As filed with the Securities and Exchange Commission on August 6, 1998
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) July 28, 1998
CAPITAL TRUST
-------------
(Exact name of registrant as specified in its charter)
California 1-8063 94-6181186
- --------------------------------------------------------------------------------
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
605 Third Avenue, 26th Floor
New York, New York 10016
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(212) 655-0220
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
743259.4
<PAGE>
ITEM 5. Other Events
On July 28, 1998, the Registrant privately placed to the three
Investors (as defined below) (the "Private Placement")150,000 8.25% Step Up
Convertible Trust Preferred Securities (liquidation amount $1,000 per security)
representing undivided beneficial interests in the assets of the CT Trust I (as
defined below) with an aggregate liquidation amount of $150,000,000 (the
"Preferred Securities"). The Preferred Securities were issued by the
Registrant's newly formed consolidated subsidiary, CT Convertible Trust I, a
Delaware statutory business trust ("CT Trust I"), concurrently with the related
issuance and sale to CT Trust I of the Company's 8.25% Step Up Convertible
Junior Subordinated Debentures in the aggregate principal amount of $154,650,000
(the "Convertible Debentures"). The Registrant received $145,500,000 of proceeds
pursuant to the foregoing transactions, reflecting an original issue discount of
3% from the liquidation amount of the Preferred Securities.
The Registrant sponsored the formation of CT Trust I, pursuant to the
Declaration of Trust, dated as of July 28, 1998 (the "Declaration"), by the
Trustees (as defined therein), the Registrant, as sponsor, and the holders, from
time to time, of undivided beneficial interests in CT Trust I to be issued
pursuant to such Declaration. A Certificate of Trust for CT Trust I was filed in
the State of Delaware on July 28, 1998.
The Preferred Securities were offered and sold pursuant to the
Preferred Securities Purchase Agreement, dated as of July 27, 1998 (the
"Purchase Agreement"), among the Registrant, CT Trust I, as issuer, and Vornado
Realty L.P., a Delaware limited partnership ("VRLP"), EOP Operating Limited
Partnership, an Delaware limited partnership ("EOPLP"), Mellon Bank N.A., as
trustee for General Motors Hourly-Rate Employes Pension Trust, a New York trust
("Hourly GM Trust"), and Mellon Bank N.A., as trustee for General Motors
Salaried Employes Pension Trust, a New York trust ("Salaried GM Trust," and
together with the Hourly GM Trust, the "GM Trust"; each of VRLP, EOPLP and the
GM Trust being referred to herein as an "Investor" and collectively as the
"Investors"), as purchasers. Pursuant to the Declaration, the proceeds obtained
from the Private Placement, together with the proceeds obtained from the
issuance and sale by the CT Trust I to the Registrant pursuant to a Subscription
Agreement, dated as of July 28, 1998, by the Registrant of 4,650 8.25% Step Up
Convertible Trust Common Securities (liquidation amount $1,000 per security),
representing undivided beneficial interests in the assets of CT Trust I with an
aggregate liquidation amount of $4,650,000 (the "Common Securities" and together
with the Preferred Securities, the "Securities"), were used to purchase from the
Registrant $154,650,000 aggregate principal amount of Convertible Debentures.
The Securities were issued pursuant to the Declaration. The Preferred
Securities are guaranteed by the Registrant, with respect to distributions and
amounts payable upon liquidation or redemption and otherwise, pursuant to the
Preferred Securities Guarantee Agreement, dated as of July 28, 1998, by the
Registrant and Wilmington Trust Company, as preferred guarantee trustee (the
"Preferred Securities Guarantee"). The Common Securities are guaranteed by the
Registrant, with respect to distributions and amounts payable upon liquidation
or redemption and otherwise, pursuant to the Common Securities Guarantee
Agreement, dated as of July 28, 1998, by the Registrant (the "Common Securities
Guarantee").
Distributions payable on each Security are fixed at a rate per annum of
8.25% of the stated liquidation amount of $1,000 per Security from and including
July 28, 1998 to and including September 30, 2004, such rate per annum (i)
automatically increasing by an additional 0.75% per annum (any such increase
will be cumulative with any such prior increase(s)) on October 1, 2004, and
again on each
743259.4
<PAGE>
subsequent October 1 and (ii) automatically increasing by a prescribed amount in
the event the Registrant pays a cash dividend or distribution on its Common
Shares (as defined below). Distributions on the Securities are cumulative and
are required to be paid quarterly in arrears on March 31, June 30, September 30
and December 31 of each year, commencing on September 30, 1998.
The Convertible Debentures were issued under an Indenture, dated as of
July 28, 1998, between the Registrant and Wilmington Trust Company, as trustee
(the "Indenture"). The Convertible Debentures will mature on September 30, 2018
(the "Maturity Date"). Each Convertible Debenture will bear interest at the rate
of 8.25% per annum (i) from and including July 28,1998 to and including
September 30, 2004, such rate of interest per annum automatically increasing by
an additional 0.75% per annum (any such increase shall be cumulative with any
such prior increase(s)) on October 1, 2004 and again on each subsequent October
1 and (ii) automatically increasing by an amount equal to the amount of any such
similar increase to the distribution rate on the Securities in the event the
Registrant pays a cash dividend or a distribution on its Common Shares, until
the principal thereof becomes due and payable. Interest on the Convertible
Debentures is cumulative and is required to be paid quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year, commencing on
September 30, 1998.
As discussed above, the distribution rates and distribution payment
dates for the Preferred Securities correspond to the interest rates and interest
payment dates Convertible Debentures, which are the sole assets of CT Trust I.
As a result, if principal and interest are not paid on the Convertible
Debentures, no amounts will be paid on the Preferred Securities. Under the
Indenture, so long as no event of default with respect to the Convertible
Debentures has occurred and is continuing, the Registrant, upon the making of a
prescribed certification, has the right to defer payments of interest on the
Convertible Debentures at any time, and from time to time, for a period not
exceeding 20 consecutive quarterly periods ("Extension Period"), which if
exercised would defer quarterly distributions on the Preferred Securities during
any such Extension Period. During any Extension Period, interest on the
Convertible Debentures and distributions on the Preferred Securities would
continue to accumulate with interest thereon, compounded quarterly, at the
applicable interest rate or distribution rate to the extent permitted by
applicable law.
The Indenture provides, subject to certain exceptions, that upon (i) an
event of default under the Indenture, (ii) a default by CT Trust I with respect
to payment or other obligations under the Preferred Securities Guarantee or
Common Securities Guarantee, or (iii) the election by CT Trust I to defer
payments of interest on Convertible Debentures in accordance with the Indenture,
the Registrant will be prohibited from (x) paying dividends or making other
distributions on, or redeeming, purchasing or making liquidation payments with
respect to, its capital stock and (y) paying interest, principal or premium on,
or repaying, repurchasing, or redeeming any of the Registrant's debt securities
ranking pari passu with or junior to the Convertible Debentures or making any
guarantee payments with respect to any guarantee by the Registrant of the debt
securities or any of the Registrant's subsidiaries if such guarantee ranks pari
passu with or junior in interest to the Convertible Debentures. Under the
Indenture, the Registrant may redeem the Convertible Debentures in whole or in
part (pro rata among the holders) on or after September 30, 2003 at a price
equal to 100% of the principal amount of the Convertible Debentures plus accrued
and unpaid interest to the redemption date. Proceeds from any redemption must be
used to redeem the Preferred Securities and any Common Securities.
Upon the repayment of the Convertible Debentures in whole or in part,
whether at maturity, upon redemption or otherwise, the proceeds from such
repayment or payment will be simultaneously applied to redeem the Securities
having an aggregate liquidation amount equal to the aggregate principal amount
743259.4
2
<PAGE>
of the Convertible Debentures so repaid or redeemed at a redemption price per
Security equal to the redemption price of the Convertible Debentures, together
with accrued and unpaid distributions thereon to, but excluding, the date of the
redemption.
Pursuant to the Declaration, at any time through the close of business
on the last business day prior to the Maturity Date (or, in the case of
Securities called for redemption, prior to the close of business on the business
date prior to the redemption date), the Securities will be convertible into
class A common shares of beneficial interest, $1.00 par value, of the Registrant
(the "Common Shares"), pursuant to the direction of the holder of the Securities
to the conversion agent to exchange such Securities for a portion of the
Convertible Debentures theretofore held by CT Trust I on the basis of one
Security per $1,000 principal amount of Convertible Debentures, and immediately
convert such amount of Convertible Debentures into Common Shares at an initial
rate of 85.47 Common Shares per $1,000 principal amount of Convertible
Debentures (which is equivalent to a conversion price of $11.70 per Common
Share), subject to certain adjustments.
In connection with the Private Placement, the Registrant, VRLP, EOPLP,
and General Motors Investment Management Corporation, a Delaware corporation, as
agent for and for the benefit of the Pension Plans (as defined therein) entered
into a certain Co-Investment Agreement, dated as of July 28, 1998, pursuant to
which the Registrant, subject to certain terms and conditions, is obligated to
extend to the other parties to such agreement the opportunity to co-invest in
any loan or other investment for which the Registrant in its sole and absolute
discretion seeks to obtain co-investors.
In connection with the Private Placement, on July 28, 1998, the
Registrant and the Investors also executed the Registration Rights Agreement
pursuant to which the Investors are entitled to certain registration rights with
respect to the Common Shares which are issuable upon conversion of the
Securities and/or the Convertible Debentures.
Neither the Securities nor the Convertible Debentures have been
registered under the Securities Act of 1933, as amended (the "Act"), and may not
be offered or sold in the United States without registration under, or an
applicable exemption from the registration requirements of the Act and
applicable state securities laws.
On July 29, 1998, the Registrant issued a press release, a copy of
which is attached hereto as Exhibit 99.2 and the full text of which is
incorporated by reference herein, announcing the consummation of the
Transactions.
ITEM 7. Financial Statements, Supplemental Financial Information and
Exhibits.
(c) Exhibits.
4.1 Certificate of Trust of CT Convertible Trust I
4.2 Preferred Securities Purchase Agreement dated as of July 27, 1998 among
Capital Trust, CT Convertible Trust I, Vornado Realty L.P., EOP Limited
Partnership, Mellon Bank N.A., as trustee for General Motors
Hourly-Rate Employes Pension Trust, and Mellon Bank N.A., as trustee
for General Motors Salaried Employes Pension Trust.
743259.4
3
<PAGE>
4.3 Declaration of Trust of CT Convertible Trust I ("CT Trust I") dated as
of July 28, 1998 by the Trustees (as defined therein), Capital Trust,
as sponsor, and the holders, from time to time, of undivided beneficial
interests in CT Trust I to be issued pursuant to such Declaration.
4.4 Indenture dated as of July 28, 1998 between Capital Trust and
Wilmington Trust Company, as trustee.
4.5 Preferred Securities Guarantee Agreement dated as of July 28, 1998 by
Capital Trust and Wilmington Trust Company, as trustee.
4.6 Common Securities Guarantee Agreement dated as of July 28, 1998 by
Capital Trust.
10.1 Co-Investment Agreement dated as of July 28, 1998 among Capital Trust,
Vornado Realty L.P., EOP Operating Limited Partnership, and General
Motors Investment Management Corporation, as agent for and for the
benefit of the Pension Plans (as defined therein).
10.2 Registration Rights Agreement dated as of July 28, 1998 among Capital
Trust, Vornado Realty L.P., EOP Limited Partnership, Mellon Bank N.A.,
as trustee for General Motors Hourly-Rate Employes Pension Trust, and
Mellon Bank N.A., as trustee for General Motors Salaried Employes
Pension Trust.
99.1 Press Release, dated July 29, 1998.
743259.4
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CAPITAL TRUST
(Registrant)
Date: August 6, 1998 By: /s/ Edward L. Shugrue III
--------------------------
Name: Edward L. Shugrue III
Title: Chief Financial Officer
743259.4
5
<PAGE>
EXHIBIT 4.1
CERTIFICATE OF TRUST
OF
CT CONVERTIBLE TRUST I
THIS Certificate of Trust of CT CONVERTIBLE TRUST I (the "Trust") is
being duly executed and filed on behalf of the Trust by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. ss. 3801 et seq.) (the "Act").
1. Name. The name of the business trust formed by this Certificate of
Trust is CT CONVERTIBLE TRUST I.
2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware are Wilmington Trust Company, Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890-0001, Attn:
Corporate Trust Administration.
3. Effective Date. This Certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
of Trust in accordance with Section 3811(a)(1) of the Act.
WILMINGTON TRUST COMPANY, as
trustee
By:/s/ Emmett R. Harmon
-----------------------------------
Name: Emmett R. Harmon
Title: Vice President
JOHN R. KLOPP, as trustee
By:/s/ John R. Klopp
-----------------------------------
Name: John R. Klopp
Title: Trustee
SHELI Z. ROSENBERG, as trustee
By:/s/ Sheli Z. Rosenberg
----------------------------------
Name: Sheli Z. Rosenberg
Title: Trustee
744250.1
<PAGE>
EXHIBIT 4.2
PREFERRED SECURITIES PURCHASE AGREEMENT
among
CAPITAL TRUST,
CT CONVERTIBLE TRUST I
and
INVESTORS NAMED THEREIN
July 27, 1998
730804.14
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. PURCHASE AND SALE OF SECURITIES............................2
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE OFFERORS.............2
2.1 Company Organization.......................................2
2.2 Company SEC Reports and Filings............................2
2.3 Company Financial Statements; Material Adverse Changes.....3
2.4 Company Capitalization.....................................4
2.5 Company Subsidiaries.......................................4
2.6 Trust Organization; Authorization, etc.....................4
2.7 Consents and Approvals.....................................5
2.8 Absence of Defaults, Conflicts, etc........................6
2.9 Compliance with Law........................................6
2.10 Pending Actions............................................6
2.11 Private Offering; Integration..............................6
2.12 Brokerage..................................................7
2.13 Subordination..............................................7
2.14 Liabilities................................................7
2.15 Real Property..............................................7
2.16 Environmental Laws.........................................7
2.17 Material Facts.............................................8
2.18 Investment Company Act.....................................8
2.19 Tax Matters................................................8
2.20 Reservation and Valid Issuance of Shares...................8
2.21 Preferred Securities Guarantee.............................8
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS............9
3.1 Certain Representations and Warranties.....................9
3.2 Additional Representations and Warranties..................9
SECTION 4. COVENANTS OF THE COMPANY..................................10
4.1 Tax Matters...............................................10
4.2 Additional Matters........................................10
SECTION 5. OFFERORS' CLOSING CONDITIONS..............................10
5.1 Compliance with Agreement.................................10
5.2 Each Investor to Close....................................10
SECTION 6. INVESTORS' CLOSING CONDITIONS.............................10
6.1 No Material Adverse Effect................................11
6.2 Representations and Warranties............................11
6.3 Compliance with Agreement.................................11
6.4 Officer's and Regular Trustee's Certificate...............11
6.5 Approval of Proceedings...................................11
6.6 Injunction................................................11
6.7 Additional Agreements.....................................12
6.8 Each Investor to Close....................................12
6.9 Opinions..................................................12
730804.14
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<PAGE>
Page
SECTION 7. INDEMNIFICATION...........................................14
7.1 Indemnification Generally.................................14
7.2 Indemnification Procedures for Third Party Claims.........14
SECTION 8. INTERPRETATION OF THIS AGREEMENT..........................15
8.1 Terms Defined.............................................15
8.2 Governing Law.............................................17
8.3 Paragraph and Section Headings............................17
SECTION 9. MISCELLANEOUS.............................................17
9.1 Expenses..................................................17
9.2 Notices...................................................17
9.3 Survival..................................................19
9.4 Entire Agreement; Amendment and Waiver....................19
9.5 Counterparts..............................................19
9.6 Successors and Assigns....................................19
SCHEDULES
Schedule 2.3(b) Company Financial Statements; Material Adverse Change
Schedule 2.6(a) Agreements of the Trust
Schedule 2.14 Liabilities
EXHIBITS
Exhibit A Form of Registration Rights Agreement
Exhibit B Form of Co-Investment Agreement
Exhibit C Opinion of Richards, Layton & Finger, P.A.
730804.14
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<PAGE>
PREFERRED SECURITIES PURCHASE AGREEMENT
This PREFERRED SECURITIES PURCHASE AGREEMENT (this
"Agreement") is made as of July 27, 1998 among Capital Trust, a California
business trust (the "Company"), CT Convertible Trust I, a Delaware statutory
business trust (the "Trust" and together with the Company, the "Offerors"), as
issuer, and Vornado Realty L.P., a Delaware limited partnership ("VRLP"), EOP
Operating Limited Partnership, a Delaware limited partnership ("EOPLP"), Mellon
Bank N.A., as trustee for General Motors Hourly-Rate Employes Pension Trust, a
New York trust ("Hourly GM Trust"), and Mellon Bank N.A., as trustee for General
Motors Salaried Employes Pension Trust, a New York trust ("Salaried GM Trust,
and together with the Hourly GM Trust, the "GM Trust"; each of VRLP, EOPLP and
the GM Trust being referred to herein as an "Investor" and collectively as the
"Investors"), as purchasers.
PRELIMINARY STATEMENT
The Trust is a statutory business trust organized under the
Business Trust Act (the "Delaware Act") of the State of Delaware (Chapter 38,
Title 12, of the Delaware Code, 12 Del. C. Sections 3801 et seq.) pursuant to
the Declaration of Trust, dated and effective as of July 28, 1998, by the
Company and the Trustees as defined therein and the holders, from time to time,
of undivided beneficial interests in the assets of the Trust (the
"Declaration"). The Offerors confirm their agreement with the Investors, with
respect to the offer and sale by the Trust and the purchase by the Investors of
$150,000,000 in aggregate liquidation amount of 8.25% Step Up Convertible Trust
Preferred Securities (Liquidation Amount $1,000 per Security) representing
undivided beneficial interests in the assets of the Trust (the "Preferred
Securities"). The definitions of certain capitalized terms used herein are set
forth in Section 8.1. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned such terms in the Declaration.
The Preferred Securities will be guaranteed by the Company,
with respect to distributions and amounts payable upon liquidation or redemption
and otherwise pursuant to the Preferred Securities Guarantee Agreement, dated as
of July 28, 1998 of the Company (the "Preferred Securities Guarantee").
The entire proceeds from the sale of the Preferred Securities
will be combined with the entire proceeds from the sale by the Trust to the
Company of its common securities (the "Common Securities") and will be used by
the Trust to purchase $154,650,000 in aggregate principal amount of 8.25% Step
Up Convertible Junior Subordinated Debentures due September 30, 2018 (the
"Subordinated Debentures") issued by the Company. The Preferred Securities and
the Common Securities will be issued pursuant to the Declaration. The
Subordinated Debentures will be issued pursuant to the Indenture between the
Company and Wilmington Trust Company (the "Indenture") and dated as of July 28,
1998.
The Preferred Securities, the Preferred Securities Guarantee
and the Subordinated Debentures are collectively referred to herein as the
"Preferred Instruments." The Declaration, the Indenture, the Preferred
Securities Guarantee and this Agreement are hereinafter referred to collectively
as the "Operative Documents."
The Preferred Securities are offered and sold to the Investors
without registration under the Securities Act, in reliance upon exemptions
therefrom, and Investors may only resell or otherwise transfer such Preferred
Securities if such Preferred Securities are hereafter registered under the
Securities Act or if an exemption from the registration requirements of the
Securities Act is available.
The parties hereto desire that the foregoing transaction be
subject to the terms and conditions set forth herein. Accordingly, the parties
agree as follows:
730804.14
<PAGE>
SECTION 1. PURCHASE AND SALE OF SECURITIES
-------------------------------
(a) Subject to the terms and conditions set forth in this
Agreement and in reliance upon representations and warranties contained in this
Agreement, the Trust agrees to sell to the Investors, and each of the Investors
agrees, severally and not jointly, to purchase from the Trust, at a purchase
price of $970 per Preferred Security, the number of Preferred Securities set
forth opposite its name below:
Applicable Portion
Investor Number of Preferred Securities Purchase Price
-------- ------------------------------ ------------------
EOPLP 50,000 $48,500,000
VRLP 50,000 $48,500,000
GM Trust 50,000 $48,500,000
(b) Such sale and purchase shall be effected at the Closing
Time when deliveries of the certificates, duly registered in the Investors'
names evidencing the Preferred Securities being purchased by them, shall be made
against delivery by the Investors to the Trust of the aggregate purchase price
therefor by wire transfer(s) of immediately available funds to such account as
the Trust shall designate prior to the Closing Time.
(c) The closing (the "Closing") of such sale and purchase
shall take place at 11:00 A.M., New York City time, on July 28, 1998, or at such
other time not later than five business days after such date as the Investors
and the Offerors agree to in writing (such time and date of payment and delivery
being hereinafter referred to as the "Closing Time"), at the offices of Battle
Fowler LLP, 75 East 55th Street, New York, New York 10022, or at such other
location as the Investors and the Offerors shall select and agree to.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE OFFERORS
----------------------------------------------
(a) The Offerors, jointly and severally, represent and warrant
to the Investors as of the date hereof and as of the Closing Time referred to in
Section (1)(c) hereof, and agree with the Investors as follows:
2.1 Company Organization
--------------------
(a) The Company has been duly created and is validly existing
as a business trust under the laws of the State of California, has the trust
power and authority to own, lease and operate its properties and to conduct its
business as described in the SEC Reports and Filings (as defined below), and is
duly qualified to transact business in each jurisdiction in which such
qualification is required, whether by reason of the conduct of its business or
its ownership or leasing of property, except where the failure to be so
qualified would not have a Material Adverse Effect (as hereinafter defined). The
Company is not required to make any submissions or filings with any State in
order to maintain its valid existence or good standing.
2.2 Company SEC Reports and Filings
(a) The Company has caused to be delivered to each of the
Investors copies of the following, without exhibits thereto (collectively, the
"SEC Reports and Filings"):
(i) The Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 (File No. 1-8063), as filed with the
Commission on February 26, 1998, and amended by the Company's Annual Report on
Form 10-K/A, as filed with the Commission on April 30, 1998;
730804.14
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<PAGE>
(ii) The Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended March 31, 1998, as filed with the Commission on May 14,
1998;
(iii) The Company's Current Reports on Form 8-K dated
February 9, 1998, February 27, 1998, January 1, 1998, March 12, 1998, April 21,
1998, May 14, 1998, June 2, 1998, June 16, 1998, and June 30 1998 as filed with
the Commission, respectively, on February 23, 1998, March 13, 1998, March 18,
1998, March 19, 1998, April 23, 1998, May 22, 1998, June 12, 1998, June 24,
1998, and July 13, 1998.
(iv) The Company's registration statement on Form S-1
(File No. 333-37271), as filed with the Commission on October 6, 1997, as
amended by Amendments No. 1 and 2 thereto, as filed with the Commission on
October 13, 1997 and December 9, 1997, respectively, the related registration
statement on Form S-1 with respect to the increase in the offering size, as
filed with the Commission on December 10, 1997, and the final form of prospectus
constituting Part I of such registration statements as filed with the Commission
on December 11, 1997; and
(v) The registration statement on Form S-4 of the
Company's wholly-owned subsidiary, Capital Trust, Inc. (File No. 333-21777), as
filed with the Commission on May 14, 1998.
(b) The SEC Reports and Filings, when filed, complied in all
material respects with all applicable requirements of the Securities Act and the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder. None of the SEC Reports and Filings, at the time of filing contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading in light of the circumstances in which they were made.
2.3 Company Financial Statements; Material Adverse Changes
------------------------------------------------------
(a) The audited consolidated balance sheet of the Company as
at December 31, 1997 and the unaudited consolidated balance sheets of the
Company as at March 31, 1998 included in the SEC Reports and Filings fairly
present in all material respects the consolidated financial position of the
Company and its Subsidiaries (as defined below) at the dates thereof, and the
related consolidated statements of operations, equity and cash flows for the
year ended December 31, 1997 and the three months ended March 31, 1998 included
in the SEC Reports and Filings fairly present in all material respects the
results of operations and other information therein of the Company and its
Subsidiaries for the respective periods indicated (except that the interim
reports are subject to adjustments customary in nature and amount which might be
required as a result of year end audit and except as otherwise stated therein)
(collectively, the "Financial Statements"). All such Financial Statements,
including the schedules and notes thereto, were prepared in accordance with
generally accepted accounting principles ("GAAP") applied consistently
throughout the periods involved, except that the interim reports are subject to
customary adjustments which might be required as a result of year end audit and
except as otherwise stated therein.
(b) Except as set forth on Schedule 2.3(b), since December 31,
1997, (A) there has been no material adverse change, and no development
involving a prospective material adverse change, in or affecting the management,
assets, business, business prospects, earnings or condition (financial or
otherwise) of the Trust (a "Trust Material Adverse Effect") or the Company and
its Subsidiaries considered as one enterprise (a "Company Material Adverse
Effect," together with a Trust Material Adverse Effect, a "Material Adverse
Effect"), whether or not arising in the ordinary course of business, (B) there
have been no transactions entered into by the Trust or the Company or any
Subsidiary which are material with respect to the Trust or the Company and its
Subsidiaries considered as one enterprise, other than those in the ordinary
course of business, and (C) there has not been any material change in the total
assets, except assets acquired in the ordinary course of business, or long term
debt of the Company. Neither the Trust nor the Company nor any of its
Subsidiaries has sustained since December 31, 1997 any material loss or
interference with its business from fire, explosion, flood
730804.14
-3-
<PAGE>
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree.
2.4 Company Capitalization
----------------------
(a) The authorized, issued and outstanding shares of
beneficial interest in the Company are set forth in the most recent Financial
Statements, since the date of which there has been no change in the consolidated
capitalization of the Company and its Subsidiaries (other than changes in
outstanding Common Shares resulting from share option plan transactions and
changes in shareholders equity resulting from changes in retained earnings). All
the outstanding shares of beneficial interest in the Company have been duly and
validly authorized and issued and are fully paid and non-assessable.
(b) There are no Common Shares issuable upon exercise or
conversion of any security outstanding of the Company nor any rights, options or
warrants outstanding or other agreements to acquire Common Shares nor is the
Company contractually obligated to purchase, redeem or otherwise acquire any of
its outstanding Common Shares except for Common Shares issuable upon (i)
conversion of the 9.5% class A preferred shares of beneficial interest, $1.00
par value, in the Company, and (ii) exercise of options and share units issued
under the Company's employee and trustee share plans.
2.5 Company Subsidiaries.
--------------------
Each of the Persons of which a majority of the outstanding
voting equity securities or interests are owned, directly or indirectly, by the
Company (each a "Subsidiary" and collectively "Subsidiaries") has been duly
incorporated or organized and is validly existing as a corporation or
partnership in good standing under the laws of the jurisdiction of its
incorporation or organization, has the corporate or partnership power and
authority to own, lease and operate its properties and to conduct its business
as presently conducted, and is duly qualified as a foreign corporation or
partnership to transact business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to so
qualify or be in good standing will not have a Company Material Adverse Effect.
2.6 Trust Organization; Authorization, etc.
--------------------------------------
(a) The Trust has been duly created and is validly existing
and in good standing as a business trust under the Delaware Act with the trust
power and authority to own its properties and to conduct its business and to
enter into and perform its obligations under this Agreement, the Preferred
Securities, the Common Securities, and the Declaration. The Trust is duly
qualified to transact business and is in good standing in each jurisdiction in
which such qualification is necessary, except to the extent that the failure to
so qualify or be in good standing would not have a Material Adverse Effect; and
except as set forth on Schedule 2.6(a), the Trust is not a party to or otherwise
bound by any agreement. The Trust is and will under current law be classified
for United States federal income tax purposes as a grantor trust and not as an
association taxable as a corporation; and as of the Closing Time, the Trust is
and will be treated as a subsidiary of the Company pursuant to GAAP.
(b) This Agreement has been duly authorized, executed and
delivered by the Company and the Trust and is a valid and legally binding
obligation of the Company and the Offerors, enforceable against the Offerors in
accordance with its terms except to the extent that enforcement thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws affecting creditors' rights generally or by
general principles of equity (regardless of whether enforcement is considered in
a proceeding at law or in equity) (the "Bankruptcy Exceptions").
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(c) The Declaration and the Indenture have been duly
authorized by the Company and, to the Company's knowledge, have been duly
authorized by the other parties thereto, and, at the Closing Time, will have
been duly executed and delivered by the Company and, to the Company's knowledge
by the other parties thereto, and each will be a valid and legally binding
obligation of the Company, and to the Company's knowledge, of the other parties
thereto, enforceable against the parties thereto in accordance with its terms,
except to the extent that enforcement thereof may be limited by Bankruptcy
Exceptions.
(d) The Registration Rights Agreement and the Co-Investment
Agreement have been duly authorized by the Company and, at the Closing Time,
will have been duly executed and delivered by the Company and assuming the due
authorization, execution and delivery by the Investors, the Registration Rights
Agreement and the Co-Investment Agreement will, at the Closing Time, be valid
and legally binding obligations of the Company, enforceable against the Company
in accordance with their terms, except to the extent that enforcement thereof
may be limited by (i) Bankruptcy Exceptions or (ii) the effect of applicable
public policy on the enforceability of provisions relating to indemnification
and contribution.
(e) The Preferred Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the Investors
pursuant to this Agreement against payment therefor as provided herein, will be
validly issued and fully paid and non-assessable undivided beneficial interests
in the assets of the Trust. The issuance of the Preferred Securities is not
subject to preemptive or other similar rights; and (subject to the terms of the
Declaration) holders of Preferred Securities will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit incorporated under the laws of the State of Delaware.
(f) The Common Securities have been duly authorized by the
Declaration and, when issued and delivered by the Trust to the Company against
payment therefor, will be validly issued and will represent undivided common
beneficial interests in the assets of the Trust. The issuance of the Common
Securities is not subject to preemptive or other similar rights; and, at the
Closing Time, all of the issued and outstanding Common Securities of the Trust
will be directly or indirectly owned by the Company, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equitable
right.
(g) The Preferred Securities Guarantee has been duly
authorized by the Company and, at the Closing Time, the Preferred Securities
Guarantee will have been duly executed and delivered by the Company and will
constitute a valid and legally binding obligation of the Company, enforceable in
accordance with its terms, except to the extent that enforcement thereof may be
limited by the Bankruptcy Exceptions.
(h) The Subordinated Debentures have been duly authorized by
the Company and, at the Closing Time, the Subordinated Debentures will have been
duly executed, authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits provided by
the Indenture, enforceable in accordance with its terms, except to the extent
that enforcement thereof may be limited by the Bankruptcy Exceptions.
2.7 Consents and Approvals
----------------------
No order, license, consent, authorization or approval of, or
exemption by, or the giving of notice to, or the registration with any
Governmental Authority, and no filing, recording, publication or registration in
any public office or any other place, was or is now required in connection with
the issuance and sale of the Preferred Instruments hereunder, except for (A)
such as may be required under the Securities Act, the Exchange Act or state
securities laws and (B) the filing of the Certificate of Trust with the
Secretary of State (which filing will be duly made).
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2.8 Absence of Defaults, Conflicts, etc.
-----------------------------------
The execution and delivery of the Operative Agreements, the
Registration Rights Agreement and the Co-Investment Agreement, the issuance,
sale and delivery of the Preferred Instruments and the consummation of the
transactions contemplated herein and therein do not and will not conflict with,
or result in a breach or violation of any of the terms, conditions or provisions
of, or constitute a default under, or permit the acceleration of rights under or
termination of, any of the Key Agreements and Instruments of the Company, any
Subsidiary or the Trust or result in the creation or imposition of any lien,
charge, encumbrance upon any property or assets of the Company, any Subsidiary
or the Trust, and will not result in any violation of the Organizational
Documents of the Company, any Subsidiary or the Trust, or any existing
Requirements of Law applicable to the Company, any Subsidiary or the Trust.
2.9 Compliance with Law
-------------------
(a) The Company is not in violation of any Requirements of Law
to which it is subject, which violation could reasonably be expected to result
in a Company Material Adverse Effect.
(b) The Company has all licenses, permits, franchises or other
governmental authorizations necessary to the ownership of its property or to the
conduct of its business, which if violated or not obtained could reasonably be
expected to result in a Company Material Adverse Effect. The Company has not
finally been denied any application for any such licenses, permits, franchises
or other governmental authorizations necessary to its business.
2.10 Pending Actions
---------------
There is no action, suit, investigation or proceeding pending
or, to the Company's knowledge, threatened or contemplated against the Company
or any of its properties or assets by or before any Governmental Authority,
which questions the validity of the Operative Agreements, the issuance or
validity of the Preferred Securities or any action taken or to be taken pursuant
hereto or thereto, or which could reasonably be expected individually or in the
aggregate to result in any Material Adverse Effect.
2.11 Private Offering; Integration
-----------------------------
(a) None of the Offerors, their affiliates (as such term is
defined in Rule 501(b) under the Securities Act for any person or entity)
("Affiliates"), or any person acting on their or any of their Affiliates' behalf
has engaged, or will engage, in connection with the offering of the Preferred
Securities, in any communication or other form of general solicitation or
general advertising within the meaning of Rule 502(c) under the Securities Act.
Based upon the representations of the Investors set forth in Section 3, the
offer, issuance and sale of the Preferred Securities in the manner contemplated
by this Agreement are exempt from the registration and prospectus delivery
requirements of the Securities Act, and have been registered or qualified (or
are exempt from registration and qualification) under the registration, permit
or qualification requirements of all applicable state securities laws.
(b) The Offerors have not, directly or indirectly, solicited
any offer to buy or offered to sell, and will not, directly or indirectly,
solicit any offer to buy or offer to sell, in the United States or to any United
States citizen or resident, any security which is or would be integrated with
the sale of the Preferred Securities in a manner that would require the
Preferred Securities to be registered under the Securities Act.
