referred to, nor otherwise be filed with or furnished to any
governmental agency or other person or entity, without our express prior
written consent.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name therein under the caption
"Legal Matters."
Very truly yours,
WILMER, CUTLER & PICKERING
By: /s/ JOHN B. WATKINS, JR.
---------------------------------
John B. Watkins, Jr., a partner
<PAGE>
Exhibit 8.1
<TABLE>
<S> <C>
WILMER, CUTLER & PICKERING WASHINGTON
2445 M Street, N.W. BALTIMORE
Washington, D.C. 20037-1420 NEW YORK
---------- LONDON
Telephone (202) 663-6000 BRUSSELS
Facsimile (202) 663-6363 BERLIN
</TABLE>
March 1, 1999
Capital Automotive REIT
1420 Spring Hill Road, Suite 525
McLean, Virginia 22102
Capital Automotive REIT
-----------------------
Qualification as Real Estate Investment Trust
---------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Capital Automotive REIT, a Maryland real
estate investment trust ("Capital Automotive"), in connection with the
preparation of a Form S-3 registration statement (the "Registration Statement")
filed with the Securities and Exchange Commission on March 1, 1999, with respect
to the offering and sale from time to time of securities with an aggregate
public offering price of up to $200,000,000. The securities offered and sold by
Capital Automotive pursuant to the Registration Statement may be all or any
combination of: (1) common shares of beneficial interest, par value $.01 per
share ("Commons Shares"), of Capital Automotive, in any class or series, from
time to time, (2) preferred shares of beneficial interest, par value $.01 per
share ("Preferred Shares"), of Capital Automotive, in any class or series, from
time to time, (3) senior debt securities, subordinated debt securities as well
as guarantees, if applicable, of the senior debt securities or subordinated debt
securities, by Capital Automotive L.P., a Delaware limited partnership (the
"Partnership"), and/or (4) warrants to purchase Common Shares or Preferred
Shares, in any class or series. You have requested our opinion regarding certain
U.S. federal income tax matters in connection with the Registration Statement.
Unless specifically defined otherwise, all terms used herein have the meaning
set forth in the Registration Statement.
In giving this opinion letter, we have examined and relied on
originals, or copies certified or otherwise identified to our satisfaction, of
the following: (1) the Declaration of Trust of Capital Automotive, as amended,
restated and supplemented (the "Declaration of Trust"), as certified by the
Department of
<PAGE>
Capital Automotive REIT
March 1, 1999
Page 2
Assessments and Taxation of the State of Maryland on February 23, 1999; (2) the
Bylaws of Capital Automotive, as amended, restated and supplemented (the
"Bylaws"), to the date hereof; (3) the Registration Statement, including the
prospectus contained as part of the Registration Statement (the "Prospectus");
(4) the Agreement of Limited Partnership of the Partnership, as amended,
restated and supplemented (the "Partnership Agreement"), to the date hereof,
among Capital Automotive, in its capacity as general partner, and the limited
partners (the general partner and the limited partners are collectively referred
to herein as "Partners"); (5) the representations contained in a certificate
dated March 1, 1999 and executed by a duly appointed officer of Capital
Automotive (the "Officer's Certificate") and (6) such other documents as we have
deemed necessary or appropriate for purposes of this opinion.
In connection with the opinions rendered below, we have assumed, with
your consent, that: (i) each of the documents referred to above has been duly
authorized, executed and delivered; is authentic, if an original, or is
accurate, if a copy; has not been amended; and any unexecuted documents have
been or will be executed substantially in the form and content reviewed by us;
(ii) Capital Automotive will elect REIT status in conformity with the
requirements of Treas. Reg. Section 1.856-2(b) in its federal income tax return
for 1998; (iii) during its taxable year ended December 31, 1998 and subsequent
taxable years, Capital Automotive operated and intends to continue to operate in
such a manner that will make the representations contained in the Officer's
Certificate, true for such years; (iv) Capital Automotive does not intend to
make any amendments to the Declaration of Trust and Bylaws, the Partnership
Agreement or any other agreements, after the date of this opinion that would
affect its qualification as a real estate investment trust for U.S. federal
income tax purposes for any taxable year; and (v) no action will be taken by
Capital Automotive, the Partnership or the Partners after the date hereof that
would have the effect of altering the facts upon which the opinions set forth
below are based.