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2.12 Brokerage
---------
There are no claims for brokerage commissions or finder's fees
or similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement made by or on behalf of the Company or the
Trust with any other person.
2.13 Subordination
-------------
Subordinated Debentures are subordinate and junior in right of
payment to all Senior Indebtedness (as defined in the Subordinated Debentures)
of the Company.
2.14 Liabilities
-----------
Except as set forth in Schedule 2.14, the Company and its
Subsidiaries have no liabilities or obligations of any nature (whether known or
unknown and whether absolute, accrued, contingent or otherwise) except for
liabilities or obligations reflected or reserved against in the preliminary
non-public unaudited consolidated balance sheet of the Company as at June 30,
1998 provided to each of the Investors and current liabilities incurred in the
ordinary and usual course of business consistent with the past practices of the
Company and its Subsidiaries since June 30, 1998 and that could not,
individually or in the aggregate, reasonably be expected to result in a Company
Material Adverse Effect. The Trust has no liabilities or obligations of any
nature (whether known or unknown and whether absolute, accrued, contingent or
otherwise).
2.15 Real Property
-------------
Except as otherwise disclosed in the SEC Reports and Filings,
and except as could not reasonably be expected to result in a Material Adverse
Effect (i) neither the Company nor any of its Subsidiaries owns any real
property; (ii) all of the leases under which the Company or any of its
Subsidiaries holds or uses real property or assets as a lessee are in full force
and effect, and neither the Company nor any of its Subsidiaries is in default in
respect of any of the terms or provisions of any of such leases and no claim has
been asserted by anyone adverse to any such party's rights as lessee under any
of such leases, or affecting or questioning any such party's rights to the
continued possession or use of the leased property or assets under any such
leases; and (iii) neither the Company nor any of its Subsidiaries has knowledge
of any pending or threatened condemnation, zoning change or other proceeding or
action that will in any manner affect the size or use of, improvements or
construction on or access to the leased properties of the Company or any of its
Subsidiaries.
2.16 Environmental Laws
------------------
Except as otherwise disclosed in the SEC Reports and Filings,
or as is not reasonably likely to result in a Material Adverse Effect:
(a) Each of the Company and its Subsidiaries is in compliance
with all applicable laws relating to pollution or the discharge of materials
into the environment, including common law relating to damage to property or
injury to persons ("Environmental Laws"). Each of the Company and its
Subsidiaries currently holds all governmental authorizations required under
Environmental Laws in order to conduct their businesses as described in the SEC
Reports and Filings, and none of the above has any basis to believe that any
such governmental authorization may be modified, suspended or revoked, or cannot
be renewed in the ordinary course of business;
(b) There are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without limitation,
the release, threatened release, or disposal of any material (including
radiation and noise), that could form the basis of any claim (whether by a
governmental authority or other person or entity) under Environmental Laws for
cleanup costs, damages, penalties, fines, or otherwise, against any of
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the Company or its subsidiaries, or against any person or entity whose liability
for such claim may have been retained by any of the Company or its subsidiaries,
whether by contract or law; and
(c) The Company and its Subsidiaries have made available to
the Investors and their counsel all studies, reports, assessments, audits and
other information in their possession or control relating to any pollution or
release, and, to the Company's knowledge, threatened release or disposal of
materials regulated under Environmental Laws on, at, under, from or transported
from any of their currently or formerly owned, leased or operated properties,
including, without limitation, all information relating to underground storage
tanks and asbestos containing materials.
2.17 Material Facts
--------------
This Agreement, the schedules furnished contemporaneously
herewith, and the other agreements, documents, certificates or written
statements furnished or to be furnished to the Investors, including the SEC
Reports and Filings, through the Closing Time by or on behalf of the Company in
connection with the transactions contemplated hereby, do not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained therein or herein, in light of the circumstances in
which they were made, not misleading.
2.18 Investment Company Act
----------------------
None of the Offerors is, and after giving effect to the
offering and sale of the Preferred Securities and the Subordinated Debentures,
none of the Offerors will be, an "investment company" or a "company controlled"
by an "investment company" within the meaning of the Investment Company Act of
1940, as amended (the "1940 Act").
2.19 Tax Matters
-----------
(a) The Company is taxed under subchapter C of the Code as a
corporation for United States federal income tax purposes.
(b) The Trust will be classified for United States federal
income tax purposes as a grantor trust and not as an association taxable as a
corporation.
(c) The Subordinated Debentures will be classified for United
States federal income tax purposes as indebtedness of the Company.
2.20 Reservation and Valid Issuance of Shares
----------------------------------------
The Common Shares issuable upon conversion of the Subordinated
Debentures and the Preferred Securities have been duly and validly reserved for
issuance and, upon issuance in accordance with the terms of the Indenture and
the Declaration, will be duly and validly issued, fully paid and non-assessable
and free of restrictions on transfer other than restrictions on transfer under
the Indenture and under applicable federal and state securities laws. Holders of
Common Shares shall not be personally liable as such for any liabilities, debts
or obligations of, or claims against, the Company, whether arising before or
after such holder became the owner or holder of the Common Shares.
2.21 Preferred Securities Guarantee
------------------------------
The Preferred Securities Guarantee, when taken together with
the Company's obligations under the Subordinated Debentures, the Declaration and
the Indenture, including its obligations to pay costs, expenses, debts and other
obligations of the Trust, provides a full and unconditional guarantee on a
subordinated basis by
730804.14
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the Company of amounts due on the Preferred Securities and the Subordinated
Debentures. The obligations of the Company under the Preferred Securities
Guarantee and the Subordinated Debentures are subordinate and junior in right of
payment to all present and future Senior Indebtedness (as defined in the
Indenture) of the Company.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
-----------------------------------------------
3.1 Certain Representations and Warranties
--------------------------------------
Each Investor, severally and not jointly, represents and
warrants to the Offerors as follows:
(a) It is acquiring the Preferred Securities for its own
account for investment and not with a view towards the resale, transfer or
distribution thereof, nor with any present intention of distributing the
Preferred Securities, but subject, nevertheless, to any requirement of law that
the disposition of the Investor's property shall at all times be within the
Investor's control, and without prejudice to the Investor's right at all times
to sell or otherwise dispose of all or any part of such securities under a
registration under the Securities Act or under an exemption from said
registration available under the Securities Act.
(b) It has full power and legal right to execute and deliver
this Agreement and to perform its obligations hereunder.
(c) It has taken all action necessary for the authorization,
execution, delivery, and performance of this Agreement and its obligations
hereunder, and, upon execution and delivery by the Company, this Agreement shall
constitute the valid and binding obligations of such Investor, enforceable
against such Investor in accordance with its terms, except as such enforcement
may be limited by Bankruptcy Exceptions.
(d) There are no claims for brokerage commissions or finder's
fees or similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement made by or on behalf of such Investor.
(e) It has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of its
investment in the Trust and Company as contemplated by this Agreement, and is
able to bear the economic risk of such investment for an indefinite period of
time. It has been furnished access to such information and documents as it has
requested and has been afforded an opportunity to ask questions of and receive
answers from representatives of the Company and the Trust concerning the terms
and conditions of this Agreement and the purchase of the Preferred Securities
contemplated hereby and the business and financial condition of the Company and
the Trust.
(f) It is an "accredited investor" as such term is defined in
Rule 501 under the Securities Act.
(g) It acknowledges that the Preferred Securities have not
been registered under the Securities Act and may not be offered or sold within
the United States, except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act. It has not
offered or sold, and will not offer or sell, the Preferred Securities within the
United States, except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act.
3.2 Additional Representations and Warranties
-----------------------------------------
(a) VRLP represents and warrants to the Offerors that it is a
limited partnership, duly organized, validly existing and in good standing under
the laws of the State of Delaware.
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(b) EOPLP represents and warrants to the Offerors that it is a
limited partnership, duly organized, validly existing and in good standing under
the laws of the State of Delaware.
(c) GM Trust represents and warrants to the Offerors that each
of its constituents is a trust, duly formed and validly existing under the laws
of the State of New York.
SECTION 4. COVENANTS OF THE COMPANY
------------------------
4.1 Tax Matters
-----------
(a) The Company shall continue to file tax returns under
subchapter C of the Internal Revenue Code as a corporation for federal income
tax purposes as long as any of (i) the Investors, (ii) any Affiliate of Vornado
Realty Trust or VRLP, (iii) any Affiliate of Equity Office Properties Trust or
EOPLP. or (iv) any Affiliate of the GM Trust are holders of Preferred
Securities, Subordinated Debentures or Common Shares.
(b) The Company and the Trust shall treat the Subordinated
Debentures as indebtedness for United States federal income tax purposes.
4.2 Additional Matters.
------------------
(a) The Company shall promptly notify the Investors upon the
commencement by the Company of a repurchase program of Shares, a tender offer
for its outstanding Shares or other redemption or repurchase of its outstanding
Shares.
(b) The Company shall increase the number of trustees
comprising the board of trustees of the Company to ten and fill all vacancies
created thereby by September 30, 1998 and shall not decrease such number for so
long as (i) VRLP or any Affiliate of Vornado Realty Trust or VRLP, or (ii) GM
Trust or any Affiliate of GM Trust are holders of Preferred Securities or
Subordinated Debentures.
SECTION 5. OFFERORS' CLOSING CONDITIONS
----------------------------
The obligation of the Offerors to sell the Preferred
Securities at the Closing Time, as provided in Section 1 hereof shall be subject
to:
5.1 Compliance with Agreement
-------------------------
The Investors shall have performed and complied with in all
material respects all of their obligations and conditions contained in this
Agreement which are required to be performed or complied with by the Investors
prior to or at the Closing Time.
5.2 Each Investor to Close
All of the Investors shall have purchased and paid for the
Preferred Securities at the Closing Time pursuant to Section 1 hereof.
SECTION 6. INVESTORS' CLOSING CONDITIONS
-----------------------------
The obligation of the Investors to purchase and pay for the
Preferred Securities at the Closing Time, as provided in Section 1 hereof, shall
be subject, in their discretion, to the performance by the Offerors of
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all of their agreements theretofore to be performed hereunder and to the
satisfaction, prior thereto or concurrently therewith, of the following further
conditions:
6.1 No Material Adverse Effect
--------------------------
At the Closing Time, there shall not have occurred, since
December 31, 1997, any development or event which has resulted in or could be
expected to result in a Material Adverse Effect. On or after the date hereof
there shall not have occurred any of the following: (i) a suspension or material
limitation in trading in securities generally on the New York Stock Exchange,
the American Stock Exchange or on Nasdaq; (ii) a suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by federal or New York State authorities; or (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United States
of a national emergency or war.
6.2 Representations and Warranties
------------------------------
The representations and warranties of the Offerors contained
in this Agreement shall be true and correct at and as of the Closing Time as
though such representations and warranties were made at such time (unless any
such representation and warranty is made as of a specific date and then it shall
be true and correct as of such date).
6.3 Compliance with Agreement
-------------------------
The Offerors shall have performed and complied in all material
respects with all of their obligations and conditions contained in this
Agreement which are required to be performed or complied with by the Offerors
prior to or at the Closing Time.
6.4 Officer's and Regular Trustee's Certificate
-------------------------------------------
The Investors shall have received a certificate of the Chief
Executive Officer and Chief Financial Officer of the Company, and a certificate
of Regular Trustee of the Trust, dated as of the Closing Time, to the effect
that, (i) there has been no Material Adverse Effect or development or event
which could be expected to result in a Material Adverse Effect, (ii) the
representations and warranties of the Offerors contained in this Agreement are
true and correct with the same force and effect as though expressly made at and
as of the Closing Time, and (iii) the Offerors have complied with all
obligations and satisfied all conditions on their part to be performed or
satisfied at or prior to the Closing Time, and as to such other matters as the
Investors may reasonably request.
6.5 Approval of Proceedings
-----------------------
All proceedings to be taken in connection with the
transactions contemplated by the Operative Documents, the Registration Rights
Agreement, the Co-Investment Agreement and the other Preferred Instruments and
all documents incident thereto, shall be satisfactory in form and substance to
the Investors and their counsel; and the Investors shall have received copies of
all documents or other evidence which they and such counsel may request in
connection with such transactions and of all records of corporate proceedings in
connection therewith in form and substance satisfactory to the Investors, and
their counsel.
6.6 Injunction
----------
There shall be no effective injunction, writ, preliminary
restraining order or any order of any nature issued by a court of competent
jurisdiction directing that the transactions provided for herein or in the other
Operative Documents or any of them not be consummated as herein or therein
provided.
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6.7 Additional Agreements.
---------------------
The Company and each Investor or certain Affiliates thereof
shall have entered into this Agreement, the Registration Rights Agreement and
the Co-Investment Agreement. The Company and the trustees shall have entered
into the Indenture, the Declaration and the Preferred Securities Guarantee.
6.8 Each Investor to Close
----------------------
All of the Investors shall have purchased and paid for the
Preferred Securities at the Closing Time pursuant to Section 1 hereof.
6.9 Opinions
--------
(a) The Investors shall have received an opinion of counsel,
dated as of the Closing Time, of Greenberg Glusker Fields Claman & Machtinger
LLP, in form and substance satisfactory to the Investors to the effect that:
(i) The Company has been duly created and is validly
existing as a business trust under the laws of the State of California
with the trust power and authority to own its properties and conduct
its business as described in the SEC Reports and Filings.
(ii) The Indenture, this Agreement, the Registration
Rights Agreement and the Co-Investment Agreement have been duly
authorized by the Company and have been duly executed and delivered by
the Company, and constitute valid and legally binding obligations of
the Company and are enforceable against the Company in accordance with
their terms, subject, as to enforcement, to (i) Bankruptcy Exceptions,
and (ii) the effect of applicable public policy on the enforceability
of provisions relating to indemnification and contribution in the case
of the Indenture, this Agreement and the Registration Rights Agreement.
(iii) The Preferred Securities Guarantee has been
duly authorized by the Company, has been duly executed and delivered by
the Company and, constitutes a valid and legally binding obligation of
the Company, enforceable against the Company in accordance with its
terms, except to the extent that enforcement thereof may be limited by
Bankruptcy Exceptions.
(iv) The Subordinated Debentures have been duly
authorized, executed, issued and delivered by the Company, when duly
authenticated by the Trustee and delivered against payment therefor,
will constitute the valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their
terms, except to the extent that enforcement thereof may be limited by
the Bankruptcy Exceptions.
(v) The Common Shares issuable upon the conversion of
the Subordinated Debentures and/or the Preferred Securities have been
duly authorized and reserved for issuance in accordance with the terms
of the Subordinated Debentures, the Indenture and the Declaration; such
Common Shares, when issued and delivered upon such conversion in
accordance with the terms of the Subordinated Debentures and the
Indenture and the Declaration, will be validly issued, fully paid and
non-assessable; and, as of the date hereof, the issuance of such Common
Shares upon the conversion of the Subordinated Debentures and/or the
Preferred Securities is not subject to any preemptive or similar
rights. Holders of Common Shares shall not be personally liable as such
for any liabilities, debts or obligations of, or claims against, the
Company, whether arising before or after such holder became the owner
or holder of the Common Shares.
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In rendering such opinion, such counsel may rely as to matters
involving the application of laws other than the laws of California and the
federal law of the United States, to the extent they deem proper and specified
in such opinion, upon the opinion of Richards, Layton & Finger, P.A. and Battle
Fowler LLP.
(b) The Investors shall have received an opinion of counsel,
dated as of the Closing Time, of Richards, Layton & Finger, P.A. in form set
forth in Exhibit C hereto.
In rendering such opinion, such counsel may rely as to matters
involving the application of laws other than the laws of Delaware and federal
law of the United States, to the extent they deem proper and specified in such
opinion, upon the opinion of Greenberg Glusker Fields Claman & Machtinger LLP
and Battle Fowler LLP.
(c) The Investors shall have received an opinion of counsel,
dated as of the Closing Time, of Battle Fowler LLP, in form and substance
satisfactory to the Investors, to the effect that:
(i) The Company is duly qualified to transact
business in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified would not have
a Material Adverse Effect. The Company is not required to make any
submissions or filings with any state in order to maintain its valid
existence or good standing.
(ii) The execution, delivery and performance of the
Operative Documents, the Registration Rights Agreement and the
Co-Investment Agreement and the issuance and delivery of the Preferred
Instruments and the consummation of the transactions contemplated
herein and therein, and the compliance by each of the Offerors with
their respective obligations hereunder and thereunder, do not and will
not conflict with, result in a breach or violation of, or constitute a
default under the Organizational Documents of the Company or any
Subsidiary or the terms of any Key Agreement and Instrument known to
such counsel and to which the Company or any Subsidiary is a party or
bound, or result in a violation of any Requirement of Law known to such
counsel to be applicable to the Company or any Subsidiary.
(iii) There is no claim, suit, action or legal,
administrative, arbitration or other proceeding or governmental
investigation pending, or threatened, against the Company, the Company
is not a target or subject of any pending or threatened criminal
investigation or proceeding, and the Company is not the subject of any
order, judgment, stipulation or decree, which has not been subsequently
reversed, suspended, vacated or satisfied.
(iv) All legally required proceedings in connection
with the authorization, issuance and validity of the Preferred
Securities and the sale of the Preferred Securities in accordance with
this Agreement (other than the filing of post-issuance reports, the
non-filing of which would not render the Preferred Securities invalid)
have been taken and all legally required orders, consents or other
authorizations or approvals of any public boards or bodies in
connection with the authorization, issuance and the sale of the
Preferred Securities in accordance with this Agreement (other than in
connection with or in compliance with the provisions of the securities
laws of any jurisdictions, as to which no opinion need be expressed)
have been obtained and are in full force and effect.
(v) Based solely upon the factual representations and
warranties made by the Offerors and the Investors in the Purchase
Agreement, the offer, issue, sale and delivery of the Preferred
Securities in the manner contemplated in the Purchase Agreement does
not require registration under the Securities Act.
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(vi) Neither the Company nor the Trust are, and after
giving effect to the purchase and sale of the Subordinated Debentures
and the Preferred Securities, neither of them will be, required to
register as an investment company under the 1940 Act.
In rendering such opinion, such counsel may rely as to matters
involving the application of laws other than the laws of New York and federal
law of the United States, to the extent they deem proper and specified in such
opinion, upon the opinion of Greenberg Glusker Fields Claman & Machtinger LLP
and Richards, Layton & Finger, P.A.
(d) The Investors shall receive an opinion of Battle Fowler
LLP, special tax counsel to the Offerors, in form and substance satisfactory to
the Investors to the effect that:
(i) based on current law and the assumptions stated
or referred to therein, the Subordinated Debentures will be classified
for United States federal income tax purposes as indebtedness of the
Company, and
(ii) the Trust will be classified for United States
federal income tax purposes as a grantor trust and not as an
association taxable as a corporation.
Such opinion may be conditioned on, among other things, the
initial and continuing accuracy of the facts, financial and other information,
covenants and representations set forth in certificates of officers of the
Company and the Trust and other documents deemed necessary for such opinion.
SECTION 7. INDEMNIFICATION
---------------
7.1 Indemnification Generally
-------------------------
The Offerors on the one hand, and each Investor, on the other
hand (each an "Indemnifying Party"), shall indemnify the other from and against
any and all losses, damages, liabilities, claims, charges, actions, proceedings,
demands, judgments, settlement costs and expenses of any nature whatsoever
(including, without limitation, attorneys' fees and expenses) or deficiencies
resulting from any breach of a representation, warranty or covenant by the
Indemnifying Party and all claims, charges, actions or proceedings incident to
or arising out of the foregoing. Except with respect to third party claims being
defended in good faith or claims for indemnification with respect to which there
exists a good faith dispute, the Indemnifying Party shall satisfy its
obligations hereunder within thirty (30) days of receipt of a notice of claim
under this Section 7.1.
7.2 Indemnification Procedures for Third Party Claims
-------------------------------------------------
If a claim by a third party is made against a Person entitled
to indemnification under this Section (an "Indemnified Party") and such
Indemnified Party intends to seek indemnity with respect thereto from any
Indemnifying Party, such Indemnified Party shall give notice in writing as
promptly as reasonably practicable to each such Indemnifying Party of any action
commenced against or by it in respect of which indemnity may be sought
hereunder, but failure to so notify an Indemnified Party shall not relieve such
Indemnifying Party from any liability that it may have otherwise than on account
of this indemnity agreement so long as such failure shall not have materially
prejudiced the position of the Indemnifying Party. Upon such notification, the
Indemnifying Party shall assume the defense of such action brought by a third
party, and after such assumption the Indemnified Party shall not be entitled to
reimbursement of any expenses incurred by it in connection with such action
except as described below. In any such action, any Indemnified Party shall have
the right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless (i) the Indemnifying
Party shall have failed to promptly assume and thereafter vigorously conduct
such defense, (ii) the Indemnifying Party and the Indemnified Party shall have
mutually
730804.14
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<PAGE>
agreed to the contrary or (iii) the named parties in any such action (including
any impleaded parties) include both the Indemnifying Party and the Indemnified
Party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing or conflicting interests
between them. No Indemnifying Party, in the defense of a third party claim
shall, except with the consent of the Indemnifying Party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect of such claim. The
Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent (which shall not be unreasonably withheld
or delayed by such Indemnifying Party), but if settled with such consent or if
there be final judgment for the plaintiff, the Indemnifying Party shall
indemnify the Indemnified Party from and against any loss, damage or liability
by reason of such settlement or judgment.
SECTION 8. INTERPRETATION OF THIS AGREEMENT
--------------------------------
8.1 Terms Defined
-------------
As used in this Agreement, the following terms have the
respective meanings set forth below or set forth in the Section hereof following
such term:
Affiliates: shall have the meaning set forth in Section
2.11(a).
Bankruptcy Exceptions: shall have the meaning set forth in
Section 2.6(b).
Business Day: shall mean a day other than a Saturday, Sunday
or other day on which banking institutions in New York, New York are permitted
or required by any applicable law to close.
Certificate of Trust: shall mean the organizational document
filed on July 28, 1998 in Delaware with respect to the Trust.
Code: shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
Closing: shall mean the consummation of the purchase and sale
of the Preferred Securities described in Section 1(a).
Closing Time: shall have the meaning set forth in Section
1(b).
Co-Investment Agreement: shall mean the co-investment
agreement in the form attached hereto as Exhibit B.
Company: shall have the meaning set forth in the preamble
hereof.
Company Material Adverse Effect: shall have the meaning set
forth in Section 2.3(b).
Declaration: shall have the meaning set forth in the
preliminary statement hereof.
Delaware Act: shall have the meaning set forth in the
preliminary statement hereof.
Environmental Laws: shall have the meaning set forth in
Section 2.16(a).
EOPLP: shall have the meaning set forth in the preamble
hereof.
730804.14
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<PAGE>
Financial Statements: shall have the meaning set forth in
Section 2.3(a).
GAAP: shall have the meaning set forth in Section 2.3(a).
GM Trust: shall have the meaning set forth in the preamble
hereof.
Governmental Authority: shall mean any nation or government,
any state or other political subdivision thereof, and any department, agency,
instrumentality, bureau, entity or official exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
Indemnified Party: shall have the meaning set forth in Section
7.2.
Indemnifying Party: shall have the meaning set forth in
Section 7.1.
Indenture: shall have the meaning set forth in the preliminary
statement hereof.
Investors: shall have the meaning set forth in the preamble
hereof.
Key Agreements and Instruments: shall mean as to any Person
any indenture, mortgage, deed of trust, credit agreement, note or other evidence
of indebtedness, or other material agreement or instrument to which such Person
is a party or by which it is bound or, to which any of its property or assets is
subject.
Material Adverse Effect: shall have the meaning set forth in
Section 2.3(b).
1940 Act: shall have the meaning set forth in Section 2.18.
Offerors: shall have the meaning set forth in the preamble
hereof.
Operative Documents: shall have the meaning set forth in the
preliminary statement hereof.
Organizational Documents: shall mean as to any Person the
articles or certificate of incorporation, declaration of trust, bylaws,
partnership agreement or other organizational or governing documents of such
Person.
Person: shall mean an individual, partnership, corporation,
trust or unincorporated organization, and a government or agency or political
subdivision thereof.
Preferred Instruments: shall have the meaning set forth in the
preliminary statement hereof.
Preferred Securities: shall have the meaning set forth in the
preliminary statement hereof.
Preferred Securities Guarantee: shall have the meaning set
forth in the preliminary statement hereof.
Registration Rights Agreement: shall mean the registration
rights agreement in the form attached hereto as Exhibit A.
Requirements of Law: means as to any Person, any domestic or
foreign and federal, state or local law, rule, regulation, statute or ordinance
or judgment, order, decree or determination of any arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its properties or to which such Person or any of its property
is subject.
730804.14
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<PAGE>
SEC Reports and Filings: shall have the meaning set forth in
Section 2.2(a).
Share: shall mean a beneficial interest in the Company.
Subordinated Debentures: shall have the meaning set forth in
the preliminary statement hereof.
Subsidiary or Subsidiaries: shall have the meaning set forth
in Section 2.5.
Trust: shall have the meaning set forth in the preamble
hereof.
Trust Material Adverse Effect: shall have the meaning set
forth in Section 2.3(b).
VRLP: shall have the meaning set forth in the preamble hereof.
8.2 Governing Law
-------------
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to its
principles of conflicts of law.
8.3 Paragraph and Section Headings
------------------------------
The headings of the sections and subsections of this Agreement
are inserted for convenience only and shall not be deemed to constitute a part
thereof.
SECTION 9. MISCELLANEOUS
-------------
9.1 Expenses
--------
Each party to this Agreement shall bear its own respective
costs and expenses incurred in connection with the preparation, execution and
delivery of this Agreement and the agreements and transactions contemplated
hereby.
9.2 Notices. All notices or other communications under this
Agreement shall be sufficient if in writing and delivered by hand or sent by
telecopy, or sent, postage prepaid by registered, certified or express mail, or
by recognized overnight air courier service and shall be deemed given when so
delivered by hand or telecopied, or if mailed or sent by overnight courier
service, on the third (3rd) Business Day after mailing (one Business Day in the
case of express mail or overnight courier service) to the parties at the
following addresses:
(a) if to the Investors, to:
Vornado Realty L.P.
c/o Vornado Realty Trust
Park 80 West, Plaza II
Saddle Brook, New Jersey 07663
Attention: Joseph Macnow
Executive Vice President,
Finance and Administration
730804.14
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<PAGE>
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Alan J. Sinsheimer
EOP Operating Limited Partnership
Two North Riverside Plaza
Chicago, Illinois 60606
Attention: Stanley M. Stevens
Richard D. Kincaid
with a copy to:
Rosenberg & Liebentritt, P.C.
Two North Riverside Plaza, Suite 1600
Chicago, Illinois 60606
Attention: Jonathan Wasserman
Mellon Bank N.A., as trustee for
General Motors Hourly-Rate Employes Pension Trust
Mellon Bank N.A., as trustee for
General Motors Salaried Employes Pension Trust
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258-0001
Attention: Bernadette Rist,
Legal Department
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Gerald S. Backman, P.C.
(b) if to the Company, to:
Capital Trust
605 Third Avenue
26th Floor
New York, New York 10016
Attention: John R. Klopp
with a copy to:
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attention: Thomas E. Kruger
730804.14
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<PAGE>
(c) if to the Trust, to:
CT Convertible Trust I
c/o Capital Trust
605 Third Avenue
26th Floor
New York, New York 10016
Attention: John R. Klopp
with a copy to:
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attention: Thomas E. Kruger
or at such other address as the addressee may have furnished in writing to the
sender as provided herein.
9.3 Survival
--------
All warranties, representations, and covenants made by the
Investors and the Offerors herein or in any certificate or other instrument
delivered by the Investors or the Offerors under this Agreement shall be
considered to have been relied upon by the Offerors or the Investors, as the
case may be, and shall survive all deliveries to the Investors of the Preferred
Securities, or payment by the Investors for such Preferred Securities,
regardless of any investigation made by the Offerors or the Investors, as the
case may be, or on the Offerors' or the Investors' behalf. All statements in any
such certificate or other instrument shall constitute warranties and
representations by the Offerors or the Investors, as the case may be, hereunder.
9.4 Entire Agreement; Amendment and Waiver
--------------------------------------
This Agreement shall inure to the benefit of and shall be
binding upon the successors and assigns of each of the parties. This Agreement
and the agreements attached as Exhibits hereto constitute the entire
understandings of the parties hereto and supersede all prior agreements or
understandings with respect to the subject matter hereof between such parties.
This Agreement may be amended, and the observance of any term of this Agreement
may be waived, with (and only with) the written consent of the Offerors and the
Investors.
9.5 Counterparts
------------
This Agreement may be executed in one or more counterparts
with the same effect as if the parties executing the counterparts had each
executed one instrument as of the day and year first above written.
9.6 Successors and Assigns
----------------------
This Agreement and all of the provisions hereof, including all
of the rights of the Investors hereunder, shall inure to the benefit of the
parties hereto and their respective successors and assigns.
[The rest of this page intentionally left blank]
730804.14
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
OFFERORS:
CAPITAL TRUST
By: /s/ John R. Klopp
---------------------------------------------
Name: John R. Klopp
Title: Chief Executive Officer
CT CONVERTIBLE TRUST I
By: /s/ John R. Klopp
---------------------------------------------
Name: John R. Klopp
Title: Regular Trustee
INVESTORS:
EOP OPERATING LIMITED PARTNERSHIP
By: Equity Office Properties Trust,
its general partner
By: /s/ Debra L. Ferruzzi
-------------------------------------------
Name: Debra L. Ferruzzi
Title: Senior Vice President
VORNADO REALTY L.P.
By: Vornado Realty Trust,
its general partner
By: /s/ Michael D. Fascitelli
----------------------------------------
Name: Michael D. Fascitelli
Title: President
MELLON BANK N.A., as trustee for
General Motors Hourly-Rate Employes Pension Trust
By: /s/ Bernadette Rist
---------------------------------------------
Name: Bernadette Rist
Title: Authorized Signatory
730804.14
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<PAGE>
MELLON BANK N.A., as trustee for
General Motors Salaried Employes Pension Trust
By: /s/ Bernadette Rist
---------------------------------------------
Name: Bernadette Rist
Title: Authorized Signatory
730804.14
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<PAGE>
Schedule 2.3(b)
---------------
Company Financial Statements; Material Adverse Changes
(1) Two (2) revolving credit facilities in the aggregate principal amount
of up to $300,000,000, made by (i) Morgan Stanley Mortgage Capital Inc.
("MSMCI"), pursuant to a certain Master Loan Agreement dated as of June
8, 1998, between the Company and MSMCI, and (ii) Morgan Stanley & Co.
International Limited ("MSIL"), pursuant to a certain CMBS Loan
Agreement dated as of June 30, 1998, between the Company and MSIL.
(2) Increases of a certain credit facility ("GACC Credit Facility") made by
German American Capital Corporation ("GACC") to the Company, pursuant
to a certain Credit Agreement dated as of September 30, 1997, between
the Company and GACC, in the original maximum principal amount of
$150,000,000, pursuant to the terms and provisions of:
(i) a certain Amended and Restated Credit Agreement, dated as of
January 1, 1998, between the Company and GACC, whereby the
maximum principal amount of the GACC Credit Facility was
increased from $150,000,000 to $250,000,000;
(ii) a certain First Amendment to Amended and Restated Credit
Agreement, dated as of June 22, 1998, between the Company
and GACC, whereby the maximum principal amount of the GACC
Credit Facility was increased from $250,000,000 to
$300,000,000; and
(iii) a certain Second Amendment to Amended and Restated Credit
Agreement, dated as of July 23, 1998, between the Company
and GACC, whereby the maximum principal amount of the GACC
Credit Facility was increased from $300,000,000 to
$360,000,000.
730804.14
<PAGE>
Schedule 2.6(a)
---------------
Agreements of the Trust
NONE
730804.14
<PAGE>
Schedule 2.14
-------------
Liabilities
Capital Trust Balance Sheet Adjustments
---------------------------------------
(July 23, 1998 - $000s)
Significant asset and liability adjustments to 6/30/98 preliminary unaudited
Capital Trust balance sheet as of 7/23/98:
Assets
Sale of CSFB floating rate CMBS ($23,978)
Satisfaction of Troast loan (10,738)
Addition of Buffalo loan 23,000
Funding of improvements under Wanamaker loan 2,510
Cash and other assets (1) (6,100)
----------------------
Total ($15,306)
======================
Liabilities
Repayment of CSFB repo ($23,244)
Satisfaction of Troast borrowings (10,000)
Principal re-payment on VCG notes (500)
Principal re-payment under FNMA repo (582)
Buffalo borrowing (Morgan Stanley) 19,000
----------------------
Total ($15,306)
======================
(1) Includes estimates to balance the Balance Sheet.
730804.14
<PAGE>
EXHIBIT C
---------
July 28, 1998
To Each of the Persons Listed
on Schedule I Hereto
Re: CT Convertible Trust I
----------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for CT Convertible
Trust I, a Delaware business trust (the "Trust"), in connection with the matters
set forth herein. This opinion is being furnished to you pursuant to Section
6.9(b) of the Preferred Securities Purchase Agreement dated as of July 28, 1998
(the "Purchase Agreement") among Capital Trust, a California business trust (the
"Company"), the Trust, Vornado Realty L.P., a Delaware limited partnership, EOP
Operating Limited Partnership, a Delaware limited partnership, Mellon Bank,
N.A., as trustee for General Motors Hourly-Rate Employes Pension Trust, a New
York trust, and Mellon Bank N.A., as trustee for General Motors Salaried
Employes Pension Trust, a New York trust. Capitalized terms used and not
otherwise defined herein shall have the meaning ascribed to such terms in the
Declaration (as hereinafter defined).
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated July 28, 1998
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on July 28, 1998;
<PAGE>
To Each of the Persons Listed
on Schedule I Hereto
July 28, 1998
Page 2
(b) The Declaration of Trust of the Trust, dated as of July
28, 1998, among Capital Trust, as sponsor, the Trustee and the holders, from
time to time, of undivided beneficial interests in the Trust to be issued
pursuant to the Declaration.;
(c) The Purchase Agreement;
(d) The Indenture;
(e) The Preferred Securities Guarantee Agreement;
(f) The Common Securities Guarantee Agreement; and
(g) A Certificate of Good Standing for the Trust, dated
July 28, 1998, obtained from the Secretary of State.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a) through (g) above.
In particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (g) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to be
true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed
(i) the authenticity of all documents submitted to us as authentic originals,
(ii) the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed that (i) the
Declaration and the Certificate of Trust are in full force and effect and have
not been amended, (ii) except to the extent provided in paragraph 1 below, each
of the parties to the documents examined by us has been duly organized or duly
formed, as the case may be, and is validly existing in good standing under the
laws of the jurisdiction governing its organization or formation, (iii) each
natural person who is a party to the documents examined by us has the legal
capacity to execute, deliver and perform such documents, (iv) except to the
extent provided
<PAGE>
To Each of the Persons Listed
on Schedule I Hereto
July 28, 1998
Page 3
in paragraph 4 below, each of the parties to the documents examined by us has
the power and authority to execute and deliver, and to perform its obligations
under, such documents, (v) except to the extent provided in paragraph 5 below,
each of the parties to the documents examined by us has duly authorized,
executed and delivered such documents, (vi) each Person to whom a Convertible
Preferred Security or a Common Security is to be issued by the Trust (each, a
"Holder" and collectively, the "Holders") has received an appropriate
Certificate for such Security, and the Trust has received payment for the
Security acquired by each such Holder, in accordance with the Declaration and
the Prospectus, and (vii) the Securities are issued and sold to the Holders in
accordance with the Declaration and the Purchase Agreement.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Business Trust Act, and all filings
required under the laws of the State of Delaware with respect to the creation
and valid existence of the Trust as a business trust have been made.
2. Under the Business Trust Act and the Declaration, the
Trust has the business trust power and authority to own property and conduct its
business, all as described in the Declaration.
3. The Declaration constitutes a valid and binding obligation
of the Company and the Trustees and is enforceable against the Company and the
Trustees, in accordance with its terms.
<PAGE>
To Each of the Persons Listed
on Schedule I Hereto
July 28, 1998
Page 4
4. Under the Business Trust Act and the Declaration, the
Trust has the trust power and authority to (i) execute and deliver, and to
perform its obligations under the Purchase Agreement and (ii) issue and perform
its obligations under the Securities.
5. Under the Business Trust Act and the Declaration, the
execution and delivery by the Trust of the Purchase Agreement, and the
performance by the Trust of its obligations thereunder, have been duly
authorized by all necessary action on the part of the Trust. The Purchase
Agreement has been duly authorized, executed and delivered by the Trust.
6. The Convertible Preferred Securities have been duly
authorized by the Declaration and are duly and validly issued and, subject to
the qualifications set forth herein, fully paid and nonassessable undivided
beneficial interests in the assets of the Trust, entitled to the benefits of the
Declaration. The Holders of the Convertible Preferred Securities and Common
Securities, as beneficial owners of the Trust, will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware. We note that the Holders of the Convertible Preferred Securities
may be obligated to make payments as set forth in the Declaration.
7. The Common Securities have been duly authorized by the
Declaration and are duly and validly issued and, subject to the qualifications
set forth herein, fully paid and represent undivided beneficial interests in the
assets of the Trust, entitled to the benefits of the Declaration.
8. Under the Business Trust Act and the Declaration, the
issuance of the Securities is not subject to preemptive rights.
9. The purchase by the Trust of the Debentures, the
distribution of the Debentures by the Trust in the circumstances contemplated by
the Declaration, the execution, delivery and performance by the Trust of the
Purchase Agreement and the Registration Rights Agreement, the consummation by
the Trust of the transactions contemplated thereby and compliance by the Trust
with its obligations thereunder will not violate, conflict with or result in a
breach of (i) any of the provisions of the Certificate of Trust or the
Declaration or (ii) any applicable Delaware law or administrative regulation.
<PAGE>
To Each of the Persons Listed
on Schedule I Hereto
July 28, 1998
Page 5
The opinion expressed in paragraph 3 above regarding the
enforceability of the Declaration is subject to (i) bankruptcy, insolvency,
moratorium, receivership, reorganization, liquidation, fraudulent transfer and
other similar laws relating to or affecting the rights and remedies of creditors
generally, (ii) principles of equity, including applicable law relating to
fiduciary duties (regardless of whether considered and applied in a proceeding
in equity or at law), and (iii) the effect of applicable public policy on the
enforceability of provisions relating to indemnification or contribution.
This opinion may be relied upon by you in connection with the
matters set forth herein. We also consent to Greenberg Glusker Fields Claman &
Machtinger LLP and Battle Fowler LLC relying as to matters of Delaware law upon
this opinion in connection with opinions to be rendered by them pursuant to the
Purchase Agreement. Except as stated above, without our prior written consent,
this opinion may not be furnished or quoted to, or relied upon by, any other
Person for any purpose.
Very truly yours,
/S/ Richards, Layton & Finger, P.A.
-------------------------------
GCK/ks
<PAGE>
Schedule I
Vornado Realty L.P.
EOP Operating Limited Partnership
Mellon Bank N.A., as trustee for
General Motors Hourly-Rate Employes Pension Trust
Mellon Bank N.A., as trustee for
General Motors Salaried Employes Pension Trust
<PAGE>
EXHIBIT 4.3
DECLARATION OF TRUST
CT CONVERTIBLE TRUST I
DATED AS OF July 28, 1998
727341.10
<PAGE>
TABLE OF CONTENTS
Page
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE I INTERPRETATION AND DEFINITIONS......................................................... 1
SECTION 1.1. Definitions.......................................................... 1
ARTICLE II TRUST INDENTURE ACT.................................................................... 7
SECTION 2.1. Trust Indenture Act: Application..................................... 7
SECTION 2.2. Lists of Holders of Securities....................................... 7
SECTION 2.3. Reports by the Institutional Trustee................................. 7
SECTION 2.4. Periodic Reports to Institutional Trustee............................ 8
SECTION 2.5. Evidence of Compliance with Conditions Precedent..................... 8
SECTION 2.6. Events of Default; Waiver............................................ 8
SECTION 2.7. Event of Default; Notice............................................. 9
ARTICLE III ORGANIZATION.......................................................................... 10
SECTION 3.1. Name................................................................ 10
SECTION 3.2. Office.............................................................. 10
SECTION 3.3. Purpose............................................................. 10
SECTION 3.4. Authority........................................................... 10
SECTION 3.5. Title to Property of the Trust...................................... 11
SECTION 3.6. Powers and Duties of the Regular Trustees........................... 11
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees................ 13
SECTION 3.8. Powers and Duties of the Institutional Trustee...................... 14
SECTION 3.9. Certain Duties and Responsibilities of the Institutional Trustee.... 15
SECTION 3.10. Certain Rights of Institutional Trustee............................. 17
SECTION 3.11. Delaware Trustee.................................................... 19
SECTION 3.12. Execution of Documents.............................................. 19
SECTION 3.13. Not Responsible for Recitals or Issuance of Securities.............. 19
SECTION 3.14. Duration of Trust................................................... 19
SECTION 3.15. Mergers............................................................. 19
ARTICLE IV SPONSOR............................................................................... 20
SECTION 4.1. Sponsor's Purchase of Common Securities............................. 20
SECTION 4.2. Responsibilities of the Sponsor..................................... 21
ARTICLE V TRUSTEES.............................................................................. 21
SECTION 5.1. Number of Trustees.................................................. 21
SECTION 5.2. Delaware Trustee.................................................... 21
SECTION 5.3. Institutional Trustee; Eligibility.................................. 22
SECTION 5.4. Certain Qualifications of Regular Trustees and Delaware Trustee
Generally........................................................... 22
SECTION 5.5. Regular Trustees.................................................... 22
SECTION 5.6. Appointment, Removal and Resignation of Trustees.................... 23
SECTION 5.7. Vacancies Among Trustees............................................ 24
SECTION 5.8. Effect of Vacancies................................................ 24
SECTION 5.9. Meetings............................................................ 24
SECTION 5.10. Delegation of Power................................................. 24
SECTION 5.11. Merger, Conversion, Consolidation or Succession to Business......... 25
ARTICLE VI DISTRIBUTIONS......................................................................... 25
SECTION 6.1. Distributions....................................................... 25
727341.10
-i-
<PAGE>
Page
ARTICLE VII ISSUANCE OF SECURITIES................................................................ 25
SECTION 7.1. General Provisions Regarding Securities............................. 25
SECTION 7.2. Execution and Authentication........................................ 26
SECTION 7.3. Form and Dating..................................................... 26
SECTION 7.4. Paying Agent........................................................ 27
ARTICLE VIII TERMINATION OF TRUST.................................................................. 27
SECTION 8.1. Termination of Trust................................................ 27
ARTICLE IX TRANSFER OF INTERESTS................................................................. 28
SECTION 9.1. Transfer of Securities.............................................. 28
SECTION 9.2. Transfer of Certificates............................................ 31
SECTION 9.3. Deemed Security Holders............................................. 31
SECTION 9.4. Mutilated, Destroyed, Lost or Stolen Certificates.................. 31
ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS.................................................................... 32
SECTION 10.1. Liability........................................................... 32
SECTION 10.2. Exculpation......................................................... 32
SECTION 10.3. Fiduciary Duty...................................................... 32
SECTION 10.4. Indemnification..................................................... 33
SECTION 10.5. Outside Business.................................................... 35
ARTICLE XI ACCOUNTING............................................................................ 36
SECTION 11.1. Fiscal Year......................................................... 36
SECTION 11.2. Certain Accounting Matters.......................................... 36
SECTION 11.3. Banking............................................................. 37
SECTION 11.4. Withholding......................................................... 37
ARTICLE XII AMENDMENTS AND MEETINGS............................................................... 37
SECTION 12.1. Amendments.......................................................... 37
SECTION 12.2. Meetings of the Holders of Securities; Action by Written Consent.... 39
ARTICLE XIII REPRESENTATIONS OF SPONSOR, INSTITUTIONAL TRUSTEE AND
DELAWARE TRUSTEE...................................................................... 40
SECTION 13.1. Representations and Warranties of Institutional Trustee............. 40
SECTION 13.2. Representations and Warranties of Delaware Trustee.................. 41
ARTICLE XIV MISCELLANEOUS......................................................................... 42
SECTION 14.1. Notices............................................................ 42
SECTION 14.2. Governing Law....................................................... 43
SECTION 14.3. Intention of the Parties............................................ 43
SECTION 14.4. Headings............................................................ 43
SECTION 14.5. Successors and Assign............................................... 43
SECTION 14.6. Partial Enforceability.............................................. 43
SECTION 14.7. Counterparts........................................................ 44
</TABLE>
727341.10
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CROSS-REFERENCE TABLE*
Section of Trust Indenture Act Section of
of 1939, as amended Declaration
310(a)................................................ 5.3(a)
310(c)................................................ Inapplicable
311(c)................................................ Inapplicable
312(a)................................................ 2.2(a)
312(b)................................................ 2.2(b)
313................................................... 2.3
314(a)................................................ 2.4
314(b)................................................ Inapplicable
314(c)................................................ 2.5
314(d)................................................ Inapplicable
314(f)................................................ Inapplicable
315(a)................................................ 3.9(b)
315(c)................................................ 3.9(a)
315(d)................................................ 3.9(b)
316(a)................................................ Annex I
316(c)................................................ 3.6(e)
- -----------------
* This Cross-Reference table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
727341.10
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<PAGE>
DECLARATION OF TRUST
OF
CT CONVERTIBLE TRUST I
July 28, 1998
DECLARATION OF TRUST ("Declaration") dated and effective as of July 28,
1998, by the Trustees (as defined herein), the Sponsor (as defined herein) and
by the holders, from time to time, of undivided beneficial interests in the
Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established CT
Convertible Trust I (the "Trust"), a trust under the Business Trust Act (as
defined herein), pursuant to a Certificate of Trust filed with the Secretary of
State of the State of Delaware on July 28, 1998, for the sole purpose of issuing
and selling certain securities representing undivided beneficial interests in
the assets of the Trust and investing the proceeds thereof in certain Debentures
(as defined herein) of the Debenture Issuer (as defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been
issued; and
WHEREAS, all of the Trustees and the Sponsor desire to adopt this
Declaration;
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitutes the governing instrument of such business trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and Exhibits of
or to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
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"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent or Conversion Agent.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Business Day" means any day other than a Saturday, Sunday or any other
day on which banking institutions in New York, New York or Wilmington, Delaware
are permitted or required by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code ss. 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, units representing interests, participations, rights in or other
equivalents (however designated) of such Person's capital stock, including, with
respect to partnerships and business trusts, partnership interests (whether
general or limited), beneficial interests and any other interest or
participation that confers upon a Person the right to receive a share of the
profits and losses of, or distributions of assets of, such partnership or
business trust, and any rights (other than debt securities convertible into
capital stock), warrants or options exchangeable for or convertible into such
capital stock.
"Certificate" means a Common Security Certificate or a Convertible
Preferred Security Certificate.
"Closing Date" means July 28, 1998.
"Closing Price" has the meaning specified in Annex I.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities Guarantee" means the guarantee agreement to be dated
as of July 28, 1998 of the Sponsor in respect of the Common Securities.
"Common Security" has the meaning specified in Section 7.1.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Common Shares" means the class A common shares of beneficial interest,
$1.00 par value, in Capital Trust, a California business trust, and any other
shares of beneficial interest as may constitute "Common Shares" under the
Indenture.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Conversion Agent" has the meaning specified in Section 7.4.
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"Convertible Preferred Securities Guarantee" means the guarantee
agreement to be dated as of July 28, 1998, of the Sponsor in respect of the
Convertible Preferred Securities.
"Convertible Preferred Security" has the meaning specified in Section
7.1.
"Convertible Preferred Security Certificate" means a certificate
representing a Preferred Security substantially in the form of Exhibit A-1.
"Corporate Trust Office" means the office of the Institutional Trustee
at which the corporate trust business of the Institutional Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at 1100 North Market Street, 9th Floor,
Wilmington, Delaware 19890-0001, Attention Corporate Trust Administration.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Capital Trust, a California business trust, in
its capacity as issuer of the Debentures under the Indenture.
"Debenture Trustee" means Wilmington Trust Company, as trustee under
the Indenture until a successor is appointed thereunder, and thereafter means
such successor trustee.
"Debentures" means the series of Debentures in the aggregate principal
amount of $154,650,000 to be issued by the Debenture Issuer under the Indenture
to be held by the Institutional Trustee, a specimen certificate for such series
of Debentures being Exhibit B.
"Delaware Trustee" has the meaning set forth in Section 5.1.
"Direct Action" has the meaning set forth in Section 3.8.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1.
"EOPLP" means EOP Operating Limited Partnership, a Delaware limited
partnership.
"Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Fiscal Year" has the meaning set forth in Section 11.1.
"GM Trusts" means Mellon Bank N.A., as trustee for General Motors
Corporation Hourly-Rate Employes Pension Trust, a New York trust, and Mellon
Bank N.A., as trustee for General Motors Salaried Employes Pension Trust, a New
York trust.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
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"Indemnified Person" means each Company Indemnified Person and each
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of July 28, 1998 between the
Debenture Issuer and the Debenture Trustee.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Liquidated Distribution" has the meaning specified in the terms of the
Securities as set forth in Annex I.
"List of Holders" has the meaning set forth in Section 2.2.
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Convertible Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a single
class or, as the context may require, Holders of outstanding Convertible
Preferred Securities or Holders of outstanding Common Securities voting
separately as a class, who are the record owners of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"Non-U.S. Person" means a Person other than a U.S. person (as such term
is defined in Regulation S).
"Offeror" has the meaning set forth in Section 9.1(e).
"Offered Securities" means the Convertible Preferred Securities, the
Convertible Preferred Securities Guarantee, the Debentures and the Common Shares
issuable upon conversion of the Debentures.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Certificate has read the
covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
727341.10
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(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
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 officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Payment Amount" has the meaning set forth in Section 6.1.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, limited liability company, trust,
unincorporated association, or government or any agency or political subdivision
thereof, or any other entity of whatever nature.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Quorum" means a majority of the Regular Trustees or, if there are only
two Regular Trustees, both of them.
"Paying Agent" has the meaning set forth in Section 3.8(h).
"Payment Amount" has the meaning set forth in Section 6.1.
"Regular Trustee" has the meaning set forth in Section 5.1.
"Regulation S" means Regulation S under the Securities Act or any
successor provision.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly-owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional Trustee,
any officer within the Corporate Trust Office of the Institutional Trustee,
including any vice president, any assistant vice president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above-designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Restricted Security" has the meaning specified in Section 9.1(d).
"Rule 144A" means Rule 144A as promulgated under the Securities Act, or
any successor rule.
"Rule 144(k)" means Rule 144(k) as promulgated under the Securities
Act, or any successor rule.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act or any
successor rule.
"Sales Notice" has the meaning set forth in Section 9.1(e).
"Securities" means the Common Securities and the Convertible Preferred
Securities.
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"Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and the
Convertible Preferred Securities Guarantee.
"Securities Purchase Agreement" means the securities purchase
agreement, dated as of July __, 1997, by and between the Sponsor, the Trust and
the certain investors signatory thereto.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" or "Capital Trust" means Capital Trust, a California business
trust, or any successor entity in a merger, consolidation or amalgamation, in
its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section
5.6(b).
"Successor Entity" has the meaning set forth in Section 3.15(b)(i).
"Successor Securities" has the meaning set forth in Section 3.15(b).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I hereto.
"Transfer Restriction Termination Date" means the earlier of the first
date on which (i) the Securities and any Common Shares issued or issuable upon
the conversion or exchange thereof (other than (A) Securities acquired by the
Trust or any Affiliate thereof and (B) Common Shares issued upon the conversion
or exchange of any Security described in clause (A) above) may be sold pursuant
to Rule 144(k) and (ii) all the Securities have been sold pursuant to an
effective registration statement.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Trust Property" means (i) the Debentures, (ii) any cash on deposit in,
or owing to, the Institutional Trustee Account and (iii) all proceeds and rights
in respect of the foregoing to be held by the Institutional Trustee pursuant to
the terms of this Declaration for the benefit of the Securityholders.
"25% in liquidation amount of the Securities" means, except as provided
in the terms of the Convertible Preferred Securities or by the Trust Indenture
Act, Holder(s) of outstanding Securities voting together as a single class or,
as the context may require, Holders of outstanding Convertible Preferred
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of 25% or more of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or
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otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of the relevant
class.
"VRLP" means Vornado Realty L.P., a Delaware limited partnership.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act: Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions. The Trust Indenture Act shall
be applicable to this Declaration except as otherwise set forth herein, as if
the Securities had been sold pursuant to an effective registration statement.
(b) The Institutional Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If, and to the extent that, any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by ss.ss. 310 to 317,
inclusive, of the Trust Indenture Act, such duties imposed under the Trust
Indenture Act shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2. Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide the Institutional Trustee (i) within 14 days after each record
date for payment of Distributions, a list in such form as the Institutional
Trustee may reasonably require of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that, neither
the Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated
to provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Institutional Trustee by the
Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Institutional Trustee. The Institutional Trustee shall preserve, in as
current a form as is reasonably practicable, all information contained in the
Lists of Holders given to it or which it receives in the capacity as Paying
Agent (if acting in such capacity), provided that, the Institutional Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Institutional Trustee shall comply with its obligations under
ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Institutional Trustee.
Within 60 days after December 31 of each year, the Institutional
Trustee shall provide to the Holders of the Convertible Preferred Securities
such reports as are required by ss. 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by ss. 313 of the Trust Indenture Act. The
Institutional Trustee shall also comply with the requirements of ss. 313(d) of
the Trust Indenture Act.
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SECTION 2.4. Periodic Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such documents, reports and
information as required by ss. 314 (if any) and the compliance certificate
required by ss. 314 of the Trust Indenture Act in the form, in the manner and at
the times required by ss. 314 of the Trust Indenture Act.
Delivery of such reports, information and documents to the
Institutional Trustee is for informational purposes only and the Institutional
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Sponsor's compliance with any of its covenants hereunder
(as to which the Institutional Trustee is entitled to rely exclusively on
Officers' Certificates).
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of the Convertible
Preferred Securities may by vote on behalf of the Holders of all of the
Convertible Preferred Securities, waive any past Event of Default in respect of
the Convertible Preferred Securities and its consequences, provided that, if the
underlying Event of Default under the Indenture:
(i) is not waivable under the Indenture, the Event of
Default under this Declaration shall also not be
waivable; or
(ii) requires the consent or vote of greater than a
majority in principal amount of the holders of the
Debentures (a "Super Majority") to be waived under
the Indenture, the Event of Default under this
Declaration may only be waived by the vote of the
Holders of at least the proportion in liquidation
amount of the Convertible Preferred Securities that
the relevant Super Majority represents of the
aggregate principal amount of the Debentures
outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Convertible Preferred Securities arising therefrom shall be deemed to have been
cured, for every purpose of this Declaration, but no such waiver shall extend to
any subsequent or other default or an Event of Default with respect to the
Convertible Preferred Securities or impair any right consequent thereon. Any
waiver by the Holders of the Convertible Preferred Securities of an Event of
Default with respect to the Convertible Preferred Securities shall also be
deemed to constitute a waiver by the Holders of the Common Securities of any
such Event of Default with respect to the Common Securities for all purposes of
this Declaration without any further act, vote, or consent of the Holders of the
Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
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(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have
waived such Event of Default under this Declaration
as provided below in this Section 2.6(b), the Event
of Default under this Declaration shall also not be
waivable; or
(ii) requires the consent or vote of a Super Majority to
be waived, except where the Holders of the Common
Securities are deemed to have waived such Event of
Default under this Declaration as provided below in
this Section 2.6(b), the Event of Default under this
Declaration may only be waived by the vote of the
Holders of at least the proportion in liquidation
amount of the Common Securities that the relevant
Super Majority represents of the aggregate principal
amount of the Debentures outstanding;
provided further, that each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences until all Events of Default with respect
to the Convertible Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Institutional Trustee shall act solely on behalf of
the Holders of the Convertible Preferred Securities and only the Holders of the
Convertible Preferred Securities will have the right to direct the Institutional
Trustee to act in accordance with the terms of the Securities. The foregoing
provisions of this Section 2.6(b) shall be in lieu of ss.ss. 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act and such ss.ss. 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act are hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act. Subject
to the foregoing provisions of this Section 2.6(b), upon such waiver, any such
default shall cease to exist and any Event of Default with respect to the Common
Securities arising therefrom shall be deemed to have been cured for every
purpose of this Declaration, but no such waiver shall extend to any subsequent
or other default or Event of Default with respect to the Common Securities or
impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Convertible
Preferred Securities, constitutes a waiver of the corresponding Event of Default
under this Declaration. The foregoing provisions of this Section 2.6(c) shall be
in lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B)
of the Trust Indenture Act is hereby expressly excluded from this Declaration
and the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7. Event of Default; Notice.
(a) The Institutional Trustee shall, within 90 days after the
occurrence of an Event of Default actually known to a Responsible Officer of the
Institutional Trustee, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all such defaults with respect to the
Securities unless such defaults have been cured before the giving of such notice
(the term "defaults" for the purposes of this Section 2.7(a) being hereby
defined to be an Event of Default as defined in the Indenture, not including any
periods of grace provided for therein and irrespective of the giving of any
notice provided therein); provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the Debentures or in the
payment of any sinking fund installment established for the Debentures, the
Institutional Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Institutional Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities. Any such notice given pursuant to this Section 2.7(a)
shall state that an Event of Default under the Indenture also constitutes an
Event of Default under this Declaration.
(b) The Institutional Trustee shall not be deemed to have knowledge of
any default except:
(i) a default under Sections 5.1(a) and 5.1(b) of the
Indenture; or
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(ii) any default as to which the Institutional Trustee
shall have received written notice or of which a
Responsible Officer of the Institutional Trustee
charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1. Name.
The Trust is named "CT Convertible Trust I" as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders of Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2. Office.
The address of the principal office of the Trust is c/o Capital Trust,
605 Third Avenue, 26th Floor, New York, NY 10016. On at least ten Business Days
written notice to the Holders of Securities, the Regular Trustees may designate
another principal office.
SECTION 3.3. Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell the Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only those
other activities necessary, or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets, or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be classified for United States federal income
tax purposes as a grantor trust.
SECTION 3.4. Authority.
(a) Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
(b) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(c) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6; and
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(d) A Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purposes of executing any documents which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 3.5. Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and
the Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders
of Securities shall not have legal title to any part of the assets of the Trust,
but shall have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6. Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and authority
to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, that the Trust may issue no more than one series
of Convertible Preferred Securities and no more than one series of Common
Securities, and provided further, that there shall be no interests in the Trust
other than the Securities, and the issuance of Securities shall be limited to a
simultaneous issuance of both Convertible Preferred Securities and Common
Securities on the Closing Date;
(b) in connection with the issue and sale of the Securities, at the
direction of the Sponsor, to:
(i) execute and enter into the Securities Purchase
Agreement, and other related agreements providing for
the sale of the Securities; and
(ii) take all actions and perform such duties as may be
required of the Regular Trustees to open checking,
deposit or similar banking accounts as may be
necessary in connection with the issuance and sale of
the Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Convertible Preferred Securities and the Common Securities; provided, however,
that the Regular Trustees shall cause legal title to the Debentures to be held
of record in the name of the Institutional Trustee for the benefit of the
Holders of the Convertible Preferred Securities and the Holders of Common
Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Special Event; provided that the Regular Trustees
shall consult with the Sponsor and the Institutional Trustee before taking or
refraining from taking any Ministerial Action in relation to a Special Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of ss. 316 (c) of the Trust Indenture Act, Distributions,
voting rights, redemptions and exchanges, and to issue relevant notices to the
Holders of Convertible Preferred Securities and Holders of Common Securities as
to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Institutional Trustee
has the exclusive power to bring such Legal Action;
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(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants, and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations, if any,
under the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be executed by
any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out any
of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar, transfer
agent, Paying Agent and Conversion Agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities of
any notice received from the Debenture Issuer of its election to defer payments
of interest on the Debentures by extending the interest payment period under the
Indenture;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Convertible
Preferred Securities or to enable the Trust to effect the purposes for which the
Trust was created;
(p) to take any action, not inconsistent with this Declaration or with
applicable law, that the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the activities of the Trust as set out in
this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under
the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that
the Debentures will be treated as indebtedness of the
Debenture Issuer for United States federal income tax
purposes;
provided that such action does not adversely affect the interests of Holders or
vary the terms of the Convertible Preferred Securities;
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of the
Trust;
(r) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to Section 11.2 herein; and
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(s) to the extent provided in this Declaration, the winding up of the
affairs of and liquidation of the Trust and the preparation, execution and
filing of the Certificate of Cancellation with the Secretary of State of the
State of Delaware.
The Regular Trustees must exercise the powers set forth in this Section
3.6 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Regular Trustees shall not take any action that
is inconsistent with the purposes and functions of the Trust set forth in
Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee set forth in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section
3.6 shall be reimbursed by the Sponsor.
The Trust initially appoints the Institutional Trustee as transfer
agent and registrar for the Convertible Preferred Securities.
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Institutional
Trustee) shall cause the Trust not to, engage in any activity other than as
required or authorized by this Declaration. In particular the Trust shall not
and the Trustees (including the Institutional Trustee) shall cause the Trust not
to:
(i) invest any proceeds received by the Trust from
holding the Debentures, but shall distribute all such
proceeds to Holders of Securities pursuant to the
terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than
loans represented by the Debentures;
(v) possess any power or otherwise act in such a way as
to vary the Trust assets or the terms of the
Securities in any way whatsoever except as permitted
by the terms of this Declaration;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust
other than the Securities; or
(vii) other than as provided in this Declaration or Annex I
hereto, (A) direct the time, method and place of
exercising any trust or power conferred upon the
Debenture Trustee with respect to the Debentures, (B)
waive any past default that is not waivable under the
Indenture, (C) exercise any right to rescind or annul
any declaration that the principal of all the
Debentures shall be due and payable, or (D) consent
to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall
be required unless the Trust shall have received an
opinion of counsel to the effect that such
modification will not cause more than an
insubstantial risk that (x) the Trust will be deemed
an Investment Company required to be registered under
the Investment Company Act or (y) the Trust will not
be classified as a grantor trust for United States
federal income tax purposes.
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SECTION 3.8. Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of the
Trust and the Holders of the Securities. The right, title and interest of the
Institutional Trustee to the Debentures shall vest automatically in each Person
who may hereafter be appointed as Institutional Trustee in accordance with
Section 5.6. Such vesting and cessation of title shall be effective whether or
not conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest
bearing trust account (the "Institutional Trustee
Account") in the name of and under the exclusive
control of the Institutional Trustee on behalf of the
Holders of the Securities and, upon the receipt of
payments of funds made in respect of the Debentures
held by the Institutional Trustee, deposit such funds
into the Institutional Trustee Account and make
payments to the Holders of the Convertible Preferred
Securities and Holders of the Common Securities from
the Institutional Trustee Account in accordance with
Section 6.1. Funds in the Institutional Trustee
Account shall be held uninvested until disbursed in
accordance with this Declaration. The Institutional
Trustee Account shall be an account that is
maintained with a banking institution the rating on
whose long-term unsecured indebtedness is rated
investment grade by a "nationally recognized
statistical rating organization," as that term is
defined for purposes of Rule 436(g)(2) under the
Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of
the Convertible Preferred Securities and the Common
Securities to the extent the Debentures are redeemed
or mature;
(iii) engage in such ministerial activities as shall be
necessary or appropriate to effect the distribution
of the Trust Property in accordance with the terms of
this Declaration; and
(iv) to the extent provided for in this Declaration, take
such ministerial actions necessary in connection with
the winding up of the affairs of and liquidation of
the Trust and the preparation, execution and filing
of the Certificate of Cancellation with the Secretary
of State of the State of Delaware.
(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities.
(e) The Institutional Trustee shall take any Legal Action which arises
out of, or in connection with, an Event of Default of which a Responsible
Officer of the Institutional Trustee has actual knowledge, or the Institutional
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act; provided however, that if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay interest or principal on the Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption, on the redemption
date), then a Holder of Convertible Preferred Securities may directly institute
a proceeding for enforcement of payment to such Holder of the principal of or
interest on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Convertible
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Preferred Securities of such Holder (a "Direct Action") on or after the
respective due date specified in the Debentures and provided, further, that if
the Institutional Trustee fails to enforce its rights under the Debentures, any
Holder of Convertible Preferred Securities may institute a legal proceeding
against any person to enforce the Institutional Trustee's rights under the
Debentures. In connection with such Direct Action, the rights of the Holders of
the Common Securities will be subrogated to the rights of such Holder of
Convertible Preferred Securities to the extent of any payment made by the
Debenture Issuer to such Holder of Convertible Preferred Securities in such
Direct Action. Except as provided in the preceding sentences, the Holders of
Convertible Preferred Securities will not be able to exercise directly any other
remedy available to the holders of the Debentures.
(f) The Institutional Trustee shall continue to serve as a Trustee
until either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the
Holders of Securities pursuant to the terms of the
Securities; or
(ii) a Successor Institutional Trustee has been appointed
and has accepted that appointment in accordance with
Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities.
(h) The Institutional Trustee may authorize one or more Persons (each,
a "Paying Agent") to pay Distributions, redemption payments or Liquidation
Distributions on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with ss. 317(b) of the Trust Indenture Act. Any Paying
Agent may be removed by the Institutional Trustee at any time and a successor
Paying Agent or additional Paying Agents may be appointed at any time by the
Institutional Trustee.
(i) Subject to this Section 3.8, the Institutional Trustee shall have
none of the duties, liabilities, powers or the authority of the Regular Trustees
set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9. Certain Duties and Responsibilities of the Institutional
Trustee.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
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(i) prior to the occurrence of an Event of Default and
after the curing or waiving of all such Events of
Default that may have occurred:
(A) the duties and obligations of the Institutional
Trustee shall be determined solely by the express provisions
of this Declaration and the Institutional Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration,
and no implied covenants or obligations shall be read into
this Declaration against the Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Institutional
Trustee and conforming to the requirements of this
Declaration; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Institutional Trustee, the
Institutional Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for any
error of judgment made in good faith by a Responsible
Officer of the Institutional Trustee, unless it shall
be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with
respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of
the Holders of not less than a Majority in
liquidation amount of the Securities relating to the
time, method and place of conducting any proceeding
for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred
upon the Institutional Trustee under this
Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds
or otherwise incur personal financial liability in
the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that the
repayment of such funds or liability is not
reasonably assured to it under the terms of this
Declaration or indemnity reasonably satisfactory to
the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to
the custody, safe keeping and physical preservation
of the Debentures and the Institutional Trustee
Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals
with similar property for its own account, subject to
the protections and limitations on liability afforded
to the Institutional Trustee under this Declaration
and the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or
liability for or with respect to the value,
genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments
levied thereon or in connection therewith;
(vii) the Institutional Trustee shall not be liable for any
interest on any money received by it except as it may
otherwise agree in writing with the Sponsor. Money
held by the Institutional Trustee need not be
segregated from other funds held by it except in
relation to the Institutional Trustee Account
maintained by the Institutional Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise
required by law; and
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(viii) the Institutional Trustee shall not be responsible
for monitoring the compliance by the Regular Trustees
or the Sponsor with their respective duties under
this Declaration, nor shall the Institutional Trustee
be liable for any default or misconduct of the
Regular Trustees or the Sponsor.