Unless facts material to the opinions expressed herein are
specifically stated to have been independently established or verified by us, we
have relied as to such facts solely upon the correctness of the representations
made by Capital Automotive and the Partnership. For the purposes of rendering
this opinion, we have not made an independent investigation of the facts set
forth in any of the aforementioned documents, including without limitation the
Prospectus and the Officer's Certificate. We have consequently relied upon your
representations that the information presented in such documents or otherwise
furnished to us accurately and completely describes all material facts relevant
to this opinion. After reasonable inquiry, no facts have come to our attention
that would cause us to question the accuracy and completeness of the facts
contained in the documents and assumptions set forth above, the representations
set forth in the Officer's Certificate, or the Prospectus in a material way.
<PAGE>
Capital Automotive REIT
March 1, 1999
Page 3
Based on the documents and assumptions set forth above, the
representations set forth in the Officer's Certificate, and the discussion in
the Prospectus under the caption "Federal Income Tax Consequences" (which is
incorporated herein by reference), we are of the opinion that:
(a) Capital Automotive will qualify as a REIT under sections 856
through 859 of the Internal Revenue Code of 1986, as amended (the "Code")
with respect to the Company's first taxable year ended December 31, 1998,
is organized in conformity with the requirements for qualification as a
REIT under the Code, and its current method of operation will enable it to
meet the requirements for qualification as a REIT for the current taxable
year and for future taxable years. With respect to its current and future
years, however, Capital Automotive's status as a REIT at any time is
dependent, among other things, upon its meeting certain requirements
throughout the year as a whole; and
(b) the descriptions of the law and the legal conclusions contained in
the Prospectus under the caption "Federal Income Tax Consequences" are
correct in all material respects, and the discussion thereunder fairly
summarizes the federal income tax consequences that are likely to be
material to a holder of the Common Shares.
We will not review on a continuing basis Capital Automotive's
compliance with the documents or assumptions set forth above, or the
representations set forth in the Officer's Certificate. Accordingly, no
assurance can be given that the actual results of Capital Automotive's
operations for any given taxable year will satisfy the requirements for
qualification and taxation as a REIT.
The foregoing opinions are based on current provisions of the Code and
the Treasury regulations thereunder (the "Regulations"), published
administrative interpretations thereof, and published court decisions. The
Internal Revenue Service has not issued Regulations or administrative
interpretations with respect to various provisions of the Code relating to REIT
qualification. No assurance can be given that the law will not change in a way
that will prevent Capital Automotive from qualifying as a REIT for federal
income tax purposes.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the references to Wilmer, Cutler &
Pickering under the caption "Federal Income Tax Consequences" in the Prospectus.
The foregoing opinions are limited to the U.S. federal income tax
matters addressed herein, and no other opinions are rendered with respect to
other federal tax matters or to any issues arising under the tax laws of any
other country, or any state or locality. We
<PAGE>
Capital Automotive REIT
March 1, 1999
Page 4
undertake no obligation to update the opinions expressed herein after the date
of this letter. This opinion letter is solely for the information and use of the
addressees, and it may not be distributed, relied upon for any purpose by any
other person, quoted in whole or in part or otherwise reproduced in any
document, or filed with any governmental agency without our express written
consent.
Very truly yours,
Wilmer, Cutler & Pickering
/s/ Robert B. Stack
---------------------------------------
By Robert B. Stack, a Partner
<PAGE>
EXHIBIT 12.1
Capital Automotive REIT
Ratio of Earnings to Fixed Charges
Year Ended December 31, 1998
(in thousands)
Fixed Charges:
Interest expensed and capitalized $ 2,254
Amortized premiums, discounts and
capitalized expenses related to
indebtedness 77
--------------
Total Fixed Charges $ 2,331
==============
Earnings:
Pretax income from continuing operations before
adjustment for minority interests in consolidated
subsidiaries or income or loss from equity
investees $ 20,886
Fixed charges 2,331
---------------
Total Earnings $ 23,217
===============
---------------
Ratio of Earnings to Fixed Charges 9.96
===============
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report on
Capital Automotive REIT (and to all references to our firm) included in or made
a part of this Registration Statement.
/s/ Arthur Andersen LLP
Washington, D.C.,
March 1, 1999
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the use of our
report on the 1997 Geneva Enterprises, Inc. and Affiliated Company (and to all
references to our firm) included in or made a part of this Registration
Statement.
Baltimore, Maryland WALPERT, SMULLIAN &
BLUMENTHAL, F.A.
March 1, 1999
By: /s/ Jacob Cohen
-----------------------
Name: JACOB COHEN, CPA
Title: PARTNER