SECTION 3.10. Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and
shall be fully 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, sent or presented by the proper party or
parties;
(ii) any direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be
sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this Declaration,
the Institutional Trustee shall deem it desirable
that a matter be proved or established before taking,
suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is
herein specifically prescribed) may, in the absence
of bad faith on its part, request and conclusively
rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly delivered
by the Sponsor or the Regular Trustees;
(iv) the Institutional Trustee shall have no duty to see
to any recording, filing or registration of any
instrument (including any financing or continuation
statement or any filing under tax or securities laws)
or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel of
its selection or other experts and the advice or
opinion of such counsel and experts with respect to
legal matters or advice within the scope of such
experts' area of expertise 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 accordance with such advice or opinion.
Such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of its employees.
The Institutional Trustee shall have the right at any
time to seek instructions concerning the
administration of this Declaration from any court of
competent jurisdiction;
(vi) the Institutional Trustee shall be under no
obligation to exercise any of the rights or powers
vested in it by this Declaration at the request or
direction of any Holder, unless such Holder shall
have provided to the Institutional Trustee security
and indemnity, reasonably satisfactory to the
Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the
expenses of the Institutional Trustee's agents,
nominees or custodians) and liabilities that might be
incurred by it in complying with such request or
direction, including such reasonable advances as may
be requested by the Institutional Trustee provided,
that, nothing contained in this Section 3.10(a)(vi)
shall be taken to (a) require the Holders of
Convertible Preferred Securities to offer such
indemnity in the event such Holders direct the
Institutional Trustee to take any action it is
empowered to take under this Declaration following an
Event of Default or (b) relieve the Institutional
Trustee, upon the occurrence of an
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Event of Default, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make
any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the
Institutional Trustee, in its discretion, may make
such further inquiry or investigation into such facts
or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the
trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents,
custodians, nominees or attorneys and the
Institutional 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;
(ix) any action taken by the Institutional Trustee or its
agents hereunder shall bind the Trust and the Holders
of the Securities, and the signature of the
Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action
and no third party shall be required to inquire as to
the authority of the Institutional Trustee to so act
or as to its compliance with any of the terms and
provisions of this Declaration, both of which shall
be conclusively evidenced by the Institutional
Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration
the Institutional Trustee shall deem it desirable to
receive written instructions with respect to
enforcing any remedy or right or taking any other
action hereunder, the Institutional Trustee (i) may
request written instructions from the Holders of the
Securities which instructions may only be given by
the Holders of the same proportion in liquidation
amount of the Securities as would be entitled to
direct the Institutional Trustee under the terms of
the Securities in respect of such remedy, right or
action, (ii) may refrain from enforcing such remedy
or right or taking such other action until such
instructions are received, and (iii) shall be
protected in conclusively relying on or acting in
accordance with such instructions;
(xi) except as otherwise expressly provided by this
Declaration, the Institutional Trustee shall not be
under any obligation to take any action that is
discretionary under the provisions of this
Declaration; and
(xii) the Institutional Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it
in good faith and reasonably believed by it to be
authorized or within the discretion or rights or
powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty
or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
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SECTION 3.11. Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees, the Institutional Trustee or the Trustees generally
(except as may be required under the Business Trust Act) described in this
Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall be a
Trustee for the sole and limited purpose of fulfilling the requirements of ss.
3807 of the Business Trust Act.
SECTION 3.12. Execution of Documents.
Except as otherwise required by the Business Trust Act, any Regular
Trustee is authorized to execute on behalf of the Trust any documents that the
Regular Trustees have the power and authority to execute pursuant to Section
3.6.
SECTION 3.13. Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14. Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall have existence for twenty-five (25) years from July 28, 1998.
SECTION 3.15. Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any corporation or other body,
except as described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided that
(i) such successor entity (the "Successor Entity")
either:
(A) expressly assumes all of the obligations of the
Trust under the Securities; or
(B) substitutes for the Convertible Preferred
Securities other securities having substantially the same
terms as the Convertible Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank the same
as the Convertible Preferred Securities rank with respect to
Distributions and payments upon liquidation, redemption and
otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee
of the Successor Entity that possesses the same
powers and duties as the Institutional Trustee as the
Holder of the Debentures;
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(iii) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights,
preferences and privileges of the Holders of the
Securities (including any Successor Securities) in
any material respect (other than with respect to any
dilution of the Holders' interest in the Successor
Entity);
(iv) such Successor Entity has a purpose identical to that
of the Trust;
(v) such Successor Entity has assets identical to that of
the Trust;
(vi) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of
nationally recognized independent counsel to the
Trust experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences
and privileges of the Holders of the Securities (including any
Successor Securities) in any material respect (other than with
respect to any dilution of the Holders' interest in the
Successor Entity);
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an Investment
Company; and
(C) following such merger, consolidation,
amalgamation or replacement, the Trust (or such Successor
Entity) will continue to be classified as a grantor trust for
United States federal income tax purposes; and
(vii) the Sponsor guarantees the obligations of the
Successor Entity under the Successor Securities at
least to the extent provided by the Securities
Guarantees.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it, if such consolidation, amalgamation, merger or replacement would
cause the Trust or the Successor Entity to be classified as other than a grantor
trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1. Sponsor's Purchase of Common Securities.
On the Closing Date the Sponsor will purchase all of the Common
Securities issued by the Trust, in an amount at least equal to 3% of the capital
of the Trust, at the same time as the Convertible Preferred Securities are sold.
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SECTION 4.2. Responsibilities of the Sponsor.
In connection with the issue and sale of the Convertible Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Convertible Preferred Securities
and to do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for execution
and filing any documents to be executed and filed by the Trust, as the Sponsor
deems necessary or advisable in order to comply with the applicable laws of any
such States; and
(b) to negotiate the terms of the Securities Purchase Agreement
providing for the purchase of the Convertible Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1. Number of Trustees.
The number of Trustees initially shall be four (4), and:
(a) at any time before the issuance of any Securities, the Sponsor may,
by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities; provided, however, that the number of Trustees shall in
no event be less than two (2); provided further, that (i) one Trustee, in the
case of a natural person, shall be a person who is a resident of the State of
Delaware or that, if not a natural person, is an entity which has its principal
place of business in the State of Delaware (the "Delaware Trustee"); (ii) there
shall be at least one Trustee who is an employee or officer of, or is affiliated
with the Sponsor (a "Regular Trustee"); and (iii) one Trustee shall be the
Institutional Trustee, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements.
SECTION 5.2. Delaware Trustee.
If required by the Business Trust Act, one Trustee shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the requirements of
applicable law;
provided that, if the Institutional Trustee has its principal place of business
in the State of Delaware and otherwise meets the requirements of applicable law,
then the Institutional Trustee shall also be the Delaware Trustee and Section
3.11 shall have no application.
The Initial Delaware Trustee shall be: Wilmington Trust Company.
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SECTION 5.3. Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under
the laws of the United States of America or any State
or Territory thereof or of the District of Columbia,
or a corporation or Person permitted by the
Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws
to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or
examination by federal, state, territorial or
District of Columbia authority. If such corporation
publishes reports of condition at least annually,
pursuant to law or to the requirements of the
supervising or examining authority referred to above,
then for the purposes of this Section 5.3(a)(ii), 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.
(b) If at any time the Institutional Trustee shall cease to be eligible
to so act under Section 5.3(a), the Institutional Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.6(c).
(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of ss. 310(b) of the Trust Indenture Act, the
Institutional Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in ss. 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of ss. 310(b) of the Trust Indenture Act.
(d) The Convertible Preferred Securities Guarantee shall be deemed to
be specifically described in this Declaration for purposes of clause (i) of the
first provision contained in ss. 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be: Wilmington Trust
Company.
SECTION 5.4. Certain Qualifications of Regular Trustees and Delaware
Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the Institutional
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5. Regular Trustees.
The initial Regular Trustees shall be:
John R. Klopp
Sheli Z. Rosenberg
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(i) Unless otherwise determined by the Regular Trustees,
and except as otherwise required by the Business
Trust Act or applicable law, any Regular Trustee is
authorized to execute on behalf of the Trust any
documents which the Regular Trustees have the power
and authority to cause the Trust to execute pursuant
to Section 3.6.
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SECTION 5.6. Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the
Holders of a Majority in liquidation amount of the
Common Securities voting as a class at a meeting of
the Holders of the Common Securities.
(b) (i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a Successor Institutional
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Institutional Trustee and delivered to the
Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not
be removed in accordance with Section 5.6(a) until a
successor Trustee possessing the qualifications to
act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and
has accepted such appointment by written instrument
executed by such Successor Delaware Trustee and
delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation. Any
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing signed by the Trustee and delivered to the Sponsor
and the Trust, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been
appointed and has accepted such appointment by instrument
executed by such Successor Institutional Trustee and delivered
to the Trust, the Sponsor and the resigning Institutional
Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to
the holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor
Delaware Trustee has been appointed and has accepted
such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the
Trust, the Sponsor and the resigning Delaware
Trustee.
(d) the Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Delaware Trustee or Successor Institutional
Trustee as the case may be if the Institutional Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.6.
(e) If no Successor Institutional Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.6 within 60 days after delivery of an instrument of resignation or removal,
the Institutional Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Institutional Trustee or
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Successor Delaware Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper and prescribe, appoint a Successor
Institutional Trustee or Successor Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7. Vacancies Among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
SECTION 5.8. Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.6, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.9. Meetings.
If there is more than one Regular trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand-delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustee or any committee thereof shall be hand-delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.
SECTION 5.10. Delegation of Power.
A Regular Trustee may, by power of attorney consistent with applicable
law, delegate to any other natural person over the age of 21 his or her power
for the purposes of executing any documents contemplated in Section 3.6.
The Regular Trustees shall have power to delegate from time to time to
such of their number or to officers of the Trust the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Regular Trustees or otherwise as the Regular Trustees may deem expedient,
to the
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extent such delegation is not prohibited by applicable law or contrary to the
provisions of the Trust, as set forth herein.
SECTION 5.11. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1. Distributions.
Holders of Securities shall receive Distributions (as defined herein)
in accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Convertible Preferred Securities and the
Common Securities in accordance with the preferences set forth in their
respective terms. If and to the extent that the Debenture Issuer makes a payment
of interest (including Compound Interest (as defined in the Indenture) and
Additional Sums (as defined in the Indenture)), premium and/or principal on the
Debentures held by the Institutional Trustee (the amount of any such payment
being a "Payment Amount"), the Institutional Trustee shall and is directed, to
the extent funds are available for that purpose, to make a distribution (a
"Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1. General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one class
of convertible preferred securities representing undivided beneficial interests
in the assets of the Trust having such terms as are set forth in Annex I (the
"Convertible Preferred Securities") and one class of convertible common
securities representing undivided beneficial interests in the assets of the
Trust having such terms as are set forth in Annex I (the "Common Securities").
The Trust shall issue no securities or other interests in the assets of the
Trust other than the Convertible Preferred Securities and the Common Securities.
(b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
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(d) Every Person, by virtue of having become a Holder in accordance
with the terms of this Declaration, shall be deemed to have expressly assented
and agreed to the terms of and shall be bound by this Declaration.
SECTION 7.2. Execution and Authentication.
(a) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. In case any Regular Trustee of the Trust who shall have signed
any of the Securities shall cease to be such Regular Trustee before the
Certificates so signed shall be delivered by the Trust, such Certificates
nevertheless may be delivered as though the person who signed such Certificates
had not ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of such
Security, shall be the Regular Trustees of the Trust, although at the date of
the execution and delivery of the Declaration any such person was not such a
Regular Trustee.
(b) One Regular Trustee shall sign the Convertible Preferred Securities
for the Trust by manual or facsimile signature. Unless otherwise determined by
the Trust, such signature shall, in the case of Common Securities, be a manual
signature.
A Convertible Preferred Security shall not be valid until authenticated
by the manual signature of an authorized signatory of the Institutional Trustee.
The signature shall be conclusive evidence that the Convertible Preferred
Security has been authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular Trustee, the
Institutional Trustee shall authenticate the Convertible Preferred Securities
for original issue.
The Institutional Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Convertible Preferred Securities. An
authenticating agent may authenticate Convertible Preferred Securities whenever
the Institutional Trustee may do so. Each reference in this Declaration to
authentication by the Institutional Trustee includes authentication by such
agent. An authenticating agent has the same rights as the Institutional Trustee
to deal with the Company or an Affiliate.
SECTION 7.3. Form and Dating.
The Convertible Preferred Securities and the Institutional Trustee's
certificate of authentication shall be substantially in the form of Exhibit A-1
and the Common Securities shall be substantially in the form of Exhibit A-2,
each of which is hereby incorporated in and expressly made a part of this
Declaration. Certificates may be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by their execution thereof. The Securities may have
letters, numbers, notations, other marks of identification or designation or
other changes or additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice and such legends or endorsements required by
law, stock exchange rule and agreements to which the Trust is subject, if any
(provided that any such notation, legend or endorsement is in a form acceptable
to the Trust). The Trust at the direction of the Sponsor shall furnish any such
legend not contained in Exhibit A-1 to the Institutional Trustee in writing.
Each Convertible Preferred Security Certificate shall be dated the date of its
authentication. The terms and provisions of the Securities set forth in Annex I
and the forms of Securities set forth in Exhibits A-1 and A-2 are part of the
terms of this Declaration and, to the extent applicable, the Institutional
Trustee and the Sponsor, by their execution and delivery of this Declaration,
expressly agree to such terms and provisions and to be bound thereby.
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SECTION 7.4. Paying Agent.
The Trust shall maintain in the Borough of Manhattan, City of New York,
State of New York, an office or agency where Convertible Preferred Securities
may be presented for payment ("Paying Agent"). The Trust shall maintain an
office or agency where Securities may be presented for conversion ("Conversion
Agent"). The Trust may appoint the Paying Agent and the Conversion Agent and may
appoint one or more additional paying agents and one or more additional
conversion agents in such other locations as it shall determine. The term
"Paying Agent" includes any additional paying agent and the term "Conversion
Agent" includes any additional conversion agent. The Trust may change any Paying
Agent or Conversion Agent without prior notice to any Holder. The Trust shall
notify the Institutional Trustee in writing of the name and address of any Agent
not a party to this Declaration. If the Trust fails to appoint or maintain
another entity as Paying Agent or Conversion Agent, the Institutional Trustee
shall act as such. The Trust or any of its Affiliates may act as Paying Agent or
Conversion Agent. The Trust shall act as Paying Agent and Conversion Agent for
the Common Securities.
The Trust initially appoints Wilmington Trust Company, c/o Corporate
Trust Administration, 1100 North Market Street, Wilmington, Delaware 19810-0001,
as Paying Agent and Conversion Agent for the Convertible Preferred Securities.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1. Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of the Sponsor or the Holder of
the Common Securities;
(ii) upon the filing of a certificate of dissolution or
its equivalent with respect to the Sponsor or the
Holder of the Common Securities; the filing of a
certificate of cancellation with respect to the Trust
after having obtained the consent of at least a
Majority in liquidation amount of the Securities
voting together as a single class to file such
certificate of cancellation; or the revocation of the
Sponsor's charter or the charter of the Holder of the
Common Securities and the expiration of 90 days after
the date of revocation without a reinstatement
thereof;
(iii) upon the entry of a decree of judicial dissolution of
the Sponsor, the Trust or the Holder of the Common
Securities;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption
thereof shall have been paid to the Holders in
accordance with the terms of the Securities;
(v) upon the occurrence and continuation of a Special
Event pursuant to which the Trust shall have been
dissolved in accordance with the terms of the
Securities and all of the Debentures held by the
Institutional Trustee shall have been distributed to
the Holders of Securities in exchange for all of the
Securities;
(vi) upon the written direction to the Institutional
Trustee from the Sponsor at any time to terminate the
Trust and, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law,
the distribution of Debentures to Holders in exchange
for
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the Securities, subject to the Regular Trustees'
receipt of an opinion of nationally recognized
independent counsel experienced in such matters to
the effect that the holders of the Convertible
Preferred Securities will not recognize any income,
gain or loss for United States federal income tax
purposes as a result of the dissolution of the Trust
and such distribution to Holders;
(vii) upon the distribution of the Sponsor's Common Shares
to all Holders of Convertible Preferred Securities
upon conversion of all outstanding Convertible
Preferred Securities;
(viii) the expiration of the term of the Trust on July 28,
2023; or
(ix) before the issuance of any Securities, with the
consent of all of the Regular Trustees and the
Sponsor.
(b) As soon as is practicable after the occurrence of an event referred
to in Section 8.1(a), the Trustees shall file a certificate of cancellation with
the Secretary of State of the State of Delaware.
(c) The provisions of Sections 3.9 and 3.10 and Article X shall survive
the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1. Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Convertible Preferred Securities shall
be transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party may
only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided, that, any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States
federal income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company required to
register under the Investment Company Act or the
transferee would become an Investment Company
required to register under the Investment Company
Act.
(d) Each Security that bears or is required to bear the legend set
forth in this Section 9.1(d) (a "Restricted Security") shall be subject to the
restrictions on transfer provided in the legend set forth in this Section
9.1(d), unless such restrictions on transfer shall be waived by the written
consent of the Regular Trustees, and the Holder of each Restricted Security, by
such securityholder's acceptance thereof, agrees to be bound by such
restrictions on transfer. As used in this Section 9.1(d) and in Section 9.1(e),
the term "transfer" encompasses any sale, pledge, transfer or other disposition
of any Restricted Security.
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Prior to the Transfer Restriction Termination Date, any certificate
evidencing a Security shall bear a legend in substantially the following form,
unless otherwise agreed by the Regular Trustees (with written notice thereof to
the Institutional Trustee):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR
(C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION) RESELL OR OTHERWISE
TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON SHARES, ISSUABLE UPON
CONVERSION OR EXCHANGE OF THIS SECURITY EXCEPT (A) TO CAPITAL TRUST (THE
"COMPANY") OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE FOR
THE CONVERTIBLE PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE
MAY BE (OR, IF THIS CERTIFICATE EVIDENCES COMMON SHARES, THE TRANSFER AGENT FOR
THE COMMON SHARES), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED
HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR TRANSFER
AGENT), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT OR (F) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE FOR THE CONVERTIBLE
PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE (OR, IF
THIS CERTIFICATE EVIDENCES COMMON SHARES, SUCH HOLDER MUST FURNISH TO THE
TRANSFER AGENT SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
COMPANY OR CT CONVERTIBLE TRUST I ("THE TRUST") MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT). IF THIS CERTIFICATE DOES NOT EVIDENCE COMMON SHARES AND IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A
U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE FOR
THE CONVERTIBLE PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE
MAY BE, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY
OR THE TRUST MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED
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AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY
EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Following the Transfer Restriction Termination Date, any Security or
security issued in exchange or substitution therefor (other than (i) Securities
acquired by Capital Trust or any Affiliate and (ii) Common Shares issued upon
the conversion or exchange of any Security described in clause (i) above) may
upon surrender of such Security for exchange to any Regular Trustee on behalf of
the Trust in accordance with the provisions of Section 9.2, be exchanged for a
new Security or Securities, of like tenor and aggregate liquidation amount,
which shall not bear the restrictive legend required by this Section 9.1(d).
Any Convertible Preferred Security or Common Shares issued upon the
conversion or exchange of a Convertible Preferred Security that, prior to the
Transfer Restriction Termination Date, is purchased or owned by the Company or
any Affiliate thereof may not be resold by the Company or such Affiliate unless
registered under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction which results
in such Convertible Preferred Securities or Common Shares, as the case may be,
no longer being "restricted securities" (as defined under Rule 144).
(e) Each Convertible Preferred Security shall be subject to the
restrictions on transfer provided in this Section 9.1(e).
(i) If a holder of Convertible Preferred Securities (the
"Offeror") desires to sell, assign, transfer, encumber, or otherwise
dispose of any of his Convertible Preferred Securities, he shall give
written notice to Capital Trust of his desire to do so and of the price
per security and other terms under which he proposes to dispose of his
Convertible Preferred Securities (the "Sales Notice"), which Sales
Notice shall constitute an offer on the part of the Offeror to sell to
Capital Trust any such Convertible Preferred Securities upon the terms
and conditions set forth in such notice.
(ii) Unless, within ten (10) days after the giving of the
Sales Notice by the Offeror pursuant to subparagraph (i) of this
Section 9.1(e), Capital Trust shall give written notice to the Offeror
that Capital Trust irrevocably commits to purchase the Convertible
Preferred Securities subject of the Sale Notice at the price and under
the terms specified in the Sales Notice given by the Offeror, Capital
Trust shall be deemed to have rejected the offer of the Offeror to sell
the Convertible Preferred Securities subject of the Sale Notice and the
Offeror shall be free without restriction under this Section 9.1(e) to
sell the Convertible Preferred Securities subject of the Sales Notice
to any other Person, provided however, if the price per security is
less than 90% of the price and the other terms are more favorable than
those contained in the Sales Notice, the Offeror shall again offer to
sell the Convertible Preferred Securities in accordance with the
provisions of subparagraph (i) of this Section 9.1(e) before it may
complete any such sale and provided further, that the Convertible
Preferred Securities subject of the Sales Notice shall again be subject
to the provisions of subparagraph (i) of this Section 9.1(e) if within
ninety (90) days after the giving of the Sales Notice, the Offeror
shall not have completed the disposition of such Convertible
Debentures.
(iii) If Capital Trust irrevocably commits to purchase the
Convertible Preferred Securities as contemplated by subparagraph (ii)
of this Section 9.1(e), the closing of such purchase shall take place
at the principal place of business of Capital Trust at 10:00 A.M. (New
York City time) on the third (3rd) day following the expiration of the
ten (10) day period referred to subparagraph (ii) of this Section
9.1(e), or if such day is not a Business Day, then the next day that is
a Business Day.
The provisions of this Section 9.1(e) shall not apply to one or more
transfers of Convertible Preferred Securities (i) by the GM Trusts to one or
more trusts for the benefit of the employees of General Motors
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Corporation and its Affiliates, (ii) by VRLP to Vornado Operating Inc. or any
Affiliate or subsidiary thereof or to any entity in which VRLP holds, directly
or indirectly, an economic interest of greater than 50% or (iii) by EOPLP to any
EOP sponsored "Paper Clip" enterprise or any Affiliate or subsidiary thereof or
to any entity in which EOPLP holds, directly or indirectly, an economic interest
of greater than 50%.
SECTION 9.2. Transfer of Certificates.
The Regular Trustees shall provide for the registration of Certificates
and of transfers of Certificates, which will be effected without charge, but
only upon payment in respect of any tax or other government charges that may be
imposed in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.3. Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4. Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Institutional Trustee or the
Regular Trustees such security or indemnity as may be required by them to keep
each of them harmless;
then:
in the absence of notice that such Certificate shall have been acquired
by a bona fide purchaser, the Institutional Trustee or any Regular Trustee on
behalf of the Trust shall execute and deliver, in exchange for, or in lieu of,
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like denomination. In connection with the issuance of any new Certificate under
this Section 9.4, the Institutional Trustee or the Regular Trustees may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute conclusive evidence of an ownership
interest in the relevant Securities, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
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ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS
SECTION 10.1. Liability.
(a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of
the capital contributions (or any return thereon) of
the Holders of the Securities which shall be made
solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust
or otherwise.
(b) The Holder of the Common Securities shall be liable for all of the
debts and obligations of the Trust (other than amounts due on the Securities
subject to the Preferred Guarantee) to the extent not satisfied out of the
Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders of
the Convertible Preferred Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
SECTION 10.2. Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3. Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
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(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an
Indemnified Person shall act in a manner that is, or
provides terms that are, fair and reasonable to the
Trust or any Holder of Securities, the Indemnified
Person shall resolve such conflict of interest, take
such action or provide such terms, considering in
each case the relative interest of each party
(including its own interest) to such conflict,
agreement, transaction or situation and the benefits
and burdens relating to such interests, any customary
or accepted industry practices, and any applicable
generally accepted accounting practices or
principles. In the absence of bad faith by the
Indemnified Person, the resolution, action or term so
made, taken or provided by the Indemnified Person
shall not constitute a breach of this Declaration or
any other agreement contemplated herein or of any
duty or obligation of the Indemnified Person at law
or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled
to consider such interests and factors as it desires,
including its own interests, and shall have no duty
or obligation to give any consideration to any
interest of or factors affecting the Trust or any
other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such
express standard and shall not be subject to any
other or different standard imposed by this
Declaration or by applicable law.
SECTION 10.4. Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the full
extent permitted by law, any Company Indemnified
Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action
by or in the right of the Trust) by reason of the
fact that he is or was a Company Indemnified Person
against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in
good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a
presumption that the Company Indemnified Person did
not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the
best interests of the Trust, and, with respect to any
criminal action or proceeding, had no reasonable
cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full
extent permitted by law, any Company Indemnified
Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed
action or suit by or in the right of the
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Trust to procure a judgment in its favor by reason of
the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit
if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the
best interests of the Trust and except that no such
indemnification shall be made in respect of any
claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent
that the Court of Chancery of Delaware or the court
in which such action or suit was brought shall
determine upon application that, despite the
adjudication of liability but in view of all the
circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses
which such Court of Chancery or such other court
shall deem proper.
(iii) To the extent that a Company Indemnified Person shall
be successful on the merits or otherwise (including
dismissal of an action without prejudice or the
settlement of an action without admission of
liability) in defense of any action, suit or
proceeding referred to in paragraphs (i) and (ii) of
this Section 10.4(a), or in defense of any claim,
issue or matter therein, he shall be indemnified, to
the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of
this Section 10.4(a) (unless ordered by a court)
shall be made by the Debenture Issuer only as
authorized in the specific case upon a determination
that indemnification of the Company Indemnified
Person is proper in the circumstances because he has
met the applicable standard of conduct set forth in
paragraphs (i) or (ii). Such determination shall be
made (1) by the Regular Trustees by a majority vote
of a quorum consisting of such Regular Trustees who
were not parties to such action, suit or proceeding,
(2) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular
Trustees so directs, by independent legal counsel in
a written opinion, or (3) by the Common Security
Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a
Company Indemnified Person in defending a civil,
criminal, administrative or investigative action,
suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the
Debenture Issuer in advance of the final disposition
of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Company
Indemnified Person to repay such amount if it shall
ultimately be determined that he is not entitled to
be indemnified by the Debenture Issuer as authorized
in this Section 10.4(a). Notwithstanding the
foregoing, no advance shall be made by the Debenture
Issuer if a determination is reasonably and promptly
made (i) by the Regular Trustees by a majority vote
of a quorum of disinterested Regular Trustees, (ii)
if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular
Trustees so directs, by independent legal counsel in
a written opinion or (iii) by the Common Security
Holder of the Trust, that, based upon the facts known
to the Regular Trustees, counsel or the Common
Security Holder at the time such determination is
made, such Company Indemnified Person acted in bad
faith or in a manner that such person did not believe
to be in or not opposed to the best interests of the
Trust, or, with respect to any criminal proceeding,
that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful.
In no event shall any advance be made in instances
where the Regular Trustees, independent legal counsel
or Common Security Holder reasonably determine that
such person
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deliberately breached his duty to the Trust or its
Common or Convertible Preferred Security Holders.
(vi) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other
paragraphs of this Section 10.4(a) shall not be
deemed exclusive of any other rights to which those
seeking indemnification and advancement of expenses
may be entitled under any agreement, vote of
stockholders or disinterested directors of the
Debenture Issuer or Convertible Preferred Security
Holders of the Trust or otherwise, both as to action
in his official capacity and as to action in another
capacity while holding such office. All rights to
indemnification under this Section 10.4(a) shall be
deemed to be provided by a contract between the
Debenture Issuer and each Company Indemnified Person
who serves in such capacity at any time while this
Section 10.4(a) is in effect. Any repeal or
modification of this Section 10.4(a) shall not affect
any rights or obligations then existing.
(vii) The Debenture Issuer or the Trust may purchase and
maintain insurance on behalf of any person who is or
was a Company Indemnified Person against any
liability asserted against him and incurred by him in
any such capacity, or arising out of his status as
such, whether or not the Debenture Issuer would have
the power to indemnify him against such liability
under the provisions of this Section 10.4(a)
(viii) For purposes of this Section 10.4(a), references to
"the Trust" shall include, in addition to the
resulting or surviving entity, any constituent entity
(including any constituent of a constituent) absorbed
in a consolidation or merger, so that any person who
is or was a director, trustee, officer or employee of
such constituent entity, or is or was serving at the
request of such constituent entity as a director,
trustee, officer, employee or agent of another
entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect to
the resulting or surviving entity as he would have
with respect to such constituent entity if its
separate existence had continued.
(ix) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section
10.4(a) shall, unless otherwise provided when
authorized or ratified, continue as to a person who
has ceased to be a Company Indemnified Person and
shall inure to the benefit of the heirs, executors
and administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless against,
any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration or
the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or investigating
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. The provisions of this Section 10.4(b) shall
survive the satisfaction and discharge of this Declaration or the resignation or
removal of the Institutional Trustee or the Delaware Trustee, as the case may
be.
SECTION 10.5. Outside Business.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar
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or dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Institutional Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the Sponsor,
or may act as depositary for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1. Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the same as the
fiscal year of the Sponsor.
SECTION 11.2. Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books, records and supporting
documents, which shall reflect in detail each transaction of the Trust. The
books of account shall be maintained on the accrual method of accounting in
compliance with generally accepted accounting principles, consistently applied.
The Trust shall use the accrual method of accounting for United States federal
income tax purposes. The books of account and the records of the Trust shall be
audited by and reported upon as of the end of each Fiscal Year of the Trust by a
firm of independent certified public accountants selected by the Regular
Trustees.
(b) The Sponsor shall cause to be prepared and delivered to each of the
Holders of Securities, within 90 days after the end of each Fiscal Year of the
Sponsor, annual financial statements of the Sponsor, including a balance sheet
of the Sponsor as of the end of such Fiscal Year, and the related statements of
income or loss.
(c) The Regular Trustees shall cause to be duly prepared and delivered
to each of the Holders of Securities, any annual United States federal income
tax information statement required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall use reasonable best
efforts to deliver all such statements within 90 days after the end of each
Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and timely
filed with the appropriate taxing authority an annual United States federal
income tax return, on a Form 1041 or such other form required by United States
federal income tax law, and any other annual income tax returns required to be
filed by the Regular Trustees on behalf of the Trust with any state or local
taxing authority.
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SECTION 11.3. Banking.
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4. Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over-withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding. Furthermore, if withholding is imposed on
payments of interest on the Debentures, to the extent such withholding is
attributable to ownership by a specific Holder of Convertible Preferred
Securities, the amount withheld shall be deemed a distribution in the amount of
the withholding to such specific Holder.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1. Amendments.
Except as otherwise provided in this Declaration or by any applicable
terms of the Securities,
(a) this Declaration may only be amended by a written instrument
approved and executed by the Regular Trustees (or, if there are more than two
Regular Trustees, a majority of the Regular Trustees) and:
(i) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional
Trustee, also by the Institutional Trustee; and
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee,
also by the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment shall
be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Institutional Trustee shall have first received an
Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including
the terms of the Securities);
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(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or
immunities of the Institutional Trustee, the
Institutional Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust
and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to fail to continue to be
classified for purposes of United States federal income
taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers
of the Institutional Trustee; or
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment Company
Act;
(c) at such time and after the Trust has issued any securities that
remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only with
such additional requirements as may be set forth in the terms of such
Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the Holders
of a Majority in liquidation amount of the Common Securities;
(f) the rights of the holders of the Common Securities under Article V
to increase or decrease the number of, and appoint and remove, Trustees shall
not be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be amended
from time to time by the Holders of a Majority in liquidation amount of the
Common Securities and the Institutional Trustee, without the consent of the
Holders of the Convertible Preferred Securities to:
(i) cure any ambiguity, correct or supplement any
provision in this Declaration that may be
inconsistent with any other provision, or to make any
other provisions with respect to matters or questions
arising under this Declaration, which shall not be
inconsistent with the other provisions of this
Declaration; or
(ii) to modify, eliminate or add to any provisions of this
Declaration to such extent as shall be necessary to
ensure that the Trust will be classified for United
States federal income tax purposes as a grantor trust
at all times that any Securities are outstanding or
to ensure that the Trust will not be required to
register as an investment company under the
Investment Company Act;
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provided, however, such action shall not adversely affect in any material
respect the interests of any Holder of Securities;
(h) this Declaration may be amended by the Holders of a Majority in
liquidation amount of the Common Securities and the Institutional Trustee if:
(i) the Holders of a Majority in liquidation amount of
the Convertible Preferred Securities consent to such
amendment and
(ii) the Regular Trustees have received an opinion of
nationally recognized independent counsel experienced
in such matters to the effect that such amendment or
the exercise of any power granted to the Regular
Trustees in accordance with such amendment will not
affect the Trust's status as a grantor trust for
United States federal income tax purposes or the
Trust's exemption from status as an "investment
company" under the Investment Company Act,
provided, that without the consent of each Holder of Securities, this
Declaration may not be amended to:
(i) change the amount or timing of any distribution on
the Securities or otherwise adversely affect the
amount of any distribution required to be made in
respect of the Securities as of a specified date;
(ii) restrict the right of a Holder of Securities to
institute suit for the enforcement of any such
payment on or after such date; or
(iii) change or add a provision that shall result in the
realization of unrelated business income for the
Holders of Securities.
(i) Any amendments of this Declaration shall become effective when
notice thereof is given to Holders of Securities.
SECTION 12.2. Meetings of the Holders of Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities may be called at
any time by the Regular Trustees (or as provided in the terms of the Securities)
to consider and act on any matter on which Holders of such class of Securities
are entitled to act under the terms of this Declaration, the terms of the
Securities or the rules of any stock exchange on which the Convertible Preferred
Securities are listed or admitted for trading. The Regular Trustees shall call a
meeting of the Holders of such class if directed to do so by the Holders of at
least 25% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls in a
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders of Securities calling a meeting shall specify in writing the
Security Certificates held by the Holders of Securities exercising the right to
call a meeting and only those Securities specified shall be counted for purposes
of determining whether the required percentage set forth in the second sentence
of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat
at least 7 days and not more than 60 days before the
date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or
required under this Declaration or the rules of any
stock exchange on
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which the Convertible Preferred Securities are listed
or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of
Securities. Any action that may be taken at a meeting
of the Holders of Securities may be taken without a
meeting if a consent in writing setting forth the
action so taken is signed by the Holders of
Securities owning not less than the minimum amount of
Securities in liquidation amount that would be
necessary to authorize or take such action at a
meeting at which all Holders of Securities having a
right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting
shall be given to the Holders of Securities entitled
to vote who have not consented in writing. The
Regular Trustees may specify that any written ballot
submitted to the Security Holder for the purpose of
taking any action without a meeting shall be returned
to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to
act for it by proxy on all matters in which a Holder
of Securities is entitled to participate, including
waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid
after the expiration of 11 months from the date
thereof unless otherwise provided in the proxy. Every
proxy shall be revocable at the pleasure of the
Holder of Securities executing it. Except as
otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be
governed by the General Corporation Law of the State
of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a
Delaware corporation and the Holders of the
Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall
be conducted by the Regular Trustees or by such other
Person that the Regular Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the
terms of the Securities, the Trust Indenture Act or
the listing rules of any stock exchange on which the
Convertible Preferred Securities are then listed or
trading otherwise provides, the Regular Trustees, in
their sole discretion, shall establish all other
provisions relating to meetings of Holders of
Securities, including notice of the time, place or
purpose of any meeting at which any matter is to be
voted on by any Holders of Securities, waiver of any
such notice, action by consent without a meeting, the
establishment of a record date, quorum requirements,
voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF SPONSOR, INSTITUTIONAL TRUSTEE AND
DELAWARE TRUSTEE
SECTION 13.1. Representations and Warranties of Institutional Trustee.
The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants, as applicable, to
the Trust and the Sponsor at the time of the Successor Institutional Trustee's
acceptance of its appointment as Institutional Trustee that:
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(a) the Institutional Trustee is a national banking association with
trust powers, duly organized, validly existing and in good standing, with trust
power and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;
(b) the execution, delivery and performance by the Institutional
Trustee of the Declaration has been duly authorized by all necessary corporate
action on the part of the Institutional Trustee. The Declaration has been duly
executed and delivered by the Institutional Trustee, and it constitutes a legal,
valid and binding obligation of the Institutional Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such remedies
is considered in a proceeding in equity or at law);
(c) the execution, delivery and performance of the Declaration by the
Institutional Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the execution,
delivery or performance by the Institutional Trustee of the Declaration.
SECTION 13.2. Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) the Delaware Trustee is a Delaware corporation, duly organized,
validly existing and in good standing, with corporate power and authority to
execute and deliver, and to carry out and perform its obligations under the
terms of, the Declaration;
(b) the Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and the Declaration. The Declaration under
Delaware law constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other similar
laws affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);
(c) no consent, approval or authorization of, or registration with or
notice to, any Delaware or federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of the Declaration;
and
(d) the Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware.
SECTION 13.3. Representations and Warranties of Sponsor.
The Sponsor represents and Warrants to the Trustee that:
(a) the Sponsor has been duly created and is validly existing as a
business trust under the laws of the State of California, with the trust power
to execute and deliver, and to carry out and perform its obligations under the
terms of, the Declaration; and
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(b) the execution, delivery and performance by the Sponsor of the
Declaration has been duly authorized by all necessary trust action on the part
of the Sponsor. The Declaration has been duly executed and delivered by the
Sponsor, and it constitutes a legal, valid and binding obligation of the
Sponsor, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency, and other similar
laws affecting creditors' rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law).
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1. Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders of the Securities):
CT Convertible Trust I
c/o Capital Trust
605 Third Avenue, 26th Floor
New York, NY 10016
Attention: Chief Financial Officer
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):
Wilmington Trust Company
1100 North Market Street
9th Floor
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
(c) if given to the Institutional Trustee, at its Corporate Trust
Office's mailing address set forth below (or such other address as the
Institutional Trustee may give notice of to the Holders of the Securities):
Wilmington Trust Company
1100 North Market Street
9th Floor
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
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(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Trust):
Capital Trust
605 Third Avenue, 26th Floor
New York, NY 10016
Attention: Chief Financial Officer
(e) if given to any other Holder, at the address set forth on the books
and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 14.2. Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 14.3. Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The provisions
of this Declaration shall be interpreted to further this intention of the
parties.
SECTION 14.4. Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 14.5. Successors and Assign.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6. Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
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SECTION 14.7. Counterparts.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
/s/ John R. Klopp
----------------------------------------------------
John R. Klopp, as Regular Trustee
Solely as trustee and not in his individual capacity
/s/ Sheli Z. Rosenberg
----------------------------------------------------
Sheli Z. Rosenberg, as Regular Trustee
Solely as trustee and not in her individual capacity
WILMINGTON TRUST COMPANY, as
Delaware Trustee
By: /s/ Emmett R. Harmon
---------------------------------
Name: Emmett R. Harmon
Title: Vice President
WILMINGTON TRUST COMPANY,
as Institutional Trustee
By: /s/ Emmett R. Harmon
---------------------------------
Name: Emmett R. Harmon
Title: Vice President
CAPITAL TRUST, as Sponsor
By: /s/ John R. Klopp
---------------------------------
Name: John R. Klopp
Title: Chief Executive Officer
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ANNEX I
TERMS OF
8.25% STEP UP CONVERTIBLE TRUST PREFERRED SECURITIES
8.25% STEP UP CONVERTIBLE TRUST COMMON SECURITIES
Pursuant to Section 7.1 of the Declaration of Trust, dated as of July
28, 1998 (as amended from time to time, the "Declaration"), of CT Convertible
Trust I, the designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Convertible Preferred Securities and the
Common Securities are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Declaration):
1. Designation and Number.
(a) Convertible Preferred Securities. 150,000 Convertible Preferred
Securities of the Trust with an aggregate liquidation amount with respect to the
assets of the Trust of One Hundred Fifty Million Dollars ($150,000,000), and a
liquidation amount with respect to the assets of $1,000 per convertible
preferred security, are hereby designated for the purposes of identification
only as "8.25% Step Up Convertible Trust Preferred Securities" (the "Convertible
Preferred Securities"). The Convertible Preferred Security Certificates
evidencing the Convertible Preferred Securities shall be substantially in the
form of Exhibit A-1 to the Declaration, with such letters, numbers, notations,
other means of identification or designation or other changes or additions
thereto or deletions therefrom as may be required by ordinary usage, custom or
practice and such legends or endorsements required by law, state exchange rule
and agreements to which the Trust is subject, if any (provided that any such
notation, legend or endorsement is in a form acceptable to the Trust).
(b) Common Securities. 4,650 Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of Four
Million Six Hundred Fifty Thousand Dollars ($4,650,000), and a liquidation
amount with respect to the assets of the Trust of $1,000 per common security,
are hereby designated for the purposes of identification only as "8.25% Step Up
Convertible Trust Common Securities" (the "Common Securities"). The Common
Securities Certificates evidencing the Common Securities shall be in the form of
Exhibit A-2 to the Declaration, with such letters, numbers, notations, other
means of identification or designation or other changes or additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice and
such legends or endorsements required by law, state exchange rule and agreements
to which the Trust is subject, if any (provided that any such notation, legend
or endorsement is in a form acceptable to the Trust).
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate per
annum of 8.25% of the stated liquidation amount of $1,000 per Security from and
including July 28, 1998 (the "Issuance Date") to and including September 30,
2004, such rate per annum automatically increasing by an additional .75% per
annum (any such increase shall be cumulative with any such prior increase(s)) on
October 1, 2004 and again on each subsequent October 1 (such rate in effect at
any time is hereinafter referred to as the "Coupon Rate"), and such rate being
the rate of interest payable on the Debentures to be held by the Institutional
Trustee. Distributions in arrears for more than one quarter will bear interest
thereon compounded quarterly at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such interest
payable unless otherwise stated. A Distribution is payable only to the extent
that payments are made in respect of the Debentures held by the Institutional
Trustee and to the extent the Institutional Trustee has funds available
therefor. The amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-day year of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
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If Capital Trust pays any Common Dividend during any quarter ending on
a Distribution Payment Date (as defined below), the Coupon Rate in effect for
such quarter shall automatically increase by the Common Rate. For purposes of
this provision, the following terms have the following meanings:
(i) "Common Dividend" means any cash dividend or distribution
payable on the Common Shares of Capital Trust.
(ii) "Common Rate" means, for any quarter, the fraction,
expressed as a percentage rate per annum, the numerator of which is the
aggregate dollar amount of Common Dividend paid on one common share
during such quarter and the denominator of which is $9.00 (subject to
adjustment in proportion to each adjustment to the Conversion Price (as
defined below) triggered by events occurring prior to such quarter).
(b) Distributions on the Securities will be cumulative, will accrue
from July 28, 1998 and will be payable quarterly in arrears, on March 31, June
30, September 30 and December 31 of each year (each a "Distribution Payment
Date"), commencing on September 30, 1998, except as otherwise described below.
So long as the Debenture Issuer shall not be in default in the payment of
interest on the Debentures, and subject to the condition that the prescribed
certification regarding liquidity is made at the commencement of the Extension
Period and at the beginning of each subsequent quarter of such Extension Period,
the Debenture Issuer has the right under the Indenture to defer payments of
interest on the Debentures by extending the interest payment period from time to
time on the Debentures for a period not exceeding 20 consecutive quarters (each
an "Extension Period"), during which Extension Period no interest shall be due
and payable on the Debentures, provided that no Extension Period shall last
beyond the date of maturity or any redemption date of the Debentures. As a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accrue with interest thereon
(to the extent permitted by applicable law) at the Coupon Rate compounded
quarterly during any such Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further extend such Extension Period;
provided that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters or extend beyond the
maturity or any redemption date of the Debentures. Payments of accrued
Distributions and, to the extent permitted by applicable law, accrued interest
thereon shall be payable on the Distribution Payment Date on which the relevant
Extension Period terminates and shall be payable to Holders as they appear on
the books and records of the Trust at the close of business on the record date
next preceding such Distribution Payment Date. Upon the termination of any
Extension Period and the payment of all amounts then due, the Debenture Issuer
may commence a new Extension Period, subject to the above requirements. Each
Extension Period, if any, will end on an interest payment date for the
Debentures; such date will also be a Distribution Payment Date for the
Securities. In the event that the Debenture Issuer exercises its right to defer
payment of interest, then during such Extension Period the Debenture Issuer
shall not (a) declare or pay dividends on, make distributions with respect to,
or redeem, purchase or acquire, or make a liquidation payment with respect to,
any of its Capital Stock, or (b) make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued by
the Debenture Issuer that rank pari passu with or junior in interest to the
Debentures or make any guarantee payments with respect to any guarantee by the
Debenture Issuer of the debt securities of any subsidiary of the Debenture
Issuer if such guarantee ranks pari passu with or junior in interest to the
Debentures (other than (i) as a result of a reclassification of the Capital
Stock of the Debenture Issuer or the exchange or conversion of one class or
series of the Capital Stock of the Debenture Issuer for another class or series
of the Capital Stock of the Debenture Issuer, (ii) the purchase of fractional
interests in shares of the Capital Stock of the Debenture Issuer pursuant to the
conversion or exchange provisions of such Capital Stock or the security being
converted into or exchanged for such Capital Stock, (iii) dividends or
distributions in Common Shares of the Debenture Issuer, (iv) any declaration of
a dividend in connection with the implementation of a shareholders' rights plan,
or the issuance of Capital Stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto, (v) payments under
the Securities Guarantees, (vi) purchases of Common Shares of the Debenture
Issuer related to the issuance of Common Shares of the Debenture Issuer or
rights under any of the Debenture Issuer's benefit plans for its directors,
officers or employees and (vii) obligations under any dividend reinvestment and
stock purchase plans).
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(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates, which shall be fifteen days prior to the relevant payment dates,
which dates correspond to the record and interest payment dates on the
Debentures. The relevant record dates for the Common Securities shall be the
same record dates as for the Convertible Preferred Securities. Distributions
payable on any Securities that are not punctually paid on any Distribution
Payment Date, as a result of the Debenture Issuer having failed to make a
payment under the Debentures, will cease to be payable to the Person in whose
name such Securities are registered on the relevant record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
determined in accordance with the Indenture. If any date on which Distributions
are payable on the Securities is not a Business Day, then payment of the
Distributions payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.
(d) In the event of an election by the Holder to convert its Securities
through the Conversion Agent into Common Shares pursuant to the terms of the
Securities as set forth in this Annex I to the Declaration, no payment,
allowance or adjustment shall be made with respect to accumulated and unpaid
Distributions on such Securities, or be required to be made; provided, however,
that Holders of Securities at the close of business on any record date for the
payment of Distributions will be entitled to receive the Distributions payable
on such Securities on the corresponding payment date notwithstanding the
conversion of such Securities into Common Shares following such record date;
provided, further that if the date of any redemption of related Debentures falls
between such record date and such corresponding payment date, the amount of such
Distribution shall include accumulated and unpaid Distributions accrued to but
excluding such date of redemption and such payment shall be made to the
converting holder.
(e) In the event that there is any money or other property held by or
for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
The Debenture Issuer will have the right at any time to cause the Trust
to be dissolved with the result that, after satisfaction of creditors of the
Trust, Debentures having an aggregate principal amount equal to the aggregate
stated liquidation amount of the Convertible Preferred Securities and the Common
Securities will be distributed on a pro rata basis to the Holders of the
Convertible Preferred Securities and the Common Securities in liquidation of
such Holders' interests in the Trust, within 90 days following notice given to
the Holders of the Convertible Preferred Securities, subject to the Regular
Trustees' receipt of an opinion of nationally recognized independent counsel
experienced in such matters to the effect that the Holders will not recognize
any income, gain or loss for United States federal income tax purposes as a
result of the dissolution of the Trust and such distribution to Holders of
Convertible Preferred Securities.
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust (each a "Liquidation"), the Holders of
the Securities on the date of the Liquidation will be entitled to receive out of
the assets of the Trust available for distribution to Holders of Securities
after satisfaction of liabilities of creditors an amount equal to the aggregate
of the stated liquidation amount of $1,000 per Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"), unless, in connection with such Liquidation, Debentures in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of such Securities, with an interest rate equal to the Coupon Rate of,
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on, such Securities, shall have been distributed on a Pro
Rata basis to the Holders of the Securities in exchange for such Securities.
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If, upon any such Liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) The Debentures will mature on September 30, 2018, and may be
redeemed, in whole or in part, at any time on or after September 30, 2003, or at
any time in certain circumstances upon the occurrence of a Tax Event (as defined
below). Upon the repayment of the Debentures in whole or in part, whether at
maturity, upon redemption (either at the option of the Debenture Issuer or
pursuant to a Tax Event as described below) or otherwise, the proceeds from such
repayment or payment shall be simultaneously applied to redeem Securities having
an aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed at a redemption price per Security equal to the
redemption price of the Debentures, together with accrued and unpaid
Distributions thereon to, but excluding, the date of the redemption, payable in
cash (the "Redemption Price") or the Adjusted Redemption Price specified in the
Indenture, as the case may be. Holders will be given not less than 30 nor more
than 60 days' notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so redeemed,
the Common Securities and the Convertible Preferred Securities will be redeemed
Pro Rata and the Convertible Preferred Securities to be redeemed will be as
described in Section 4(f) below.
(c) If, at any time, a Tax Event or an Investment Company Event (each,
as defined below, a "Special Event") shall occur and be continuing, the Regular
Trustees may with the consent of the Debenture Issuer, except in certain limited
circumstances in relation to a Tax Event described in this Section 4(c),
dissolve the Trust and, after satisfaction of creditors, cause Debentures held
by the Institutional Trustee, having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
Coupon Rate of, and accrued and unpaid interest equal to accrued and unpaid
Distributions on, and having the same record date for payment as the Securities,
to be distributed to the Holders of the Securities in liquidation of such
Holders' interests in the Trust on a Pro Rata basis, within 90 days following
the occurrence of such Special Event (the "90 Day Period"); provided, however,
that such dissolution and distribution shall be conditioned on (i) the Regular
Trustees' receipt of an opinion of nationally recognized independent tax counsel
experienced in such matters (a "No Recognition Opinion"), which opinion may rely
on published revenue rulings of the Internal Revenue Service, to the effect that
the Holders of the Securities will not recognize any gain or loss for United
States federal income tax purposes as a result of the dissolution of the Trust
and the distribution of Debentures, (ii) in the case of a Tax Event, the
Debenture Issuer or the Trust being unable to avoid, within the 90 Day Period,
the Tax Event by taking some ministerial action, such as filing a form or making
an election, or pursuing some other similar reasonable measure that has no
adverse effect on the Trust, the Debenture Issuer, the Sponsor or the Holders of
the Securities ("Ministerial Action"), and (iii) the Debenture Issuer's prior
written consent to such dissolution and distribution.
Furthermore, if (i) after receipt of a Dissolution Tax Opinion (as
defined hereinafter) by the Regular Trustees, the Debenture Issuer has received
an opinion (a "Redemption Tax Opinion") of nationally recognized independent tax
counsel experienced in such matters that, as a result of a Tax Event, there is
more than an insubstantial risk that the Debenture Issuer would be precluded
from deducting the interest on the Debentures for United States federal income
tax purposes even after the Debentures were distributed to the Holders of
Securities in liquidation of such Holders' interests in the Trust as described
in this Section 4(c), or (ii) the Regular Trustees shall have been informed by
such tax counsel that it cannot deliver a No Recognition Opinion to the Trust,
the Debenture Issuer shall have the right, upon not less than 30 nor more than
60 days' notice, to redeem the Debentures, in whole or in part, at a redemption
price equal to 100% of the principal amount thereof plus accrued and unpaid
interest thereon, for cash within 90 days following the occurrence of such Tax
Event. Following such redemption, Securities with an aggregate liquidation
amount equal to the aggregate principal amount of the Debentures so redeemed
shall be redeemed by the Trust at the Redemption Price on a Pro Rata basis;
provided, however, that, if at the time there is available to the Debenture
Issuer or the Trust the
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opportunity to eliminate, within such 90 day period, the Tax Event by taking
some Ministerial Action, the Trust or the Debenture Issuer will pursue such
Ministerial Action in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of nationally recognized independent tax counsel experienced in such
matters (a "Dissolution Tax Opinion") to the effect that on or after July 28,
1998, as a result of (a) any amendment to, clarification of, or change
(including any announced prospective change) in the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, (b) any judicial decision,
official administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or (c) any amendment to,
clarification of, or change in the official position or the interpretation of
such Administrative Action or judicial decision that differs from the
theretofore generally accepted position, in each case, by any legislative body,
court, governmental authority or regulatory body, irrespective of the manner in
which such amendment, clarification, change or Administrative Action is made
known, which amendment, clarification, change or Administrative Action is
effective or such pronouncement or decision is announced, in each case, on or
after, July 28, 1998, there is the creation by such amendment, clarification,
change or Administrative Action of more than an insubstantial risk that (i) the
Trust is, or will be within 90 days of the date thereof, subject to United
States federal income tax with respect to income accrued or received on the
Debentures, (ii) the Trust is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of taxes (other than withholding
taxes), duties or other governmental charges, or (iii) interest paid in cash by
the Debenture Issuer to the Trust on the Debentures is not, or within 90 days of
the date thereof will not be, deductible, in whole or in part, by the Debenture
Issuer for United States federal income tax purposes. Notwithstanding the
foregoing, a Tax Event shall not include any change in tax law that requires the
Debenture Issuer for United States federal income tax purposes to defer taking a
deduction for any original issue discount ("OID") that accrues with respect to
the Debentures until the interest payment related to such OID is paid by the
Debenture Issuer in cash; provided, that such change in tax law does not create
more than an insubstantial risk that the Debenture Issuer will be prevented from
taking a deduction for OID accruing with respect to the Debentures at a date
that is no later than the date the interest payment related to such OID is
actually paid by the Debenture Issuer in cash.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of nationally recognized independent counsel experienced in
such matters to the effect that, as a result of the occurrence of a change in
law or regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority on or after July 28, 1998 (a "Change in 1940 Act Law"), there is more
than an insubstantial risk that the Trust is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act").
After the date fixed by the Regular Trustees for any distribution of
Debentures upon dissolution of the Trust: (i) the Securities will no longer be
deemed to be outstanding and (ii) certificates representing Securities held in
definitive form will be deemed to represent Debentures having an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the Coupon Rate of, and accrued and unpaid interest
(including Compound Interest (as defined in the Indenture)) equal to accrued and
unpaid Distributions on such Securities until such certificates are presented to
the Debenture Issuer or its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding Securities
unless all accrued and unpaid Distributions have been paid on all Securities for
all quarterly Distribution periods terminating on or prior to the date of
redemption.
(e) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution Notice")
will be given by the Trust by mail to each Holder of Securities to be redeemed
or exchanged not fewer than 30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a redemption, will be the
date fixed for redemption of the Debentures.
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For purposes of the calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this Section 4(e), a
Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, or by such other
means suitable to assure delivery of such written notice, to Holders of
Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of Securities at the address of each such Holder appearing in the books
and records of the Trust. No defect in the Redemption/Distribution Notice or in
the mailing of either thereof with respect to any Holder of Securities shall
affect the validity of the redemption or exchange proceedings with respect to
any other Holder of Securities.
(f) In the event that fewer than all the outstanding Securities are to
be redeemed, the Securities to be redeemed shall be redeemed Pro Rata from each
Holder of Convertible Preferred Securities.
(g) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued for a redemption
if the Debentures are redeemed as set out in Article X of the Indenture (which
notice will be irrevocable), then, provided that the Debenture Issuer has paid
the Institutional Trustee a sufficient amount of cash in connection with the
related redemption of the Debentures, the Institutional Trustee will pay the
relevant Redemption Price to the Holders of such Securities by check mailed to
the address of the relevant Holder appearing on the books and records of the
Trust on the redemption date. If a Redemption/Distribution Notice shall have
been given in connection with a redemption and funds deposited as required, then
from and after the required date of such deposit, distributions will cease to
accrue on the Securities so called for redemption and all rights of Holders of
such Securities so called for redemption will cease, except the right of the
Holders of such Securities to receive the Redemption Price or the Adjusted
Redemption Price, as the case may be, but without interest on such Redemption
Price or the Adjusted Redemption Price, as the case may be. If any date fixed
for redemption of Securities is not a Business Day, then payment of the
Redemption Price or the Adjusted Redemption Price, as the case may be, payable
on such date will be made on the next succeeding Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date fixed for redemption. If payment of the Redemption Price
or the Adjusted Redemption Price, as the case may be, in respect of any
Securities is improperly withheld or refused and not paid either by the
Institutional Trustee or by the Sponsor as guarantor pursuant to the relevant
Securities Guarantee, Distributions on such Securities will continue to accrue
from the original redemption date to the actual date of payment, in which case
the actual payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price or the Adjusted Redemption Price,
as the case may be.
Neither the Regular Trustees nor the Trust shall be required (i) in the
event of any redemption in part, to issue, register the transfer of or exchange
any Securities during a period beginning at the opening of business 15 days
before any selection for redemption of Securities and ending at the close of
business on the earliest date in which the relevant Redemption/Distribution
Notice is deemed to have been given to all holders of Securities to be so
redeemed or (ii) to register the transfer of or exchange any Securities selected
for redemption, in whole or in part, except for the unredeemed portion of any
Securities being redeemed in part.
(h) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (i) in respect of Convertible Preferred
Securities, to the Holders thereof, and (ii) in respect of the Common
Securities, to the Holders thereof.
(i) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Sponsor or any of its
subsidiaries may at any time and from time to time purchase outstanding
Convertible Preferred Securities by tender, in the open market or otherwise.
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5. Conversion Rights.
The Holders of Securities shall have the right at any time through the
close of business on the last Business Day prior to the Maturity Date (as
defined in the Indenture) (or, in the case of Securities called for redemption,
prior to the close of business on the Business Day prior to the redemption
date), at their option, to cause the Conversion Agent to convert Securities, on
behalf of the converting Holders, into Common Shares in the manner described
herein on and subject to the following terms and conditions:
(a) The Securities will be convertible at the office of the Conversion
Agent into fully paid and nonassessable Common Shares pursuant to the Holder's
direction to the Conversion Agent to exchange such Securities for a portion of
the Debentures theretofore held by the Trust on the basis of one Security per
$1,000 principal amount of Debentures, and immediately convert such amount of
Debentures into fully paid and nonassessable Common Shares at an initial rate of
85.47 Common Shares per $1,000 principal amount of Debentures (which is
equivalent to a conversion price of $11.70 per Common Share, subject to certain
adjustments set forth in Article XII of the Indenture (as so adjusted, the
"Conversion Price"). At least 1,000, or all of them, if less than 1,000, of the
Securities held by the converting Holder must be converted in connection with
any conversion into Common Shares pursuant to the foregoing.
(b) In order to convert Securities into Common Shares, the Holder shall
submit to the Conversion Agent at its office an irrevocable request to convert
Securities on behalf of such Holder (the "Conversion Request"), together with
such certificates. The Conversion Request shall (i) set forth the number of
Securities to be converted and the name or names, if other than the Holder, in
which the Common Shares should be issued and (ii) direct the Conversion Agent
(a) to exchange such Securities for a portion of the Debentures held by the
Trust (at the rate of exchange specified in the preceding paragraph) and (b) to
immediately convert such Debentures on behalf of such Holder, into Common Shares
(at the conversion rate specified in the preceding paragraph). The Conversion
Agent shall notify the Trust of the Holder's election to exchange Securities for
a portion of the Debentures held by the Trust and the Trust shall, upon receipt
of such notice, deliver to the Conversion Agent the appropriate principal amount
of Debentures for exchange in accordance with this Section. The Conversion Agent
shall thereupon notify Capital Trust of the Holder's election to convert such
Debentures into Common Shares. Holders of Securities at the close of business on
a Distribution record date will be entitled to receive the Distribution payable
on such securities on the corresponding Distribution payment date
notwithstanding the conversion of such Securities following such record date but
prior to such distribution payment date; provided, however, that if the date of
any redemption of the related Debentures falls between such record date and the
related Distribution payment date, the amount of such Distribution shall include
accumulated and unpaid Distributions accrued to but excluding such date of
redemption, and such payment shall be made to the converting Holder. Except as
provided above, neither the Trust nor the Sponsor will make, or be required to
make, any payment, allowance or adjustment upon any conversion on account of any
accumulated and unpaid Distributions accrued on the Securities (including any
Additional Amounts accrued thereon) surrendered for conversion, or on account of
any accumulated and unpaid dividends on the Common Shares issued upon such
conversion, except to the extent that such shares are held of record on the
record date for any such distributions. Securities shall be deemed to have been
converted immediately prior to the close of business on the day on which a
Notice of Conversion relating to such Securities is received by the Trust in
accordance with the foregoing provision (the "Conversion Date"). The Person or
Persons entitled to receive Common Shares issuable upon conversion of the
Debentures shall be treated for all purposes as the record holder or holders of
such Common Shares at such time. As promptly as practicable on or after the
Conversion Date, Capital Trust shall issue and deliver at the office of the
Conversion Agent a certificate or certificates for the number of full Common
Shares issuable upon such conversion, together with the cash payment, if any, in
lieu of any fraction of any share to the Person or Persons entitled to receive
the same, unless otherwise directed by the Holder in the notice of conversion
and the Conversion Agent shall distribute such certificate or certificates to
such Person or Persons.
(c) Each Holder of a Security by his acceptance thereof appoints
Wilmington Trust Company as "Conversion Agent" for the purpose of effecting the
conversion of Securities in accordance with this Section. In effecting the
conversion and transactions described in this Section, the Conversion Agent
shall be acting as agent
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of the Holders of Securities directing it to effect such conversion
transactions. The Conversion Agent is hereby authorized (i) to exchange
Securities from time to time for Debentures held by the Trust in connection with
the conversion of such Securities in accordance with this Section and (ii) to
convert all or a portion of the Debentures into Common Shares and thereupon to
deliver such Common Shares in accordance with the provisions of this Section and
to deliver to the Trust a new Debenture or Debentures for any resulting
unconverted principal amount.
(d) No fractional Common Shares will be issued as a result of
conversion of Securities, but in lieu thereof such fractional interest will be
paid in cash by Capital Trust, in an amount based on the Closing Price of the
Common Shares on the date such Securities are surrendered for conversion, to the
Conversion Agent, which in turn will make such payment to the Holder or Holders
of Securities so converted.
(e) Capital Trust shall at all times reserve and keep available out of
its authorized and unissued Common Shares, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar rights,
such number of Common Shares as shall from time to time be issuable upon the
conversion of all the Debentures then outstanding. Notwithstanding the
foregoing, Capital Trust shall be entitled to deliver upon conversion of
Debentures, Common Shares reacquired and held in the treasury of Capital Trust
(in lieu of the issuance of authorized and unissued Common Shares), so long as
any such treasury shares are free and clear of all liens, charges, security
interests or encumbrances. Any Common Shares issued upon conversion of the
Debentures shall be duly authorized, validly issued and fully paid and
nonassessable. The Trust shall deliver the Common Shares received upon
conversion of the Debentures to the converting Holder free and clear of all
liens, charges, security interests and encumbrances, except for United States
withholding taxes. Each of Capital Trust and the Trust shall prepare and shall
use its best efforts to obtain and keep in force such governmental or regulatory
permits or other authorizations as may be required by law, and shall comply with
all applicable requirements as to registration or qualification of Common Shares
(and all requirements to list Common Shares issuable upon conversion of
Debentures that are at the time applicable), in order to enable Capital Trust to
lawfully issue Common Shares to the Trust upon conversion of the Debentures and
the Trust to lawfully deliver Common Shares to each Holder upon conversion of
the Securities.
(f) Capital Trust will pay any and all taxes that may be payable in
respect of the issue or delivery of Common Shares on conversion of Debentures
and the delivery of the Common Shares by the Trust upon conversion of the
Securities. Capital Trust shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery of
Common Shares in a name other than that in which the Securities so converted
were registered, and no such issue or delivery shall be made unless and until
the person requesting such issue has paid to the Trust the amount of any such
tax, or has established to the satisfaction of the Trust that such tax has been
paid.
(g) Nothing in the preceding Paragraph (f) shall limit the requirement
of the Trust to withhold taxes pursuant to the terms of the Securities or as set
forth in this Annex I to the Declaration or to the Declaration itself or
otherwise require the Institutional Trustee or the Trust to pay any amounts on
account of such withholdings.
(h) The term "Closing Price" with respect to any security on any day
means the last reported sale price, regular way on such day, or, if no sale
takes place on such day, the average of the reported closing bid and asked
prices on such day, regular way, in either case as reported on the NYSE
Composite Tape, or, if such security is not listed or admitted to trading on the
NYSE, on the principal national securities exchange on which such security is
listed or admitted to trading, or, if such security is not listed or admitted to
trading on a national securities exchange, on the National Market System of the
National Association of Securities Dealers, Inc., or, if such security is not
quoted or admitted to trading on such quotation system, on the principal
quotation system on which such security is listed or admitted to trading or
quoted, or, if not listed or admitted to trading or quoted on any national
securities exchange or quotation system, the average of the closing bid and
asked prices of such security in the over-the-counter market on the day in
question as reported by the National Quotation Bureau Incorporated, or a similar
generally accepted reporting service, or, if not so available in such manner, as
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furnished by any NYSE member firm selected from time to time by the Board of
Trustees (or any committee duly authorized by the Board of Trustees) of the
Debenture Issuer for that purpose or, if not so available in such manner, as
otherwise determined in good faith by the Board of Trustees (or any committee
duly authorized by the Board of Trustees) of the Debenture Issuer.
6. Voting and Other Rights - Convertible Preferred Securities.
(a) Except as provided under Sections 6(b) and 8 of this Annex I to the
Declaration and as otherwise required by law and the Declaration, the Holders of
the Convertible Preferred Securities will not have voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in liquidation amount of the Convertible Preferred
Securities then outstanding, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or may direct the exercise of any trust or power
conferred upon the Institutional Trustee under the Declaration, including the
right to direct the Institutional Trustee, as holder of the Debentures, to (i)
exercise the remedies available under the Indenture with respect to the
Debentures, (ii) waive any past default and its consequences that is waivable
under Section 5.9 of the Indenture, or (iii) exercise any right to rescind or
annul a declaration that the principal of all the Debentures shall be due and
payable, provided, however, that if an Event of Default under the Indenture has
occurred and is continuing then the holders of 25% of the aggregate liquidation
amount of the Convertible Preferred Securities then outstanding may direct the
Institutional Trustee to declare the principal of and interest on the Debentures
immediately due and payable; and provided, further, that, where a consent under
the Indenture would require the consent or act of the Holders of greater than a
majority of the Holders in principal amount of Debentures then outstanding (a
"Super Majority") affected thereby, the Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of at least
the proportion in liquidation amount of the Convertible Preferred Securities
which the relevant Super Majority represents of the aggregate principal amount
of the Debentures then outstanding. The Institutional Trustee shall not revoke
any action previously authorized or approved by a vote of the Holders of the
Convertible Preferred Securities. Other than with respect to directing the time,
method and place of conducting any remedy available to the Institutional Trustee
as set forth above, the Institutional Trustee shall not take any action in
accordance with the directions of the Holders of the Convertible Preferred
Securities under this paragraph unless the Institutional Trustee has obtained an
opinion of nationally recognized independent tax counsel experienced in such
matters to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust as a result of
such action. If the Institutional Trustee fails to enforce its rights under the
Debentures, any Holder of Convertible Preferred Securities may institute a legal
proceeding against any person to enforce the Institutional Trustee's rights
under the Debentures. If a Declaration Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay interest or principal on the Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption, on the redemption
date), then a Holder of Convertible Preferred Securities may directly institute
a proceeding for enforcement of payment to such Holder of the principal of or
interest on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Convertible Preferred Securities of such Holder (a
"Direct Action") on or after the respective due date specified in the
Debentures. In connection with such Direct Action, the rights of the Holders of
Common Securities will be subrogated to the rights of such Holder of Convertible
Preferred Securities to the extent of any payment made by the Issuer to such
Holder of Convertible Preferred Securities in such Direct Action. Except as
provided in the preceding sentences, the Holders of Convertible Preferred
Securities will not be able to exercise directly any other remedy available to
the holders of the Debentures.
Any approval or direction of Holders of Convertible Preferred
Securities may be given at a separate meeting of Holders of Convertible
Preferred Securities convened for such purpose, at a meeting of all of the
Holders of Securities in the Trust or pursuant to written consent. The Regular
Trustees will cause a notice of any meeting at which Holders of Convertible
Preferred Securities are entitled to vote, or of any matter upon which action by
written consent of such Holders is to be taken, to be mailed to each Holder of
record of
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Convertible Preferred Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the Holders of the Convertible Preferred
Securities will be required for the Trust to redeem and cancel Convertible
Preferred Securities or to distribute the Debentures in accordance with the
Declaration and the terms of the Securities.
Notwithstanding that Holders of Convertible Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Convertible Preferred Securities that are owned by the Sponsor or any
Affiliate of the Sponsor shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if they were not outstanding.
7. Voting Rights - Common Securities.
(a) Except as provided under Sections 7(b), 7(c) and 8 of this Annex I
of the Declaration and as otherwise required by law and the Declaration, the
Holders of the Common Securities will not have voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after any Event
of Default with respect to the Convertible Preferred Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation amount
of the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section 5.9 of the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable, provided that, where a consent or
action under the Indenture would require the consent or act of the relevant
Super Majority, the Institutional Trustee may only give such consent or take
such action at the written direction of the Holders of at least the proportion
in liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding. The
Institutional Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Convertible Preferred Securities. Other
than with respect to directing the time, method and place of conducting any
remedy available to the Institutional Trustee or the Debenture Trustee as set
forth above, the Institutional Trustee shall not take any action in accordance
with the directions of the Holders of the Common Securities under this paragraph
unless the Institutional Trustee has obtained an opinion of nationally
recognized independent tax counsel experienced in such matters to the effect
that for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action. If the
Institutional Trustee fails to enforce its rights under the Declaration, any
Holder of Common Securities may institute a legal proceeding directly against
any Person to enforce the Institutional Trustee's rights under the Declaration,
without first instituting a legal proceeding against the Institutional Trustee
or any other Person.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Common Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Common Securities. Each such notice will
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include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
8. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities
voting together as a single class, will be entitled to vote on such amendment or
proposal (but not on any other amendment or proposal) and such amendment or
proposal shall not be effective except with the approval of the Holders of at
least a Majority in liquidation amount of the Securities then outstanding
affected thereby; provided, however, if any amendment or proposal referred to in
clause (i) above would adversely affect only the Convertible Preferred
Securities or only the Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of a Majority in liquidation
amount of such class of Securities then outstanding.
(b) In the event the consent of the Institutional Trustee as the holder
of the Debentures is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities then outstanding, voting
together as a single class; provided, however, that where a consent under the
Indenture would require the consent of the relevant Super Majority, the
Institutional Trustee may only give such consent at the direction of the Holders
of at least the proportion in liquidation amount of the Securities then
outstanding which the relevant Super Majority represents of the aggregate
principal amount of the Debentures then outstanding; provided, further, that the
Institutional Trustee shall not take any action in accordance with the
directions of the Holders of the Securities under this Section 8(b) unless the
Institutional Trustee has obtained an opinion of nationally recognized
independent tax counsel experienced in such matters to the effect that for the
purposes of United States federal income tax the Trust will not be classified as
other than a grantor trust as a result of such action.
9. Pro Rata.
A reference in these terms of the Securities to any distribution or
treatment as being "Pro Rata" shall mean pro rata to each Holder of Securities
according to the aggregate liquidation amount of the Securities held by the
relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first in cash to each Holder of the
Convertible Preferred Securities pro rata according to the aggregate liquidation
amount of Convertible Preferred Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Convertible Preferred Securities
outstanding, and only after satisfaction of all amounts owed to the Holders of
the Convertible Preferred Securities, to each Holder of Common Securities pro
rata according to the aggregate liquidation amount of Common Securities held by
the relevant Holder relative to the aggregate liquidation amount of all Common
Securities outstanding.
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10. Ranking.
The Convertible Preferred Securities rank pari passu and payment
thereon shall be made Pro Rata with the Common Securities except that, where a
Declaration Event of Default occurs and is continuing, the rights of Holders of
the Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to payment
of the Holders of the Convertible Preferred Securities.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Convertible Preferred Securities and Common Securities,
by the acceptance thereof, agrees to the provisions of the Convertible Preferred
Securities Guarantee and the Common Securities Guarantee, respectively,
including the subordination provisions therein and to the provisions of the
Indenture.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration. The Sponsor will
provide a copy of the Declaration, the Convertible Preferred Securities
Guarantee or the Common Securities Guarantee (as may be appropriate), and the
Indenture to a Holder without charge on written request to the Sponsor at its
principal place of business.
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EXHIBIT A-1
[FORM OF CONVERTIBLE PREFERRED SECURITY CERTIFICATE]
CERTIFICATE NUMBER:
NUMBER OF CONVERTIBLE PREFERRED SECURITIES:
CUSIP NO.: IF RULE 144A - US1264292087; IF ACCREDITED INVESTOR - US1264293077;
IF REGULATION S -USU126651020
ISIN NO.: USU126651020 - - ONLY IF REGULATION S
A1-1
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Certificate Evidencing Convertible Preferred Securities
of
CT CONVERTIBLE TRUST I
[PRIOR TO THE TRANSFER RESTRICTION TERMINATION DATE, ANY CERTIFICATE EVIDENCING
A CONVERTIBLE PREFERRED SECURITY SHALL BEAR A LEGEND IN SUBSTANTIALLY THE
FOLLOWING FORM, UNLESS OTHERWISE AGREED BY THE REGULAR TRUSTEES (WITH WRITTEN
NOTICE TO THE INSTITUTIONAL TRUSTEE): THE SECURITY EVIDENCED HEREBY HAS NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR
TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED
IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL
ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE
SECURITY EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL
NOT PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION) RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY
OR IF THIS SECURITY IS CONVERTIBLE INTO COMMON SHARES THE COMMON SHARES ISSUABLE
UPON CONVERSION OR EXCHANGE OF THIS SECURITY EXCEPT (A) TO CAPITAL TRUST (THE
"COMPANY") OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE FOR
THE CONVERTIBLE PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE
MAY BE (OR, IF THIS CERTIFICATE EVIDENCES COMMON SHARES, THE TRANSFER AGENT FOR
THE COMMON SHARES), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED
HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR TRANSFER
AGENT), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT OR (F) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO EXPIRATION OF THE HOLDING
PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE FOR THE CONVERTIBLE
PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE (OR, IF
THIS CERTIFICATE EVIDENCES COMMON SHARES, SUCH HOLDER MUST FURNISH TO THE
TRANSFER AGENT SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
COMPANY OR CT CONVERTIBLE TRUST I (THE "TRUST") MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT). IF THIS CERTIFICATE DOES NOT EVIDENCE COMMON SHARES AND IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A
U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE FOR
THE CONVERTIBLE PREFERRED
A1-2
727341.10
<PAGE>
SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE, SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY OR THE TRUST
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED AFTER THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.]
NO LATER THAN 10 DAYS AFTER THE ISSUE DATE OF THE CONVERTIBLE PREFERRED
SECURITIES, INFORMATION CONCERNING THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT, THE ISSUE DATE, AND THE YIELD TO MATURITY (AS THOSE TERMS ARE USED FOR
FEDERAL INCOME TAX PURPOSES) OF THE CONVERTIBLE PREFERRED SECURITIES MAY BE
OBTAINED FROM THE REGULAR TRUSTEES OF CT CONVERTIBLE TRUST I AT 605 THIRD
AVENUE, 26TH FLOOR, NEW YORK, NY 10016.
8.25% Step Up Convertible Trust Preferred Securities
(liquidation amount $1,000 per Convertible Trust Preferred Security)
CT Convertible Trust I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that
__________________ (the "Holder") is the registered owner of convertible
preferred securities of the Trust, representing undivided beneficial interests
in the assets of the Trust, designated as the 8.25% Step Up Convertible Trust
Preferred Securities (liquidation amount $1,000 per Convertible Trust Preferred
Security) (the "Convertible Preferred Securities"). The Convertible Preferred
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer.
The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Convertible Preferred Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Declaration of Trust of the Trust dated as of July 28, 1998, as the same may be
amended from time to time (the "Declaration"), including the designation of the
terms of the Convertible Preferred Securities as set forth in Annex I to the
Declaration.
Capitalized terms used herein but not defined shall have the meaning
given them in the Declaration. The Holder is entitled to the benefits of the
Convertible Preferred Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Convertible Preferred
Securities Guarantee and the Indenture to the Holder without charge upon written
request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Convertible
Preferred Securities as evidence of indirect beneficial ownership in the
Debentures.
Unless the Institutional Trustee's Certificate of Authentication hereon
has been properly executed, these Convertible Preferred Securities shall not be
entitled to any benefit under the Declaration or be valid or obligatory for any
purpose.
A1-3
727341.10
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this 28 day
of July, 1998.
CT Convertible Trust I
By: ____________________________________
Name:
Title: Trustee
Solely as trustee and not in his
individual capacity
A1-4
727341.10
<PAGE>
[FORM OF CERTIFICATE OF AUTHENTICATION]
INSTITUTIONAL TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Preferred Securities referred to in the
within-mentioned Declaration.
Dated: July 28, 1998
Wilmington Trust Company,
as Institutional Trustee or as Authentication Agent
By: _______________________________ By: _______________________________
Authorized Signatory Authorized Signatory
A1-5
727341.10
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Convertible Preferred Security will be
fixed at a rate per annum of 8.25% of the stated liquidation amount of $1,000
per Preferred Security from and including July 28, 1998 (the "Issuance Date") to
and including September 30, 2004, such rate per annum automatically increasing
by an additional .75% per annum (any such increase shall be cumulative with any
such prior increase(s)) on October 1, 2004 and again on each subsequent October
1 (such rate in effect at any time is hereinafter referred to as the "Coupon
Rate"), and such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the Coupon Rate (to
the extent permitted by applicable law). The term "Distributions" as used herein
includes such cash distributions and any such interest payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the extent
the Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 30-day month.
If Capital Trust pays any Common Dividend during any quarter ending on
a Distribution payment date, the Coupon Rate in effect for such quarter shall
automatically increase by the Common Rate.
Except as otherwise described below, Distributions on the Convertible
Preferred Securities will be cumulative, will accrue from July 28, 1998 and will
be payable quarterly in arrears, on March 31, June 30, September 30 and December
31 of each year, commencing on September 30, 1998, which payment dates shall
correspond to the interest payment dates on the Debentures, to Holders of record
at the close of business on the regular record date for such Distribution which
shall be the close of business 15 days prior to such Distribution payment date
unless otherwise provided in the Declaration. The Debenture Issuer has the right
under the Indenture to defer payments of interest by extending the interest
payment period from time to time on the Debentures for a period not exceeding 20
consecutive quarters (each an "Extension Period"); provided that no Extension
Period shall last beyond the date of the maturity or any redemption date of the
Debentures and, as a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to accrue
with interest thereon (to the extent permitted by applicable law) at the Coupon
Rate compounded quarterly during any such Extension Period. Prior to the
termination of any such Extension Period, the Debenture Issuer may further
extend such Extension Period; provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 20 consecutive
quarters or extend beyond the maturity or any redemption date of the Debentures.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.
The Convertible Preferred Securities shall be redeemable as provided in
the Declaration.
The Convertible Preferred Securities shall be convertible into Common
Shares, through (i) the exchange of Convertible Preferred Securities for a
portion of the Debentures and (ii) the immediate conversion of such Debentures
into Debenture Issuer Common Shares, in the manner and according to the terms
set forth in the Declaration.
A1-6
727341.10
<PAGE>
CONVERSION REQUEST
To: Wilmington Trust Company,
as Institutional Trustee of CT Convertible Trust I
The undersigned owner of these Convertible Preferred Securities hereby
irrevocably exercises the option to convert these Convertible Preferred
Securities, or the portion below designated, into Common Shares of Capital Trust
(the "Common Shares") in accordance with the terms of the Declaration of Trust
(the "Declaration"), dated as of July 28, 1998, by John R. Klopp, and Sheli Z.
Rosenberg, as Regular Trustees, Wilmington Trust Company, as Delaware Trustee,
Wilmington Trust Company, as Institutional Trustee, Capital Trust, as Sponsor,
and by the Holders, from time to time, of individual beneficial interests in the
Trust to be issued pursuant to the Declaration. Pursuant to the aforementioned
exercise of the option to convert these Convertible Preferred Securities, the
undersigned hereby directs the Conversion Agent (as that term is defined in the
Declaration) to (i) exchange such Convertible Preferred Securities for a portion
of the Debentures (as that term is defined in the Declaration) held by the Trust
(at the rate of exchange specified in the terms of the Convertible Preferred
Securities set forth as Annex I to the Declaration) and (ii) immediately convert
such Debentures on behalf of the undersigned, into Common Shares (at the
conversion rate specified in the terms of the Convertible Preferred Securities
set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Date: _______________, ____
in whole _____ in part _____
Number of Convertible Preferred Securities to be
converted: ____________________
If a name or names other than the
undersigned, please indicate in the
spaces below the name or names in
which the Common Shares are to be
issued, along with the address or
addresses of such person or persons.
==================================================
==================================================
--------------------------------------------------
--------------------------------------------------
Signature (for conversion only)
A1-7
727341.10
<PAGE>
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or Other
Identifying Number
==================================================
--------------------------------------------------
Signature Guarantee:* __________________________
- --------
* (Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Conversion Agent, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Conversion Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.)
A1-8
727341.10
<PAGE>
[FORM OF ASSIGNMENT FOR DEFINITIVE CONVERTIBLE
PREFERRED SECURITY]
For value received ---------------------- hereby sell(s), assign(s) and
transfer(s) unto --------------------------------------------------------------
- -----------------------------------------
(Please insert social security or other taxpayer identification number of
assignee.)
the within security and hereby irrevocably constitutes and appoints ____________
attorney to transfer the said security on the books of the Company, with full
power of substitution in the premises.
In connection with any transfer of the within security occurring prior to the
Transfer Restriction Termination Date, the undersigned confirms that such
security is being transferred:
/ / To Capital Trust or a subsidiary thereof; or
/ / Pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
/ / To an Institutional Accredited Investor pursuant to and in
compliance with the Securities Act of 1933, as amended; or
/ / Pursuant to and in compliance with Regulation S under the
Securities Act of 1933, as amended; or
/ / Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended; or
/ / Pursuant to an effective registration statement.
and unless the box below is checked, the undersigned confirms that such security
is not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
/ / The transferee is an Affiliate of the Company.
Dated: ___________________________
Signature(s)
--------------------------------------
--------------------------------------
--------------------------------------
Signature Guarantee*
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of this Security in every particular without
alteration or enlargement or any change whatever.
- --------
* (Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Conversion Agent, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Conversion Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.)
A1-9
727341.10
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
CERTIFICATE NUMBER:
NUMBER OF COMMON SECURITIES:
Certificate Evidencing Common Securities
of
CT CONVERTIBLE TRUST I
8.25% Step Up Convertible Trust Common Securities
(liquidation amount $1,000 per Common Security)
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD UNLESS SUCH OFFER AND SALE ARE
REGISTERED UNDER OR ARE EXEMPT FROM REGISTRATION UNDER THE SECURITIES
ACT. THE TRANSFER OF THE SECURITY EVIDENCED HEREBY IS ALSO SUBJECT TO
THE RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO BELOW.
NO LATER THAN 10 DAYS AFTER THE ISSUE DATE OF THE COMMON SECURITIES,
INFORMATION CONCERNING THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT, THE ISSUE DATE, AND THE YIELD TO MATURITY (AS THOSE TERMS ARE
USED FOR FEDERAL INCOME TAX PURPOSES) OF THE COMMON SECURITIES MAY BE
OBTAINED FROM THE REGULAR TRUSTEES OF CT CONVERTIBLE TRUST I AT 605
THIRD AVENUE, 26TH FLOOR, NEW YORK, NY 10016.
CT Convertible Trust I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that
________________________________________ (the "Holder") is the registered owner
of common securities of the Trust representing undivided beneficial interests in
the assets of the Trust designated the 8.25% Step Up Common Securities
(liquidation amount $1,000 per Common Security) (the "Common Securities"). The
Common Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certificate duly
endorsed and in proper form for transfer.
The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Common Securities represented hereby are
issued and shall in all respects be subject to the provisions of the Declaration
of Trust of the Trust dated as of July 28, 1998, as the same may be amended from
time to time (the "Declaration"), including the designation of the terms of the
Common Securities as set forth in Annex I to the Declaration.
Capitalized terms used herein but not defined shall have the meaning
given them in the Declaration. The Holder is entitled to the benefits of the
Common Securities Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Common Securities Guarantee and the
Indenture to a Holder without charge upon written request to the Trust at its
principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
A2-1
727341.10
<PAGE>
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this 28th
day of July, 1998.
CT Convertible Trust I
By: ____________________________________________
Name:
Title: Trustee
Solely as trustee and not in his individual
capacity
A2-2
727341.10
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate
per annum, of 8.25% of the stated liquidation amount of $1,000 per Common
Security, from and including July 28, 1998 (the "Issuance Date") to but
excluding September 30, 2004, such rate per annum automatically increasing by an
additional .75% per annum (any such increase shall be cumulative with any such
prior increase(s)) on October 1, 2004 and again on each subsequent October 1
(such rate in effect at any time is hereinafter referred to as the "Coupon
Rate") and such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the Coupon Rate (to
the extent permitted by applicable law). The term "Distributions" as used herein
includes such cash distributions and any such interest payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the extent
the Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 30-day month.
If Capital Trust pays any Common Dividend during any quarter ending on
a Distribution payment date, the Coupon Rate in effect for such quarter shall
automatically increase by the Common Rate.
Except as otherwise described below, Distributions on the Common
Securities will be cumulative, will accrue from July 28, 1998 and will be
payable quarterly in arrears, on March 31, June 30, September 30 and December 31
of each year, commencing on September 30, 1998, which payment dates shall
correspond to the interest payment dates on the Debentures, to Holders of record
at the close of business on the regular record date for such Distribution which
shall be the close of business 15 days prior to such Distribution payment date
unless otherwise provided in the Declaration. The Debenture Issuer has the right
under the Indenture to defer payments of interest by extending the interest
payment period from time to time on the Debentures for a period not exceeding 20
consecutive quarters (each an "Extension Period"), provided that no Extension
Period shall last beyond the date of maturity of the Debentures and, as a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accrue with interest thereon
(to the extent permitted by applicable law) at the Coupon Rate compounded
quarterly during any such Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further extend such Extension Period;
provided that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters or extend beyond the
date of maturity of the Debentures. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
The Common Securities shall be redeemable as provided in the
Declaration.
The Common Securities shall be convertible into Common Shares, through
(i) the exchange of Common Securities for a portion of the Debentures and (ii)
the immediate conversion of such Debentures into Debenture Issuer Common Shares,
in the manner and according to the term set forth in the Declaration.
A2-3
727341.10
<PAGE>
CONVERSION REQUEST
To: Wilmington Trust Company,
as Institutional Trustee of CT Convertible Trust I
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Shares of Capital Trust (the "Common Shares") in
accordance with the terms of the Declaration of Trust (the "Declaration"), dated
as of July __, 1998, by John R. Klopp and Sheli Z. Rosenberg, as Regular
Trustees, Wilmington Trust Company, as Delaware Trustee, Wilmington Trust
Company, as Institutional Trustee, Capital Trust, as Sponsor, and by the
Holders, from time to time, of individual beneficial interests in the Trust to
be issued pursuant to the Declaration. Pursuant to the aforementioned exercise
of the option to convert these Common Securities, the undersigned hereby directs
the Conversion Agent (as that term is defined in the Declaration) to (i)
exchange such Common Securities for a portion of the Debentures (as that term is
defined in the Declaration) held by the Trust (at the rate of exchange specified
in the terms of the Common Securities set forth as Annex I to the Declaration)
and (ii) immediately convert such Debentures on behalf of the undersigned, into
Common Shares (at the conversion rate specified in the terms of the Common
Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Date: _______________, ____
in whole _____ in part _____
Number of Common Securities to be
converted: ____________________
If a name or names other than the undersigned,
please indicate in the spaces below the name or
names in which the Common Shares are to be
issued, along with the address or addresses of
such person or persons.
================================================
================================================
------------------------------------------------
------------------------------------------------
Signature (for conversion only)
A2-4
727341.10
<PAGE>
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or Other
Identifying Number.
================================================
------------------------------------------------
Signature Guarantee *__________________________
- --------
* (Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Conversion Agent, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Conversion Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.)
A2-5
727341.10
<PAGE>
[FORM OF ASSIGNMENT FOR SECURITY OR
COMMON SHARES ISSUABLE UPON CONVERSION THEREOF]
For value received ---------------------- hereby sell(s), assign(s) and
transfer(s) unto ---------------------------------------------------------------
(Please insert social security or other taxpayer identification number of
assignee.)
the within security and hereby irrevocably constitutes and appoints ____________
attorney to transfer the said security on the books of the Company, with full
power of substitution in the premises.
In connection with any transfer of the within security occurring prior to the
Transfer Restriction Termination Date, the undersigned confirms that such
security is being transferred:
/ / To Capital Trust or a subsidiary thereof; or
/ / Pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
/ / To an Institutional Accredited Investor pursuant to and in
compliance with the Securities Act of 1933, as amended; or
/ / Pursuant to and in compliance with Regulation S under the
Securities Act of 1933, as amended; or
/ / Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended; or
/ / Pursuant to an effective registration statement.
and unless the box below is checked, the undersigned confirms that such security
is not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
/ / The transferee is an Affiliate of the Company.
Dated: ____________________________
Signature(s)
--------------------------------------
--------------------------------------
--------------------------------------
Signature Guarantee*
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of this Security in every particular without
alteration or enlargement or any change whatever.
- --------
* (Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Conversion Agent, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Conversion Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.)
A2-6
727341.10
<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
727341.10
<PAGE>
Exhibit 4.4
- --------------------------------------------------------------------------------
CAPITAL TRUST
and
WILMINGTON TRUST COMPANY,
as Trustee
---------------
8.25% STEP UP CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES
---------------
INDENTURE
Dated as of July 28, 1998
- --------------------------------------------------------------------------------
727411.13
<PAGE>
CAPITAL TRUST
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture dated as of July 28, 1998
Trust Indenture
Act Section Indenture Section
- ---------------- -----------------
310(a)(1)................................................ 6.10
(a)(2)............................................. 6.10
(a)(3)............................................. Not Applicable
(a)(4)............................................. Not Applicable
(a)(5)............................................. 6.10
(b) ............................................. 6.8, 6.10
311(a)................................................... 6.11
(b) ............................................. 6.11
312(a)................................................... 4.1 and 4.2
(b) ............................................. 4.2
(c) ............................................. 4.2
313(a)(1)-(5) & (7)(8)................................... 6.6
(a)(6)............................................. Not Applicable
(b)(1)............................................. Not Applicable
(b)(2)............................................. 6.6
(c) ............................................. 6.6
(d) ............................................. 6.6
314(a)(1)-(3)............................................ 4.3
(a)(4)............................................. 3.4
(b) ............................................. Not Applicable
(c)(1)............................................. 2.6
(c)(2)............................................. 2.6
(c)(3)............................................. Not Applicable
(d) ............................................. Not Applicable
(e) ............................................. 15.5
(f) ............................................. Not Applicable
315(a)................................................... 6.1
(b) ............................................. 6.5
(c) ............................................. 6.1
(d) ............................................. 6.1
(d)(1)............................................. 6.1
(d)(2)............................................. 6.1
(d)(3)............................................. 6.1
(e) ............................................. 5.10
316(a)................................................... 7.4
(a)(1)(A).......................................... 5.8
(a)(1)(B).......................................... 5.1, 5.9
(a)(2)............................................. Not Applicable
(b) ............................................. 5.6
(c) ............................................. 7.1
317(a)(1)................................................ 5.2
727411.13
i
<PAGE>
Trust Indenture
Act Section Indenture Section
- --------------- -----------------
(a)(2) 5.2
(b) 3.3
318(a)................................................... 15.7
- ---------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
727411.13
ii
<PAGE>
TABLE OF CONTENTS
Page
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE I DEFINITIONS.....................................................................................1
Section 1.1 Certain Terms Defined...........................................................................1
ARTICLE II THE CONVERTIBLE DEBENTURES......................................................................9
Section 2.1 Designation and Principal Amount................................................................9
Section 2.2 Maturity........................................................................................9
Section 2.3 Form and Payment................................................................................9
Section 2.4 Exchange and Registration of Transfer of Convertible Debentures;
Restrictions on Transfers; Depositary...........................................................9
Section 2.5 Interest.......................................................................................11
Section 2.6 Authentication and Delivery of Convertible Debentures..........................................12
Section 2.7 Execution of Convertible Debentures............................................................13
Section 2.8 Certificate of Authentication..................................................................13
Section 2.9 Denomination and Date of Convertible Debentures; Payments of Interest..........................13
Section 2.10 Registration, Transfer and Exchange............................................................15
Section 2.11 Mutilated, Defaced, Destroyed, Lost and Stolen Convertible Debentures..........................15
Section 2.12 Cancellation of Convertible Debentures.........................................................16
Section 2.13 Temporary Convertible Debentures...............................................................16
ARTICLE III COVENANTS OF THE COMPANY.......................................................................17
Section 3.1 Payment of Principal and Interest..............................................................17
Section 3.2 Offices for Payment, etc.......................................................................17
Section 3.3 Paying Agents..................................................................................17
Section 3.4 Written Statement to Trustee...................................................................17
Section 3.5 Limitation on Dividends; Transactions with Affiliates..........................................18
Section 3.6 Covenants as to CT Trust.......................................................................18
Section 3.7 Existence......................................................................................18
ARTICLE IV HOLDERS OF CONVERTIBLE DEBENTURES LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE.................................................................18
Section 4.1 Company to Furnish Trustee Information as to Names and Addresses of
Holders of Convertible Debentures..............................................................18
Section 4.2 Preservation and Disclosure of Holders of Convertible Debentures' Lists........................19
Section 4.3 Reports by the Company.........................................................................20
ARTICLE V REMEDIES OF THE TRUSTEE AND HOLDERS OF
CONVERTIBLE DEBENTURES ON EVENT OF DEFAULT.....................................................20
Section 5.1 Event of Default Defined; Acceleration of Maturity; Waiver of Default..........................20
Section 5.2 Collection of Indebtedness by Trustee; Trustee May Prove Debt..................................22
Section 5.3 Application of Proceeds........................................................................23
Section 5.4 Restoration of Rights on Abandonment of Proceedings............................................24
Section 5.5 Limitations on Suits by Holders of Convertible Debentures......................................24
Section 5.6 Unconditional Right of Holders of Convertible Debentures to Institute Certain
Suits..........................................................................................24
Section 5.7 Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default........................24
Section 5.8 Control by Holders of Convertible Debentures...................................................24
Section 5.9 Waiver of Past Defaults........................................................................25
Section 5.10 Right of Court to Require Filing of Undertaking to Pay Costs...................................25
Section 5.11 Suits for Enforcement..........................................................................25
Section 5.12 Unconditional Right of Holders to Receive Principal and Interest and to
Convert........................................................................................26
727411.13
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Page
ARTICLE VI CONCERNING THE TRUSTEE.........................................................................26
Section 6.1 Duties of the Trustee..........................................................................26
Section 6.2 Rights of Trustee..............................................................................27
Section 6.3 Individual Rights of Trustee...................................................................27
Section 6.4 Trustee's Disclaimer...........................................................................27
Section 6.5 Notice of Defaults.............................................................................27
Section 6.6 Reports by Trustee to Holders..................................................................27
Section 6.7 Compensation and Indemnity.....................................................................28
Section 6.8 Replacement of Trustee.........................................................................28
Section 6.9 Successor Trustee by Merger....................................................................29
Section 6.10 Eligibility; Disqualification..................................................................29
Section 6.11 Preferential Collection of Claims Against Company..............................................29
ARTICLE VII CONCERNING THE HOLDERS OF CONVERTIBLE DEBENTURES...............................................29
Section 7.1 Evidence of Action Taken by Holders of Convertible Debentures..................................29
Section 7.2 Proof of Execution of Instruments..............................................................29
Section 7.3 Holders to be Treated as Owners................................................................30
Section 7.4 Convertible Debentures Owned by Company Deemed Not Outstanding.................................30
Section 7.5 Right of Revocation of Action Taken............................................................30
ARTICLE VIII SUPPLEMENTAL INDENTURES........................................................................30
Section 8.1 Supplemental Indentures Without Consent of Holders of Convertible
Debentures.....................................................................................30
Section 8.2 Supplemental Indentures With Consent of Holders of Convertible Debentures......................31
Section 8.3 Effect of Supplemental Indenture...............................................................32
Section 8.4 Documents to Be Given to Trustee...............................................................32
Section 8.5 Notation on Convertible Debentures in Respect of Supplemental Indentures.......................32
ARTICLE IX CONSOLIDATION, MERGER, SALE OR CONVEYANCE......................................................32
Section 9.1 Company May Consolidate, etc., on Certain Terms................................................32
Section 9.2 Successor Corporation Substituted..............................................................33
Section 9.3 Opinion of Counsel to Trustee..................................................................33
ARTICLE X REDEMPTION OF THE CONVERTIBLE DEBENTURES.......................................................33
Section 10.1 Tax Event Redemption...........................................................................33
Section 10.2 Optional Redemption by Company.................................................................34
Section 10.3 No Sinking Fund................................................................................35
Section 10.4 Election to Redeem; Notice of Redemption; Partial Redemptions..................................35
Section 10.5 Payment of Convertible Debentures Called for Redemption........................................36
Section 10.6 Exclusion of Certain Convertible Debentures from Eligibility for Selection
for Redemption.................................................................................36
ARTICLE XI EXTENSION OF INTEREST PAYMENT PERIOD...........................................................37
Section 11.1 Extension of Interest Payment Period...........................................................37
Section 11.2 Notice of Extension............................................................................37
ARTICLE XII CONVERSION OF CONVERTIBLE DEBENTURES...........................................................37
Section 12.1 Conversion Rights..............................................................................37
Section 12.2 Conversion Procedures..........................................................................38
Section 12.3 Conversion Price Adjustments...................................................................39
Section 12.4 Merger, Consolidation or Sale of Assets........................................................42
Section 12.5 Notice of Adjustments of Conversion Price......................................................44
Section 12.6 Prior Notice of Certain Events.................................................................44
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Page
Section 12.7 Certain Additional Rights......................................................................44
Section 12.8 Trustee Not Responsible for Determining Conversion Price or Adjustments........................45
Section 12.9 Reservation of Shares of Common Shares.........................................................45
Section 12.10 Payment of Certain Taxes upon Conversion.......................................................45
Section 12.11 Nonassessability...............................................................................45
ARTICLE XIII SUBORDINATION OF CONVERTIBLE DEBENTURES........................................................45
Section 13.1 Convertible Debentures Subordinate to Senior Indebtedness......................................45
Section 13.2 Payment Over of Proceeds upon Dissolution, Etc.................................................46
Section 13.3 Prior Payment to Senior Indebtedness upon Acceleration of Convertible
Debentures.....................................................................................46
Section 13.4 No Payment When Senior Indebtedness in Default.................................................47
Section 13.5 Payment Permitted in Certain Situations........................................................47
Section 13.6 Subrogation to Rights of Holders of Senior Indebtedness........................................47
Section 13.7 Provisions Solely to Define Relative Rights....................................................47
Section 13.8 Trustee to Effectuate Subordination............................................................48
Section 13.9 No Waiver of Subordination Provisions..........................................................48
Section 13.10 Notice to Trustee..............................................................................48
Section 13.11 Reliance on Judicial Order or Certificate of Liquidating Agent.................................49
Section 13.12 Trustee Not Fiduciary for Holders of Senior Indebtedness.......................................49
Section 13.13 Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustee's
Rights.........................................................................................49
Section 13.14 Article Applicable to Paying Agents............................................................49
Section 13.15 Certain Conversions Deemed Payment.............................................................49
ARTICLE XIV EXPENSES.......................................................................................50
Section 14.1 Payment of Expenses............................................................................50
Section 14.2 Payment Upon Resignation or Removal............................................................50
ARTICLE XV MISCELLANEOUS PROVISIONS.......................................................................50
Section 15.1 Incorporators, Stockholders, Officers and Trustees of Company Exempt from
Individual Liability...........................................................................50
Section 15.2 Provisions of Indenture for the Sole Benefit of Parties and Holders of
Convertible Debentures.........................................................................50
Section 15.3 Right to Assign; Successors and Assigns Bound by Indenture.....................................51
Section 15.4 Notices and Demands on Company, Trustee and Holders of Convertible
Debentures.....................................................................................51
Section 15.5 Officers' Certificates and Opinions of Counsel; Statements to Be Contained
Therein........................................................................................51
Section 15.6 Payments Due on Saturdays, Sundays and Holidays................................................52
Section 15.7 Conflict of Any Provision of Indenture with Trust Indenture Act................................52
Section 15.8 New York Law to Govern.........................................................................52
Section 15.9 Counterparts...................................................................................52
Section 15.10 Effect of Headings; Gender.....................................................................52
</TABLE>
727411.13
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THIS INDENTURE, dated as of July 28, 1998, between CAPITAL TRUST, a
California business trust (the"Company"), and Wilmington Trust Company, (the
"Trustee"),
W I T N E S S E T H:
WHEREAS, the Company desires and has requested the Trustee to join it
in the execution and delivery of this Indenture in order to establish and
provide for the issuance by the Company of Convertible Debentures designated as
its 8.25% Step Up Convertible Junior Subordinated Debentures (the "Convertible
Debentures"), a specimen copy of which is attached hereto as Exhibit A, on the
terms set forth herein;
WHEREAS, CT Convertible Trust I, a Delaware statutory business trust
("CT Trust" or the "Trust"), has offered to certain investors in a private
placement $150,000,000 aggregate liquidation amount of its 8.25% Step Up
Convertible Trust Preferred Securities (the "Convertible Preferred Securities"),
representing undivided beneficial interests in the assets of the Trust, and
proposes to invest the proceeds from such offering, together with the proceeds
of the issuance and sale by the Trust to the Company of $4,650,000 aggregate
liquidation amount of its Common Securities, in $154,650,000 aggregate principal
amount of the Convertible Debentures; and
WHEREAS, all things necessary to make this Indenture a valid agreement
of the Company and the Trustee, in accordance with its terms, have been done.
NOW, THEREFORE:
There is hereby established the terms of the Convertible Debentures to
be issued under this Indenture, which shall be as set forth herein and in the
form of Convertible Debentures attached hereto as Exhibit A, and in
consideration of the premises and the purchase and acceptance of the Convertible
Debentures by the holders thereof, the Company mutually covenants and agrees
with the Trustee, for the equal and proportionate benefit of all holders of the
Convertible Debentures, as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Terms Defined. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section. All other terms
used in this Indenture that are defined in the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), or the definitions of which in the
Securities Act of 1933, as amended (the "Securities Act"), are referred to in
the Trust Indenture Act, including terms defined therein by reference to the
Securities Act (except as herein otherwise expressly provided or unless the
context otherwise clearly requires), shall have the meanings assigned to such
terms in the Trust Indenture Act and in the Securities Act as in force at the
date of this Indenture. All accounting terms used herein and not expressly
defined shall have the meanings assigned to such terms in accordance with
generally accepted accounting principles, and the term "generally accepted
accounting principles" means such accounting principles as are generally
accepted at the time of any computation. The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Indenture as a
whole, as supplemented and amended from time to time, and not to any particular
Article, Section or other subdivision. The terms defined in this Article have
the meanings assigned to them in this Article and include the plural as well as
the singular.
"Additional Sums" shall have the meaning set forth in Section 2.5(c).
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Applicable Price" means (i) in the event of a Non-Share Fundamental
Change in which the holders of the Common Shares receive only cash, the amount
of cash received by a holder of one Common Share and (ii) in the event of any
other Fundamental Change, the average of the daily Closing Price for one Common
Share during the
727411.13
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10 Trading Days immediately prior to the record date for the determination of
the holders of Common Shares entitled to receive cash, securities, property or
other assets in connection with such Fundamental Change or, if there is no such
record date, prior to the date upon which the holders of the Common Shares shall
have the right to receive such cash, securities, property or other assets.
"Applicants" has the meaning specified in Section 4.2(b).
"Board of Trustees" means either the Board of Trustees of the Company
or any duly authorized committee of that Board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Trustees and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day other than a Saturday, Sunday, or any
other day on which banking institutions in New York, New York or Wilmington,
Delaware are permitted or required by any applicable law to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, units representing interests, participations, rights in or other
equivalents (however designated) of such Person's capital stock, including, with
respect to partnerships and business trusts, partnership interests (whether
general or limited), beneficial interests and any other interest or
participation that confers upon a Person the right to receive a share of the
profits and losses of, or distributions of assets of, such partnership or
business trust, and any rights (other than debt securities convertible into
capital stock), warrants or options exchangeable for or convertible into such
capital stock.
"Certificated Convertible Preferred Securities" means Convertible
Preferred Securities issued in definitive registered form.
"Closing Price" with respect to any security on any day means the last
reported sale price, regular way on such day, or, if no sale takes place on such
day, the average of the reported closing bid and asked prices on such day,
regular way, in either case as reported on the NYSE Composite Tape, or, if such
security is not listed or admitted to trading on the New York Stock Exchange, on
the principal national securities exchange on which such security is listed or
admitted to trading, or, if such security is not listed or admitted to trading
on a national securities exchange, on the National Market System of the National
Association of Securities Dealers, Inc., or, if such security is not quoted or
admitted to trading on such quotation system, on the principal quotation system
on which such security is listed or admitted to trading or quoted, or, if not
listed or admitted to trading or quoted on any national securities exchange or
quotation system, the average of the closing bid and asked prices of such
security in the over-the-counter market on the day in question as reported by
the National Quotation Bureau Incorporated, or a similar generally accepted
reporting service, or, if not so available in such manner, as furnished by any
New York Stock Exchange member firm selected from time to time by the Board of
Trustees (or any committee duly authorized by the Board of Trustees) of the
Company for that purpose or, if not so available in such manner, as otherwise
determined in good faith by the Board of Trustees (or any committee duly
authorized by the Board of Trustees) of the Company.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, as amended, or if at any
time after the execution and delivery 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 on such date.
"Common Securities" means undivided beneficial interests in the assets
of the CT Trust which rank pari passu with Convertible Preferred Securities
issued by the CT Trust; provided, however, that upon the occurrence of an Event
of Default, the rights of holders of Common Securities to payment in respect to
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Convertible Preferred Securities.
727411.13
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<PAGE>
"Common Securities Guarantee" means the Common Securities Guarantee
Agreement dated as of July 28, 1998 by the Guarantor.
"Common Shares" includes class A common shares of beneficial interest,
$1.00 par value, in the Company which has no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Company and which is not subject to redemption
by the Company.
"Common Share Fundamental Change" means any Fundamental Change in which
more than 50% of the value (as determined in good faith by the Board of Trustees
of the Company) of the consideration received by holders of Common Shares
consists of common stock that, for the 10 Trading Days immediately prior to such
Fundamental Change, has been admitted for listing or admitted for listing
subject to notice of issuance on a national securities exchange or quoted on The
Nasdaq National Market; provided, however, that a Fundamental Change shall not
be a Common Share Fundamental Change unless either (i) the Company continues to
exist after the occurrence of such Fundamental Change and the outstanding
Convertible Debentures continue to exist as outstanding Convertible Debentures,
or (ii) not later than the occurrence of such Fundamental Change, the
outstanding Convertible Debentures are converted into or exchanged for
convertible debentures of a corporation succeeding to the business of the
Company, which convertible debentures have terms substantially similar to those
of the Convertible Debentures.
"Company" means Capital Trust, a California business trust, until a
successor corporation shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Company" shall mean such successor
corporation.
"Compound Interest" shall have the meaning specified in Section 11.1.
"Convertible Debenture" or "Convertible Debentures" has the meaning
stated in the first recital of this Indenture and more particularly means any
Convertible Debentures authenticated and delivered under this Indenture.
"Convertible Preferred Securities" has the meaning specified in the
recitals to this Indenture.
"Conversion Agent" has the meaning assigned thereto in the Declaration.
"Conversion Date" has the meaning specified in Section 12.2(a).
"Conversion Price" has the meaning set forth in Section 12.1.
"Corporate Trust Office" means the principal corporate trust office of
the Trustee at which at any particular time its corporate trust business shall
be administered, which office at the date of execution of this Indenture is
located at 1100 North Market Street, 9th Floor, Wilmington, Delaware 19890-0001,
Attention:
Corporate Trust Administration.
"Coupon Rate" has the meaning specified in Section 2.5(a).
"Declaration" means the Declaration of Trust of CT Convertible Trust I,
a Delaware statutory business trust, dated as of July 28, 1998.
"Debt" of a Person means, all indebtedness of such Person which is for
money borrowed.
"defaulted interest" has the meaning specified in Section 2.9.
"Deferred Interest" has the meaning specified in Section 11.1.
"Delaware Trustee" has the meaning specified in the Declaration.
727411.13
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<PAGE>
"Dissolution Event" means that, as a result of the occurrence and
continuation of a Special Event (as described in the Declaration), the Trust is
to be dissolved in accordance with the Declaration, and the Convertible
Debentures held by the Institutional Trustee are to be distributed to the
holders of the Trust Securities issued by the Trust pro rata in accordance with
the Declaration.
"Dollar" means the coin or currency of the United States of America
which as of the time of payment is legal tender for the payment of public and
private debts.
"EOPLP" means EOP Operating Limited Partnership, an Delaware limited
partnership.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expiration Date" has the meaning specified in Section 12.3(e).
"Extension Period" has the meaning specified in Section 11.1.
"Fundamental Change" means the occurrence of any transaction or event
or series of transactions or events pursuant to which all or substantially all
of the Common Shares shall be exchanged for, converted into, acquired for or
shall constitute solely the right to receive cash, securities, property or other
assets (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise); provided, however, in the case of any such series of transactions or
events, for purposes of adjustment of the Conversion Price, such Fundamental
Change shall be deemed to have occurred when substantially all of the Common
Shares shall have been exchanged for, converted into or acquired for, or shall
constitute solely the right to receive, such cash, securities, property or other
assets, but the adjustment shall be based upon the consideration that the
holders of Common Shares received in the transaction or event as a result of
which more than 50% of the Common Shares shall have been exchanged for,
converted into or acquired for, or shall constitute solely the right to receive,
such cash, securities, property or other assets.
"GM Trusts" means Mellon Bank N.A., as trustee for General Motors
Hourly-Rate Employes Pension Trust, a New York trust, and Mellon Bank N.A., as
trustee for General Motors Salaried Employes Pension Trust, a New York trust.
"Government Obligations" means securities which are (i) direct
obligations of the United States government for which its full faith and credit
is pledged or (ii) obligations of a Person controlled or supervised by, or
acting as an agency or instrumentality of, the United States government, the
payment of which obligations is unconditionally guaranteed by the United States
government, and which, in either case, are full faith and credit obligations of
the United States government, and which are not callable or redeemable at the
option of the issuer thereof prior to their stated maturity.
"Guarantor" means the Company in its capacity as guarantor under any
Trust Securities Guarantees.
"Holder" or "Holder of Convertible Debentures" or other similar terms
mean the person in whose name such Convertible Debenture is registered in the
Security Register.
"incur" means to issue, incur, assume, guarantee, become liable,
contingently or otherwise, with respect to, or otherwise become responsible for
the payment of, any Debt.
"Indenture" means this instrument as originally executed and delivered
or as it may from time to time be amended or supplemented as herein provided, as
so amended or supplemented or both, and shall include the forms and terms of the
Convertible Debentures appearing as Exhibit A to this instrument.
"Institutional Trustee" has the meaning specified in the Declaration.
727411.13
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<PAGE>
"Interest Payment Date," when used with respect to any Convertible
Debenture, means the Stated Maturity of an installment of interest on such
Convertible Debenture.
"Issuance Date" has the meaning set forth in Section 2.5(a).
"Lien" means any mortgage or deed of trust, pledge, assignment,
security interest, lien, charge, or other encumbrance or preferential
arrangement (including, without limitation, any conditional sale or other title
retention agreement having substantially the same economic effect as any of the
foregoing).
"Majority Holders" means Holders of not less than a majority in
aggregate principal amount of the Convertible Debentures at the time outstanding
immediately prior to the redemption pursuant to Section 10.1 or the Non-Share
Fundamental Change for which the Conversion Price is subject to adjustment
pursuant to Section 12.4 (voting as one class).
"Maturity" when used with respect to any Convertible Debenture means
the date on which the principal of such Convertible Debenture or an installment
of principal becomes due and payable as therein or herein provided, whether at
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise.
"Maturity Date" means the date on which the Convertible Debentures
mature and on which the principal shall be due and payable together with all
accrued and unpaid interest thereon including Additional Sums, if any, and (to
the extent permitted by applicable law) Compound Interest, if any.
"Ministerial Action" has the meaning specified in Section 10.1(a)
"90-Day Period" has the meaning specified in Section 10.1(a).
"Non-Share Fundamental Change" means any Fundamental Change other than
a Common Share Fundamental Change.
"Non-U.S. Person" means any person that is not a "U.S. person" as such
term is defined in Rule 902 under the Securities Act.
"Notice of Conversion" has the meaning specified in Section 12.2(a).
"Offeror" has the meaning specified in Section 2.4(c).
"Officers' Certificate" means a certificate signed on behalf of the
Company by the Chairman of the Board of Trustees or any vice chairman or the
president or any vice president and by the chief financial officer, the
treasurer, the controller, any assistant treasurer, the secretary or any
assistant secretary of the Company and delivered to the Trustee. Each such
certificate shall include the statements provided for in Section 15.5.
"Opinion of Counsel" means a written opinion of legal counsel, who may
be an employee of or counsel to the Company, and who shall be reasonably
acceptable to the Trustee. Each Opinion of Counsel shall include the statements
provided for in Section 15.5, if and to the extent required hereby.
"Optional Redemption Price" has the meaning specified in Section 10.2.
"Outstanding" when used with reference to Convertible Debentures,
subject to the provisions of Section 7.4, means, as of any particular time, all
Convertible Debentures authenticated and delivered under this Indenture, except
(a) Convertible Debentures theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) Convertible Debentures, or portions thereof, for the
payment or redemption of which moneys in the necessary amount and in
the required currency shall have been deposited in trust with the
727411.13
5
<PAGE>
Trustee or with any Paying Agent (other than the Company) or shall have
been set aside, segregated and held in trust by the Company for the
Holders of such Convertible Debentures (if the Company shall act as its
own Paying Agent), provided that if such Convertible Debentures, or
portions thereof, are to be redeemed prior to the Maturity thereof,
notice of such redemption shall have been given as herein provided, or
provision satisfactory to the Trustee shall have been made for giving
such notice; and
(c) Convertible Debentures that have been paid pursuant to
Section 2.11, converted into Common Shares pursuant to Article XII, or
in exchange for or in lieu of which other Convertible Debentures have
been authenticated and delivered pursuant to the Indenture (except with
respect to any such Convertible Debenture as to which proof
satisfactory to the Trustee and the Company is presented that such
Convertible Debenture is held by a person in whose hands such
Convertible Debenture is a legal, valid and binding obligation of the
Company).
"Paying Agent" means any Person (which may include the Company)
authorized by the Company to pay the principal of or interest, if any, on any
Convertible Debenture on behalf of the Company.
"Persons" or "Person" means any individual, corporation, partnership,
joint venture, limited liability company, association, joint stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Convertible
Debentures, means the place or places where the principal of and interest, if
any, on the Convertible Debentures are payable as specified pursuant to Section
3.2.
"Predecessor Convertible Debenture" of a Convertible Debenture means
every previous Convertible Debenture evidencing all or a portion of the same
debt as that evidenced by such Convertible Debenture; and, for the purposes of
this definition, a Convertible Debenture authenticated and delivered under
Section 2.11 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Convertible Debenture shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Convertible Debenture.
"Preferred Securities Guarantee" means the Preferred Securities
Guarantee Agreement dated as of July 28, 1998 between the Guarantor and
Wilmington Trust Company, as Preferred Guarantee Trustee.
"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of such Person of any class or classes (however designated) that
ranks prior, as to the payment of dividends or as to the distribution of assets
upon any voluntary or involuntary liquidation, dissolution or winding up of such
Person, to shares of Capital Stock of any other class of such Person.
"principal" whenever used with reference to the Convertible Debentures
or any Convertible Debenture or any portion thereof, shall be deemed to include
"and premium, if any."
"Purchaser Share Price" means, with respect to any Common Share
Fundamental Change, the average of the daily Closing Price for one share of the
common stock received by holders of Common Shares (determined as provided
herein) in such Common Share Fundamental Change during the five Trading Days
immediately prior to the date fixed for the determination of the holders of
Common Shares entitled to receive such common stock or, if there is no such
date, prior to the date upon which the holders of Common Shares shall have the
right to receive such common stock, in each case, as adjusted in good faith by
the Board of Directors of the Company (whose good faith determination shall be
conclusive and described in a resolution of the Board of Directors submitted to
the Trustee) to appropriately reflect events of a type analogous to any of the
events that trigger adjustments to the Conversion Price as set forth in Section
12.3 herein.
"QIB" or "Qualified Institutional Buyer" shall mean "Qualified
Institutional Buyer" as such term is defined in Rule 144A under the Securities
Act.
"record date" has the meaning specified in Section 2.9.
727411.13
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<PAGE>
"Redemption Date" has the meaning specified in Section 10.1(a).
"Reference Date" has the meaning specified in Section 12.3(c).
"Reference Market Price" initially means $11.70 and, in the event of
any adjustment to the Conversion Price other than as a result of a Fundamental
Change, the Reference Market Price shall also be adjusted so that the ratio of
the Reference Market Price to the Conversion Price after giving effect to any
such adjustment shall also be the same as the ratio of the initial Reference
Market Price to the initial Conversion Price.
"Registrar" has the meaning specified in Section 2.10.
"Regulation S" means Regulation S under the Securities Act.
"Representative" means (a) the indenture trustee or other trustee,
agent or representative for any Senior Indebtedness or (b) with respect to any
Senior Indebtedness that does not have any such trustee, agent or other
representative (i) in the case of such Senior Indebtedness issued pursuant to an
agreement providing for voting arrangements as among the holders or owners of
such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting
with the consent of the required persons necessary to bind such holders or
owners of such Senior Indebtedness and (ii) in the case of all other such Senior
Indebtedness, the holder or owner of such Senior Indebtedness.
"Responsible Officer" when used with respect to the Trustee means any
officer within the corporate trust department (or any successor department) of
the Trustee including any vice president, assistant vice president, assistant
secretary, senior trust officer, trust officer or any other officer or assistant
officer of the Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred at the Corporate Trust Office
because of his or her knowledge of and familiarity with the particular subject.
"Restricted Convertible Debenture" has the meaning specified in Section
2.4(a).
"Rule 144" means Rule 144 under the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Sales Notice" has the meaning specified in Section 2.4(c).
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" has the meaning specified in Section 2.10.
"Senior Indebtedness" means, with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (a) indebtedness of the
Company for money borrowed (but excluding trade accounts payable arising in the
ordinary course of business) under any credit agreements, notes, guarantees or
similar documents and (b) indebtedness evidenced by securities, debentures,
bonds or other similar instruments issued by the Company; (ii) all capital lease
obligations of the Company; (iii) all obligations of the Company issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of the Company and all obligations of the Company under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business); (iv) all obligations of the Company for the
reimbursement on any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction; (v) all obligations of the Company
(contingent or otherwise) with respect to an interest rate or other swap, cap or
collar agreements or other similar instruments or agreements or foreign currency
hedge, exchange, purchase or similar instruments or agreements; (vi) all
obligations of the types referred to in clauses (i) through (v) of other Persons
for the payment of which the Company is responsible or liable as obligor,
guarantor or otherwise; and (vii) all obligations of the types referred to in
clauses (i) through (vi) above of other Persons secured by any lien on any
property or asset of the Company (whether or not such obligation is assumed by
the Company), whether outstanding on the date of this Indenture or thereafter
created, incurred, assumed, guaranteed or in effect guaranteed by the Company,
except for any such
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indebtedness that is by its terms subordinated to or pari passu with the
Convertible Debentures. Such Senior Indebtedness shall continue to be Senior
Indebtedness irrespective of any deferrals, renewals, extensions or refundings
of, or amendments, modifications, supplements or waivers of any term of such
Senior Indebtedness.
"Stated Maturity" when used with respect to any Convertible Debenture
or any installment of principal thereof or interest thereon, means the date on
which the principal of such Convertible Debenture or such installment of
principal or interest is due and payable in accordance with the terms thereof.
"Subsidiary" means any corporation, association, partnership or other
business entity of which more than 50% of the total voting power of the
outstanding Capital Stock (or other interests) entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, general
partners, managers, managing members, managing partners or trustees thereof or,
if such persons are not elected, to vote on any matter that is submitted to the
vote of all persons holding ownership interests in such entity is at the time
owned or controlled, directly or indirectly, by (i) the Company, (ii) the
Company and one or more Subsidiaries or (iii) one or more Subsidiaries.
"Trading Day" shall mean a day on which any securities are traded on
the national securities exchange or quotation system used to determine the
Closing Price.
"Transfer Restriction Termination Date" means the earlier of the first
date on which (i) the Convertible Preferred Securities, the Convertible
Debentures and any Common Shares issued or issuable upon the conversion or
exchange thereof (other than (A) such securities acquired by the Company or any
Affiliate thereof since the Issue Date of the Convertible Preferred Securities
and (B) Common Shares issued upon the conversion or exchange of any such
security described in clause (A) above) may be sold pursuant to Rule 144(k) (or
any successor provision) and (ii) all of such Convertible Preferred Securities,
Convertible Debentures and/or Common Shares shall have been sold pursuant to an
effective registration statement.
"Trust" or "CT Trust" means CT Convertible Trust I, a Delaware
statutory business trust.
"Trust Indenture Act" or "TIA" (except as otherwise provided in
Sections 8.1 and 8.2) means the Trust Indenture Act of 1939, as amended, as in
force at the date as of which this Indenture was originally executed.
"Trust Securities" means the Common Securities and the Convertible
Preferred Securities of CT Trust.
"Trust Securities Guarantees" means the Common Securities Guarantee and
the Preferred Securities Guarantee.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof until a successor Trustee shall have become such pursuant to
the provisions hereof, and thereafter, "Trustee" shall mean or include each
Person who is then a Trustee hereunder.
"United States of America" or "United States" means the United States
of America (including the states and the District of Columbia), its territories,
possessions, the Commonwealth of Puerto Rico and other areas subject to its
jurisdiction.
"U.S. Person" means (i) a citizen or resident of the United States,
(ii) a corporation, partnership or other entity created or organized in or under
the laws of the United States or any state or political subdivision thereof,
(iii) an estate the income of which is subject to United States federal income
taxation regardless of its sources or (iv) a trust whose administration is
subject to the primary supervision of a United States court and which has one or
more United States fiduciaries who have the authority to control all substantial
decisions of the Trust.
"vice president" when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title of "vice president."
"VRLP" means Vornado Realty L.P., a Delaware limited partnership.
727411.13
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ARTICLE II
THE CONVERTIBLE DEBENTURES
Section 2.1 Designation and Principal Amount. There are hereby
authorized Convertible Debentures designated the "8.25% Step Up Convertible
Junior Subordinated Debentures," limited in aggregate principal amount to
$154,650,000 which amount shall be as set forth in any written order of the
Company for the authentication and delivery of Convertible Debentures pursuant
to Section 2.6 of this Indenture.
Section 2.2 Maturity. The Maturity Date is September 30, 2018.
Section 2.3 Form and Payment.
(a) Except as provided in Section 2.6, the Convertible Debentures shall
be issued in fully registered certificated form without coupons in denominations
of $1,000 in principal amount and integral multiples thereof. Principal and
interest on the Convertible Debentures issued in certificated form will be
payable, the transfer of such Convertible Debentures will be registrable and
such Convertible Debentures will be exchangeable for Convertible Debentures
bearing identical terms and provisions at the office or agency of the Trustee;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the Holder at such address as shall appear in the
Security Register. Notwithstanding the foregoing, so long as the Holder of any
Convertible Debentures is the Institutional Trustee, the payment of the
principal of and interest (including Compound Interest and Additional Sums, if
any) on such Convertible Debentures held by the Institutional Trustee will be
made in immediately available funds at such place and to such account as may be
designated by the Institutional Trustee.
(b) The Convertible Debentures are subject to the terms set forth in
this Indenture including, without limitation, Exhibit A hereto, the terms of
which are hereby incorporated in their entirety by reference.
(c) The Convertible Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the form of
Exhibit A to this Indenture.
(d) The definitive Convertible Debentures shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Convertible
Debentures, as evidenced by their execution of such Convertible Debentures.
Section 2.4 Exchange and Registration of Transfer of Convertible
Debentures; Restrictions on Transfers; Depositary.
(a) Each Convertible Debenture that bears or is required to bear the
legend set forth in this Section 2.4(a) (a "Restricted Convertible Debenture")
shall be subject to the restrictions on transfer provided in the legend set
forth in this Section 2.4(a), unless such restrictions on transfer shall be
waived by the written consent of the Company, and the Holder of each Restricted
Convertible Debenture, by such Holder's acceptance thereof, agrees to be bound
by such restrictions on transfer. As used in this Section 2.4(a) and in Section
2.4(b), the term "transfer" encompasses any sale, pledge, transfer or other
disposition of any Restricted Convertible Debenture.
Prior to the Transfer Restriction Termination Date, any certificate
evidencing a Convertible Debenture shall bear a legend in substantially the
following form, unless otherwise agreed by the Company (with written notice
thereof to the Trustee):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN
THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED
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IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT)
("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON
AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN OFFSHORE
TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY
UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION)
RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR, IF THIS
SECURITY IS CONVERTIBLE INTO COMMON SHARES, THE COMMON SHARES ISSUABLE
UPON CONVERSION OR EXCHANGE OF THIS SECURITY EXCEPT (A) TO CAPITAL
TRUST (THE "COMPANY") OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (D) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR
TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE FOR THE CONVERTIBLE
PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE
(OR, IF THIS CERTIFICATE EVIDENCES COMMON SHARES, THE TRANSFER AGENT
FOR THE COMMON SHARES), A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM SUCH TRUSTEE OR TRANSFER AGENT), (E) OUTSIDE THE UNITED
STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (F)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE), AND (3) AGREES THAT IT WILL DELIVER
TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH
ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO THE EXPIRATION
OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE FOR THE CONVERTIBLE PREFERRED SECURITIES OR
THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE (OR, IF THIS CERTIFICATE
EVIDENCES COMMON SHARES, SUCH HOLDER MUST FURNISH TO THE TRANSFER AGENT
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY
OR CT CONVERTIBLE TRUST I (THE "TRUST") MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT). IF THIS CERTIFICATE DOES NOT EVIDENCE COMMON
SHARES AND IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED
INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE FOR THE CONVERTIBLE
PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE,
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY
OR THE TRUST MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS
LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN
TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Following the Transfer Restriction Termination Date, any Convertible
Debenture or security issued in exchange or substitution therefor (other than
(i) Convertible Debentures acquired by the Company or any Affiliate thereof
since the issue date of the Convertible Preferred Securities and (ii) Common
Shares issued upon the conversion or exchange of any Convertible Debenture
described in clause (i) above) may upon surrender of such Convertible Debenture
for exchange to the Registrar in accordance with the provisions of this Section
2.4, be
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exchanged for a new Convertible Debenture or Convertible Debentures, of like
tenor and aggregate principal amount, which shall not bear the restrictive
legend required by this Section 2.4(a).
(b) Any Convertible Debenture or Common Shares issued upon the
conversion or exchange of a Convertible Debenture that, prior to the Transfer
Restriction Termination Date, is purchased or owned by the Company or any
Affiliate thereof may not be resold by the Company or such Affiliate unless
registered under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction which results
in such Convertible Debentures or Common Shares, as the case may be, no longer
being "restricted securities" (as defined under Rule 144).
(c) Each Convertible Debenture shall be subject to the restrictions on
transfer provided in this Section 2.4(c).
(i) If a holder of a Convertible Debenture (the "Offeror")
desires to sell, assign, transfer, encumber, or otherwise dispose of
any of his Convertible Debentures, he shall give written notice to the
Company of his desire to do so and of the price per debenture and other
terms under which he proposes to dispose of his Convertible Debentures
(the "Sales Notice"), which Sale Notice shall constitute an offer on
the part of the Offeror to sell to the Company any such Convertible
Debentures upon the terms and conditions set forth in such notice.
(ii) Unless, within ten (10) days after the giving of the
Sales Notice by the Offeror pursuant to subparagraph (i) of this
Section 2.4(c), the Company shall give written notice to the Offeror
that the Company irrevocably commits to purchase the Convertible
Debentures subject of the Sale Notice at the price and under the terms
specified in the Sales Notice given by the Offeror, the Company shall
be deemed to have rejected the offer of the Offeror to sell the
Convertible Debentures subject of the Sale Notice and the Offeror shall
be free without restriction under this Section 2.4(c) to sell the
Convertible Debentures subject of the Sales Notice to any other Person,
provided however, if the price per debenture is less than 90% of the
price and the other terms are more favorable than those contained in
the Sales Notice, the Offeror shall again offer to sell the Convertible
Debentures in accordance with the provisions of subparagraph (i) of
this Section 2.4(c) before it may complete any such sale and provided
further, that the Convertible Debentures subject of the Sales Notice
shall again be subject to the provisions of subparagraph (i) of this
Section 2.4(c) if within ninety (90) days after the giving of the Sale
Notice, the Offeror shall not have completed the disposition of such
Convertible Debentures.
(iii) If the Company irrevocably commits to purchase the
Convertible Debentures as contemplated by subparagraph (ii) of this
Section 2.4(c), the closing of such purchase shall take place at the
principal place of business of the Company at 10:00 A.M. (New York City
time) on the third (3rd) day following the expiration of the ten (10)
day period referred to subparagraph (ii) of this Section 2.4(c), or if
such day is not a Business Day, then the next day that is a Business
Day.
(iv) The provisions of this Section 2.4(c) shall not apply to
one or more transfers of the Convertible Debentures (i) by the GM
Trusts to one or more trusts for the benefit of the employees of
General Motors Corporation or its Affiliates, (ii) by VRLP to any
Affiliate of Vornado Realty Trust or VRLP, or (iii) EOPLP to any
Affiliate of Equity Office Properties Trust or EOPLP.
Section 2.5 Interest.
(a) Each Convertible Debenture will bear interest at the rate of 8.25%
per annum from and including July 28,1998 (the "Issuance Date") to and including
September 30, 2004, such rate of interest per annum automatically increasing by
an additional .75% per annum (any such increase shall be cumulative with any
such prior increase(s)) on October 1, 2004 and again on each subsequent October
1, (the rate of interest in effect at any time is hereinafter referred to as the
"Coupon Rate"), until the principal thereof becomes due and payable, and on any
overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
Coupon Rate, compounded quarterly, payable (subject to the provisions of Article
XI) quarterly in arrears on March 31, June 30, September 30 and December 31 of
each year (each, an "Interest Payment Date"), commencing on September 30, 1998,
to the Person in whose name such Convertible
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Debenture or any Predecessor Convertible Debenture is registered, at the close
of business on the record date for such interest installment, which shall be the
close of business on the fifteenth day prior to that Interest Payment Date. For
purposes of demonstration, Schedule 2.5(a) hereto lists the Coupon Rate that
will be in effect during each year following the Issuance Date until the
Maturity Date.
If the Company pays any Common Dividend during any quarter ending on an
Interest Payment Date, the Coupon Rate in effect for such quarter shall
automatically increase by the Common Rate. For purposes of this Section 2.5(a),
the following terms have the following meanings:
(i) "Common Dividend" means any cash dividend or distribution
payable on the Common Shares of the Company.
(ii) "Common Rate" means, for any quarter, the fraction,
expressed as a percentage rate per annum, the numerator of which is the
aggregate dollar amount of Common Dividend paid on one Common Share
during such quarter and the denominator of which is $9.00 (subject to
adjustment in proportion to each adjustment to the Conversion Price
triggered by events occurring prior to such quarter).
(b) The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. The amount of interest
payable for any period shorter than a full quarterly period for which interest
is computed, will be computed on the basis of the actual number of days elapsed
per 30-day month. In the event that any date on which interest is payable on the
Convertible Debentures is not a Business Day, then payment of interest payable
on such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date.
(c) If at any time the Trust is required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in any
such case, the Company will pay as additional sums ("Additional Sums") such
additional amounts as shall be required so that the net amounts received and
retained by the Trust after paying any such taxes, duties, assessments or other
governmental charges will not be less than the amounts the Trust would have
received had no such taxes, duties, assessments or other government charges been
imposed so long as the Trust is the holder of the Convertible Debentures.
Section 2.6 Authentication and Delivery of Convertible Debentures. At
any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Convertible Debentures in the aggregate
principal amount of up to $154,650,000 executed by the Company to the Trustee
for authentication, and the Trustee shall thereupon authenticate and make
available for delivery such Convertible Debentures to or upon the written order
of the Company, signed by both (i) the chairman of its Board of Trustees, or any
vice chairman of its Board of Trustees, or its president or any vice president
and (ii) its chief financial officer, treasurer or any assistant treasurer or
its secretary or any assistant secretary, without any further action by the
Company. In authenticating such Convertible Debentures and accepting the
additional responsibilities under this Indenture in relation to such Convertible
Debentures, the Trustee shall be entitled to receive and (subject to Section
6.1) shall be fully protected in relying upon:
(a) a copy of any resolution or resolutions of the Board of Trustees
relating to the issuance of such Convertible Debentures, in each case certified
by the secretary or an assistant secretary of the Company;
(b) a supplemental indenture, if any;
(c) an Opinion of Counsel, prepared in accordance with Section 15.5,
which shall state that the Convertible Debentures have been duly authorized,
and, when authenticated and delivered by the Trustee and issued by the Company
in the manner and subject to any conditions specified in such Opinion of
Counsel, will constitute valid and binding obligations of the Company
enforceable in accordance with their terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or other laws relating to or
affecting the
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enforcement of creditors' rights generally and by general equitable principles,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
Notwithstanding the provisions of the preceding paragraph, if the
Convertible Debentures are not to be originally issued at one time, it shall not
be necessary to deliver the resolution of the Board of Trustees and Opinion of
Counsel otherwise required pursuant to such preceding paragraph at or prior to
the time of authentication of each Convertible Debenture if such documents are
delivered at or prior to the time of authentication upon original issuance of
the first Convertible Debentures to be issued. After the original issuance of
the first Convertible Debenture to be issued, any separate request by the
Company that the Trustee authenticate Convertible Debentures for original
issuance will be deemed to be a certification by the Company that it is in
compliance with all conditions precedent provided for in this Indenture relating
to the authentication and delivery of such Convertible Debentures.
The Trustee shall have the right to decline to authenticate and deliver
any Convertible Debentures under this Section if the Trustee is advised by
counsel in good faith that the issuance of such Convertible Debentures would
expose the Trustee to personal liability or is unlawful.
Section 2.7 Execution of Convertible Debentures. The Convertible
Debentures shall be signed on behalf of the Company by the chairman of its Board
of Trustees, or any vice chairman of its Board of Trustees, or its president or
any vice president and attested by its chief financial officer, treasurer or any
assistant treasurer or its secretary or any assistant secretary, under its
corporate seal. Such signatures may be the manual or facsimile signatures of
such officers. The seal of the Company may be in the form of a facsimile thereof
and may be impressed, affixed, imprinted or otherwise reproduced on the
Convertible Debentures. Typographical and other minor errors or defects in any
such reproduction of the seal or any such signature shall not affect the
validity or enforceability of any Convertible Debenture that has been duly
authenticated and delivered by the Trustee.
In case any officer of the Company who shall have signed any of the
Convertible Debentures shall cease to be such officer before the Convertible
Debenture so signed shall be authenticated and delivered by the Trustee or
disposed of by the Company, such Convertible Debenture nevertheless may be
authenticated and delivered or disposed of as though the person who signed such
Convertible Debenture had not ceased to be such officer of the Company; and any
Convertible Debenture may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Convertible Debenture, shall be the
proper officers of the Company, although at the date of the execution and
delivery of this Indenture any such person was not such an officer.
Section 2.8 Certificate of Authentication. Only such Convertible
Debentures as shall bear thereon a certificate of authentication substantially
in the form attached hereto as a part of Exhibit A and executed by the Trustee
by the manual signature of one of its authorized signatories shall be entitled
to the benefits of this Indenture or be valid or obligatory for any purpose. The
execution of such certificate by the Trustee upon any Convertible Debenture
executed by the Company shall be conclusive evidence that the Convertible
Debenture so authenticated has been duly authenticated and delivered hereunder
and that the Holder is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Convertible Debenture shall have
been duly authenticated and delivered hereunder but never issued and sold by the
Company, the Company shall deliver such Convertible Debenture to the Trustee for
cancellation as provided in Section 2.12 together with a written statement
(which need not comply with Section 15.5 and need not be accompanied by an
Opinion of Counsel) stating that such Convertible Debenture has never been
issued and sold by the Company, for all purposes of this Indenture such
Convertible Debenture shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.
Section 2.9 Denomination and Date of Convertible Debentures; Payments
of Interest. Convertible Debentures shall be issuable in denominations of $1,000
and any integral multiple thereof. The Convertible Debentures shall be numbered,
lettered, or otherwise distinguished in such manner or in accordance with such
plans as the officers of the Company executing the same may determine with the
approval of the Trustee as evidenced by the execution and authentication
thereof.
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Each Convertible Debenture shall be dated the date of its
authentication.
The term "record date" as used with respect to any interest payment
date (except for payment of defaulted interest) shall mean the close of business
on the fifteenth day preceding such interest payment date, whether or not such
record date is a Business Day.
Any interest on any Convertible Debenture which is payable, but is not
punctually paid or duly provided for, on any interest payment date, subject to
the provisions of Article XI (called "defaulted interest" for purposes of this
Section) shall forthwith cease to be payable to the Holder on the relevant
record date by virtue of his having been such Holder; and such defaulted
interest may be paid by the Company, at its election in each case, as provided
in clause (1) or clause (2) below:
(1) The Company may elect to make payment of any defaulted
interest to the persons in whose names any such Convertible Debentures
(or their respective predecessor Convertible Debentures) 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 Convertible Debentures
and the date 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 clause provided. Thereupon the
Trustee shall fix a special record date for the payment of such
defaulted interest in respect of Convertible Debentures which shall not
be more than 15 nor less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Company of such special record date and, in the name and at the
expense of the Company shall cause notice of the proposed payment of
such defaulted interest and the special record date thereof 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
mailed as aforesaid, such defaulted interest in respect of Convertible
Debentures shall be paid to the person in whose names such Convertible
Debentures (or their respective predecessor Convertible Debentures) are
registered on such special record date and such defaulted interest
shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any defaulted interest on
the Convertible Debentures in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the
Convertible Debentures may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Convertible
Debenture delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Convertible Debenture shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Convertible
Debenture.
In the case of any Convertible Debenture which is converted into Common
Shares of the Company after any record date and on or prior to the next
succeeding Interest Payment Date (other than any Convertible Debenture whose
Maturity is prior to such Interest Payment Date), interest whose Stated Maturity
is on such Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion, and such interest (whether or not punctually
paid or duly provided for) shall be paid to the Person in whose name that
Convertible Debenture (or one or more Predecessor Convertible Debentures) is
registered at the close of business on such record date. However, if a
redemption date falls between a record date and the subsequent Interest Payment
Date, the amount of such payment shall include accumulated and unpaid interest
accrued to, but excluding, such redemption date. Except as otherwise expressly
provided in the first two sentences of this paragraph, in the case of any
Convertible Debenture which is converted, interest whose Stated Maturity is
after the date of conversion of such Convertible Debenture shall not be payable.
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Section 2.10 Registration, Transfer and Exchange. The provisions of
this Section 2.10 shall be subject in their entirety to the provisions of
Section 2.4. The Company will cause to be kept at each office or agency to be
maintained for the purpose as provided in Section 3.2 a register or registers
(herein sometimes referred to as the "Security Register") in which, subject to
such reasonable regulations as it may prescribe, the Company will provide for
the registration and the registration of the transfer or exchange of the
Convertible Debentures. The Trustee is hereby appointed and accepts the
appointment as Registrar (the "Registrar") for purposes of registering, and
registering transfers of, the Convertible Debentures.
Upon surrender for registration of transfer of any Convertible
Debenture at any such office or agency to be maintained for the purpose as
provided in Section 3.2, the Company shall execute and the Trustee shall
authenticate and make available for delivery in the name of the transferee or
transferees a new Convertible Debenture or Convertible Debentures and of a like
tenor and containing the same terms (other than the principal amount thereof, if
more than one Convertible Debenture is executed, authenticated and delivered in
respect to any Convertible Debenture so presented, in which case the aggregate
principal amount of the executed, authenticated and delivered Convertible
Debentures shall equal the principal amount of the Convertible Debenture
presented in respect thereof) and conditions.
At the option of the Holder thereof, Convertible Debentures may be
exchanged for a Convertible Debenture or Convertible Debentures having
authorized denominations and an equal aggregate principal amount, upon surrender
of such Convertible Debentures to be exchanged at the agency of the Company that
shall be maintained for such purpose in accordance with Section 3.2 and upon
payment, if the Company shall so require, of the charge hereinafter provided.
Whenever any Convertible Debentures are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Convertible
Debentures which the Holder making the exchange is entitled to receive. All
Convertible Debentures surrendered upon any exchange or transfer provided for in
this Indenture shall be promptly canceled by the Trustee and the Trustee will
deliver a certificate of cancellation thereof to the Company.
All Convertible Debentures issued upon any transfer or exchange of
Convertible Debentures shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Convertible Debentures surrendered upon such transfer or exchange.
Every Convertible Debenture presented or surrendered for registration
of transfer or exchange 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 Trustee duly executed by the Holder thereof
or his attorney duly authorized in writing.
No service charge shall be made to the Holder for any registration of
transfer or exchange of Convertible Debentures, but the company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Convertible
Debentures, other than exchanges pursuant to Sections 2.13, 8.5 or 12.5 not
involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange any Convertible Debenture during a 15-day period prior to the day
of mailing of the relevant notice of redemption or (ii) to register the transfer
of or exchange any Convertible Debenture so selected for redemption in whole or
in part, except, in the case of any Convertible Debenture to be redeemed in
part, the portion thereof not redeemed.
Section 2.11 Mutilated, Defaced, Destroyed, Lost and Stolen Convertible
Debentures. In case any temporary or definitive Convertible Debenture shall
become mutilated or defaced or be destroyed, lost or stolen, then, in the
absence of notice to the Company or the Trustee that the Convertible Debenture
has been acquired by a bona fide purchaser, the Company shall execute, and upon
the written request of any officer of the Company, the Trustee shall
authenticate and make available for delivery a new Convertible Debenture and of
like tenor and principal amount and with the same terms and conditions, bearing
a number not contemporaneously outstanding, in exchange and substitution for the
mutilated or defaced Convertible Debenture or in lieu of and substitution for
the Convertible Debenture so destroyed, lost or stolen. In every case the
applicant for a substitute Convertible Debenture shall furnish to the Company
and to the Trustee and to any agent of the Company or the Trustee such security
or indemnity as may be required by them to indemnify and defend and to save each
of them harmless and,
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in every case of destruction, loss or theft, evidence to their satisfaction of
the destruction, loss or theft of such Convertible Debenture and of the
ownership thereof and in the case of mutilation or defacement shall surrender
the Convertible Debenture to the Trustee or such agent.
Upon the issuance of any substitute Convertible Debenture, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee or its agent) connected
therewith. In case any Convertible Debenture which has matured or is about to
mature or has been called for redemption in full shall become mutilated or
defaced or be destroyed, lost or stolen, the Company may, instead of issuing a
substitute Convertible Debenture, pay or authorize, the payment of the same
(without surrender thereof except in the case of a mutilated or defaced
Convertible Debenture); provided, however, that the applicant for such payment
shall furnish to the Company and to the Trustee and any agent of the Company or
the Trustee such security or indemnity as any of them may require to save each
of them harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company and the Trustee and any agent of the
Company or the Trustee evidence to their satisfaction of the destruction, loss
or theft of such Convertible Debenture and of the ownership thereof.
Every substitute Convertible Debenture issued pursuant to the
provisions of this Section by virtue of the fact that any Convertible Debenture
is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen
Convertible Debenture shall be at any time enforceable by anyone and shall be
entitled to all the benefits of (but shall be subject to all the limitations of
rights set forth in) this Indenture equally and proportionately with any and all
other Convertible Debentures duly authenticated and delivered hereunder. All
Convertible Debentures shall be held upon the express condition that, to the
extent permitted by law, the foregoing provisions are exclusive with respect to
the replacement or payment of mutilated, defaced, destroyed, lost or stolen
Convertible Debentures and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement or payment of negotiable instruments or other
securities without their surrender.
Section 2.12 Cancellation of Convertible Debentures. All Convertible
Debentures surrendered for payment, redemption, conversion, registration of
transfer or exchange, or for credit against any payment in respect of a sinking
or analogous fund, shall, if surrendered to the Company or any agent of the
Company or the Trustee, be delivered to the Trustee for cancellation or, if
surrendered to the Trustee, shall be canceled by it; and no Convertible
Debentures shall be issued in lieu thereof, except as expressly permitted by any
of the provisions of this Indenture. The Company may at any time deliver to the
Trustee for cancellation any Convertible Debentures previously authenticated
hereunder which the Company has not issued and sold and all Convertible
Debentures so delivered shall be promptly canceled by the Trustee. If the
Company shall acquire any of the Convertible Debentures, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness represented by
such Convertible Debentures unless and until the same are delivered to the
Trustee for cancellation. All canceled Convertible Debentures shall be disposed
of as directed by a Company Order or, in the absence of such Company Order, in
accordance with the Trustee's customary practices. The Trustee shall provide a
certificate of destruction to the Company with respect to all Convertible
Debentures disposed of by the Trustee.
Section 2.13 Temporary Convertible Debentures. Pending the preparation
of definitive Convertible Debentures, the Company may execute and the Trustee
shall authenticate and make available for delivery temporary Convertible
Debentures (printed, lithographed, typewritten or otherwise reproduced, in each
case in form reasonably acceptable to the Trustee). Temporary Convertible
Debentures shall be issuable in any authorized denomination, and substantially
in the form of the definitive Convertible Debentures but with such omissions,
insertions and variations as may be appropriate for temporary Convertible
Debentures, all as may be determined by the Company with the reasonable
concurrence of the Trustee. Temporary Convertible Debentures may contain such
reference to any provisions of this Indenture as may be appropriate. Every
temporary Convertible Debenture shall be executed by the Company and be
authenticated by the Trustee upon the same conditions and in substantially the
same manner, and with like effect, as the definitive Convertible Debentures.
Without unreasonable delay the Company shall execute and shall furnish
definitive Convertible Debentures and thereupon temporary Convertible Debentures
may be surrendered in exchange therefor without charge to the Holder at each
office or agency to be maintained by the Company for that purpose pursuant to
Section 3.2, and the Trustee shall authenticate and make available for delivery
in exchange for such temporary Convertible Debentures an equal aggregate
principal amount of definitive Convertible Debentures of authorized
denominations. Until so
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exchanged, the temporary Convertible Debentures shall be entitled to the same
benefits under this Indenture as definitive Convertible Debentures.
ARTICLE III
COVENANTS OF THE COMPANY
Section 3.1 Payment of Principal and Interest. The Company covenants
and agrees for the benefit of the Convertible Debentures that it will duly and
punctually pay or cause to be paid the principal of, and interest on, each of
the Convertible Debentures in accordance with the terms of such Convertible
Debentures and of this Indenture. The interest on Convertible Debentures
(together with any additional amounts payable pursuant to the terms of such
Convertible Debentures) shall be payable only to or upon the written order of
the Holders thereof and at the option of the Company may be paid by wire
transfer or by mailing checks for such interest payable to or upon the written
order of such Holders at their last addresses as they appear on the Security
Register.
Section 3.2 Offices for Payment, etc. So long as any of the Convertible
Debentures remain outstanding, the Company will maintain the following: an
office or agency in the Borough of Manhattan, City of New York (a) where the
Convertible Debentures may be presented for payment, (b) where the Convertible
Debentures may be presented for registration of transfer and for exchange as
provided in this Indenture, and (c) where notices and demands may be served upon
the Company in respect of the Convertible Debentures, or this Indenture.
The Company will give to the Trustee written notice of the location of
any such office or agency and of any change of location thereof. In case the
Company shall fail to so designate or maintain any such office or agency or
shall fail to give such notice of the location or of any change in the location
thereof, presentations and demands may be made and notices may be served at the
Corporate Trust Office. The Trustee is hereby appointed, and accepts its
appointment as, Paying Agent.
Section 3.3 Paying Agents. Whenever the Company shall appoint a Paying
Agent other than the Trustee with respect to the Convertible Debentures, it will
cause such Paying Agent 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:
(a) that it will hold all sums received by it as such Paying
Agent for the payment of the principal of or interest on the
Convertible Debentures (whether such sums have been paid to it by the
Company or by any other obligor on the Convertible Debentures) in trust
for the benefit of the Holders of the Convertible Debentures or of the
Trustee, and upon the occurrence of an Event of Default and upon the
written request of the Trustee, pay over all such sums received by it
to the Trustee; and
(b) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Convertible Debentures) to make
any payment of the principal of or interest on the Convertible
Debentures when the same shall be due and payable.
The Company will, on or prior to each due date of the principal of or
interest on the Convertible Debentures, deposit in a timely manner with the
Paying Agent a sum sufficient to pay such principal or interest so becoming due,
and (unless such Paying Agent is the Trustee) the Company will promptly notify
the Trustee of any failure to take such action.
If the Company shall act as its own Paying Agent with respect to the
Convertible Debentures, it will, on or before each due date of the principal of
or interest on the Convertible Debentures, set aside, segregate and hold in
trust for the benefit of the holders of the Convertible Debentures a sum
sufficient to pay such principal or interest so becoming due. The Company will
promptly notify the Trustee of any failure to take such action.
Section 3.4 Written Statement to Trustee. The Company will deliver to
the Trustee, within 120 days after the end of each fiscal year of the Company
ending after the date hereof, a brief certificate (which need
727411.13
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not comply with Section 15.5) from the principal executive, financial or
accounting officer of the Company as to his or her knowledge, after due inquiry,
of the Company's compliance with all conditions and covenants under this
Indenture (such compliance to be determined without regard to any period of
grace or requirement of notice provided under this Indenture), and if the
Company shall not be in compliance, specifying all such defaults or
non-compliance and the nature and status thereof.
Section 3.5 Limitation on Dividends; Transactions with Affiliates. If
any Convertible Debentures are outstanding and (i) there shall have occurred any
Event of Default or any event that, with the giving of notice or lapse of time
or both, would constitute an Event of Default, (ii) the Guarantor shall be in
default with respect to its payment or other obligations under the Preferred
Securities Guarantee or the Common Securities Guarantee, or (iii) the Company
shall have given notice of its election to defer payments of interest on
Convertible Debentures by extending the interest payment period as provided in
Article XI and such period, or any extension thereof, shall be continuing, then
the Company shall not (a) declare or pay any dividend on, make any distribution
with respect to, or redeem, purchase or make a liquidation payment with respect
to, any of its Capital Stock or (b) make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued by
the Company that rank pari passu with or junior in interest to the Convertible
Debentures or make any guarantee payments with respect to any guarantee by the
Company of the debt securities of any subsidiary of the Company if such
guarantee ranks pari passu with or junior in interest to the Convertible
Debentures (other than (i) as a result of a reclassification of the Capital
Stock of the Company or the exchange or conversion of one class or series of the
Capital Stock of the Company for another class or series of the Capital Stock of
the Company, (ii) the purchase of fractional interests in shares of the Capital
Stock of the Company pursuant to the conversion or exchange provisions of such
Capital Stock or the security being converted into or exchanged for such Capital
Stock, (iii) dividends or distributions in Common Shares of the Company, (iv)
any declaration of a dividend in connection with the implementation of a
shareholders' rights plan, or the issuance of Capital Stock under any such plan
in the future, or the redemption or repurchase of any such rights pursuant
thereto, (v) payments under the Trust Securities Guarantees, (vi) purchases of
Common Shares of the Company related to the issuance of Common Shares of the
Company or rights under any of the Company's benefit plans for its directors,
officers or employees and (vii) obligations under any dividend reinvestment and
stock purchase plans).
Section 3.6 Covenants as to CT Trust. For so long as the Trust
Securities remain outstanding, the Company will (a) maintain 100% direct or
indirect ownership of the Common Securities of CT Trust; provided, however, that
any permitted successor of the Company under this Indenture may succeed to the
Company's ownership of the Common Securities, (b) use its best efforts to cause
CT Trust (i) to remain a statutory business trust, except in connection with the
distribution of Convertible Debentures to the holders of Trust Securities in
liquidation of CT Trust, the redemption of all of the Trust Securities of CT
Trust, or certain mergers, consolidations or amalgamations, each as permitted by
the Declaration, and (ii) to continue to be classified as a grantor trust for
United States federal income tax purposes and (c) use its best efforts to cause
each holder of Trust Securities to be treated as owning an undivided beneficial
interest in the Convertible Debentures.
Section 3.7 Existence. Subject to Article IX, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence, rights (charter and statutory) and franchises; provided,
however, that the Company shall not be required to preserve any such right or
franchise if the Board of Trustees shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Company and that
the loss thereof is not disadvantageous in any material respect to the Holders.
ARTICLE IV
HOLDERS OF CONVERTIBLE DEBENTURES LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
Section 4.1 Company to Furnish Trustee Information as to Names and
Addresses of Holders of Convertible Debentures. The Company covenants and agrees
that it will furnish or cause to be furnished to the Trustee a list in such form
as the Trustee may reasonably require of the names and addresses of the Holders
of the Convertible Debentures:
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(a) semiannually and not more than 15 days after each record
date for the payment of interest on such Convertible Debentures, as
hereinabove specified, as of such record date, and
(b) at such other times as the Trustee may reasonably request
in writing, within 30 days after receipt by the Company of any such
request, such list to be as of a date not more than 15 days prior to
the time such information is furnished,
provided that if and so long as the Trustee shall be the Registrar, such list
shall not be required to be furnished.
Section 4.2 Preservation and Disclosure of Holders of Convertible
Debentures' Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders of
Convertible Debentures contained in the most recent list furnished to it as
provided in Section 4.1 or maintained by the Trustee in its capacity as
Registrar, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 4.1 upon receipt of a new list so furnished.
(b) In case three or more Holders of Convertible Debentures
(hereinafter referred to as "applicants") apply in writing to the Trustee and
furnish to the Trustee reasonable proof that each such applicant has owned a
Convertible Debenture for a period of at least six months preceding the date of
such application, and such application states that the applicants desire to
communicate with other Holders of Convertible Debentures (in which case the
applicants must all hold Convertible Debentures) or with Holders of all
Convertible Debentures with respect to their rights under this Indenture or
under such Convertible Debentures and such application is accompanied by a copy
of the form of proxy or other communication which such applicants propose to
transmit, then the Trustee shall, within five business days after the receipt of
such application, at is election, either
(i) afford to such applicants access to the information
preserved at the time by the Trustee in accordance with the provisions
of subsection (a) of this Section, or
(ii) inform such applicants as to the approximate number of
Holders of Convertible Debentures or of all Convertible Debentures, as
the case may be, whose names and addresses appear in the information
preserved at the time by the Trustee, in accordance with the provisions
of subsection (a) of this Section, as to the approximate cost of
mailing to such Holders of Convertible Debentures the form of proxy or
other communication, if any, specified in such application.
If the Trustee shall elect not to afford to such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of Convertible Debentures or all Holders of
Convertible Debentures, as the case may be, whose name and address appears in
the information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section, a copy of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the Holders of
Convertible Debentures or could be in violation of applicable law. Such written
statement shall specify the basis of such opinion. If the Commission, after
opportunity for a hearing upon the objections specified in the written statement
so filed, shall enter an order refusing to sustain any of such objections or if,
after the entry of such order sustaining one or more of such objections, the
Commission shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met, and shall enter an order so declaring,
the Trustee shall mail copies of such material to all such Holders of
Convertible Debentures with reasonable promptness after the entry of such order
and the renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Each and every Holder of Convertible Debentures, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any agent of the Company or the Trustee shall be
held accountable by reason of the disclosure of any such information as to the
names and addresses of the Holders of Convertible Debentures in accordance with
the provisions of subsection (b) of this
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Section, 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 such subsection (b).
Section 4.3 Reports by the Company. The Company covenants:
(a) to file with the Trustee, within 15 days after the Company
is required to file the same with the Commission, copies of the annual
reports and of the information, documents, and other reports (or copies
of such portions and any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company may
be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act, or if the Company is not required to
file information, documents, or reports pursuant to either of such
Sections, then to file with the Trustee and the Commission to the
extent permitted, 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) to file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents, and reports with
respect to compliance by the Company with the conditions and covenants
provided for in this Indenture as may be required from time to time by
such rules and regulations; and
(c) to transmit by mail to the Holders of Convertible
Debentures in the manner and to the extent required by Sections 6.6 and
15.4, within 30 days after the filing thereof with the Trustee, such
summaries of any information, documents, and reports required to be
filed by the Company pursuant to subsections (a) and (b) of this
Section as may be required to be transmitted to such Holders by rules
and regulations prescribed from time to time by the Commission.
ARTICLE V
REMEDIES OF THE TRUSTEE AND HOLDERS OF
CONVERTIBLE DEBENTURES ON EVENT OF DEFAULT
Section 5.1 Event of Default Defined; Acceleration of Maturity; Waiver
of Default. "Event of Default" with respect to the Convertible Debentures
wherever used herein, means any one or more of the following events which shall
have occurred and be 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) default in the payment of any interest (including any
Additional Sums and Compound Interest) upon or any additional amounts
payable in respect of any Convertible Debentures when it becomes due
and payable, and continuance of such default for a period of 30 days;
provided, however, that a valid extension of an interest payment period
by the Company in accordance with the terms of this Indenture shall not
constitute a default in the payment of interest for this purpose; or
(b) default in the payment of the principal of, or premium, if
any, on, any Convertible Debentures as and when the same shall become
due and payable whether at maturity, upon redemption, by declaration or
otherwise; or
(c) default in the performance, or breach of any covenant or
warranty of the Company contained in the Convertible Debentures or in
this Indenture (other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a period of
30 days after there has been given, by registered or certified mail, to
the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in aggregate principal amount of the
Outstanding Convertible Debentures a written notice
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specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(d) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of all or any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and
the continuance of any such decree or order for relief or any such
other decree or order unstayed and in effect for a period of 90
consecutive days; or
(e) the commencement by the Company of a voluntary case or
proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by
it to the entry of a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case
or proceeding against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable
federal or state law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company or of all or any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or the taking of corporate
action by the Company in furtherance of any such action; or
(f) failure by the Company to convert Convertible Debentures
into Common Shares of the Company upon an appropriate election by a
holder of Trust Securities or Convertible Debentures to convert such
Trust Securities or Convertible Debentures, as the case may be, into
such Common Shares (whether or not conversion or exchange is prohibited
by the subordination provisions set forth herein); or
(g) the CT Trust shall have voluntarily or involuntarily
dissolved, wound-up its business or otherwise terminated its existence
except in connection with (i) the distribution of Convertible
Debentures to holders of Trust Securities in liquidation of their
interest in the CT Trust upon the occurrence of a Special Event or upon
the occurrence of events as described in Section 3 of Annex I to the
Declaration, (ii) the redemption of all of the outstanding Trust
Securities of the CT Trust, (iii) the conversion of all outstanding
Convertible Preferred Securities into Common Shares of the Company or
(iv) certain mergers, consolidations or amalgamations, each as
permitted by the Declaration; or
(h) the Company shall have consummated a merger or
consolidation in which the successor will be taxed as a partnership for
federal income tax purposes, or the Company shall have transferred all
or substantially all of its assets to an entity other than a Subsidiary
which shall be taxed as a partnership for federal income tax purposes.
If an Event of Default occurs and is continuing, then and in each and
every such case, unless the principal of all Convertible Debentures shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Convertible Debentures then
Outstanding hereunder, by notice in writing to the Company (and to the Trustee
if given by such Holders), may declare the entire principal of, plus accrued and
unpaid interest on, all the Convertible Debentures (including Additional Sums,
if any, and, to the extent permitted by applicable law, Compound Interest, if
any) and any other amounts payable under this Indenture to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable. These provisions, however, are subject to the
condition that if at any time after the principal and other amounts due on the
Convertible Debentures shall have been so declared due and payable, and before
any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest, if any, upon all the Convertible Debentures and the principal of any
and all Convertible Debentures which shall
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have become due otherwise than by such acceleration (with interest upon such
principal and, to the extent that payment of such interest is enforceable under
applicable law, Compound Interest to the date of such payment) or deposit in
Dollars such amount as shall be sufficient to cover reasonable compensation to
the Trustee, its agents, attorneys and counsel and all other expenses and
liabilities incurred, and all advances with interest made, by the Trustee, its
agents, attorneys and counsel and if any and all defaults under this Indenture,
other than the nonpayment of the principal and interest of Convertible
Debentures which shall have become due by such acceleration, shall have been
cured or waived as provided herein, then and in every such case the Holders of a
majority in aggregate principal amount of the Convertible Debentures then
Outstanding, by written notice to the Company and to the Trustee for the
Convertible Debentures, may waive all defaults and rescind and annul such
declaration and its consequences; but no such waiver or rescission and annulment
shall extend to or shall affect any subsequent default or shall impair any right
consequent thereon.
Section 5.2 Collection of Indebtedness by Trustee; Trustee May Prove
Debt. The Company covenants that (a) in case default shall be made in the
payment of any installment of interest on any of the Convertible Debentures when
such interest shall have become due and payable, and such default shall have
continued for a period of 30 days, or (b) in case default shall be made in the
payment of all or any part of the principal of any of the Convertible Debentures
when the same shall have become due and payable, whether upon Maturity or upon
any redemption or by declaration or otherwise, then upon demand of the Trustee
for the Convertible Debentures, the Company will pay to the Trustee for the
benefit of the Holders of the Convertible Debentures the whole amount that then
shall have become due and payable on all Convertible Debentures for principal of
or interest, as the case may be (with interest to the date of such payment upon
the overdue principal and, to the extent that payment of such interest is
enforceable under applicable law, on overdue installments of interest at the
same rate as the rate of interest specified in the Convertible Debentures); and
in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including reasonable compensation to, and all
expenses and liabilities incurred and all advances with interest made by, the
Trustee and each predecessor Trustee except as a result of its negligence or bad
faith.
Until such demand is made by the Trustee, the Company may pay the
principal of and interest on the Convertible Debentures to the persons entitled
thereto, whether or not the principal of and interest on the Convertible
Debentures are overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee for the Convertible Debentures, in its own name and as
trustee of an express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of the sums so due
and unpaid, and may prosecute any such action or proceedings to judgment or
final decree, and may enforce any such judgment or final decree against the
Company or other obligor upon such Convertible Debentures and collect in the
manner provided by law out of the property of the Company or other obligor upon
such Convertible Debentures, wherever situated, the moneys adjudged or decreed
to be payable.
In case there shall be pending proceedings relative to the Company or
any other obligor upon the securities under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Company or its property or such other obligor, or in
case of any other comparable judicial proceedings relative to the Company or
other obligor under the Convertible Debentures, or to the property of the
Company or such other obligor, the Trustee, irrespective of whether the
principal of any Convertible Debentures 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 pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the
Convertible Debentures, 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 reasonable compensation to, and all
expenses and liabilities incurred and all advances with interest made
by, the Trustee and each predecessor Trustee, and their respective
agents, attorneys and counsel, except as a result of negligence or bad
faith) and of the Holders of Convertible Debentures allowed in any
judicial
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proceedings relative to the Company or other obligor upon all
Convertible Debentures, or to the property of the Company or such
obligor, and
(b) to collect and receive any moneys or other property
payable or deliver able on any such claims, and to distribute all
amounts received with respect to the claims of the Holders of
Convertible Debentures and of the Trustee on their behalf; and any
trustee, receiver, liquidator, custodian or other similar official is
hereby authorized by each of the Holders of Convertible Debentures to
make payments to the Trustee for the Convertible Debentures, and, in
the event that such Trustee shall consent to the making of payments
directly to the Holders of Convertible Debentures, to pay to such
Trustee such amounts as shall be sufficient to cover reasonable
compensation to, and all expenses and liabilities incurred and all
advances with interest made by, such Trustee, each predecessor Trustee
and their respective agents, attorneys and counsel and all other
amounts due to such Trustee or any predecessor Trustee pursuant to
Section 6.7, except as a result of Trustee's negligence or bad faith.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of
Convertible Debentures any plan of reorganization, arrangement, adjustment or
composition affecting the Convertible Debentures or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder of Convertible Debentures in any such proceeding.
All rights of action and of asserting claims under this Indenture, or
under any of the Convertible Debentures, may be enforced by the Trustee for the
Convertible Debentures without the possession of any of the Convertible
Debentures or the production thereof at any trial or other proceedings relative
thereto, any such action or proceedings instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements and compensation
of the Trustee, each predecessor Trustee and their respective agents and
attorneys, shall be for the ratable benefit of the Holders of the Convertible
Debentures in respect of which such action was taken.
In any proceedings brought by the Trustee for the Convertible
Debentures (and also any proceedings involving the interpretation of any
provision of this Indenture to which the Trustee shall be a party), the Trustee
shall be held to represent all the Holders of the Convertible Debentures in
respect to which such action was taken, and it shall not be necessary to make
any Holders of such Convertible Debentures parties to any such proceedings.
Section 5.3 Application of Proceeds. Any moneys collected by the
Trustee for the Convertible Debentures pursuant to this Article in respect of
the Convertible Debentures shall be applied in the following order at the date
or dates fixed by such Trustee and, in case of the distribution of such moneys
on account of principal or interest, upon presentation of the several
Convertible Debentures in respect of which moneys have been collected and
stamping (or otherwise noting) thereon the payment, or issuing Convertible
Debentures in reduced principal amounts in exchange for the presented
Convertible Debentures if only partially paid, or upon surrender thereof if
fully paid:
FIRST: To the payment of costs and expenses applicable in
respect of which moneys have been collected, including reasonable
compensation to, and all expenses and liabilities incurred and all
advances with interest made by, the Trustee and each predecessor
Trustee and their respective agents and attorneys and all other amounts
due to the Trustee or any predecessor Trustee pursuant to Section 6.7,
except as a result of Trustee's negligence or bad faith;
SECOND: To the payment of the amounts then due and unpaid for
interest on the Convertible Debentures for which principal is not yet
due and payable in respect of which moneys have been collected, such
payments to be made ratably to the persons entitled thereto, without
discrimination or preference, according to the amounts then due and
payable on such Convertible Debentures for interest;
THIRD: To the payment of the amounts then due and unpaid for
principal of and interest on the Convertible Debentures for which
principal is due and payable in respect of which moneys have been
collected, such payments to be made ratably to the persons entitled
thereto, without discrimination or preference, according to the amounts
then due and payable on such Convertible Debentures of principal and
interest, respectively; and
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FOURTH: To the payment of the remainder, if any, to the
Company or any other Person lawfully entitled thereto.
Section 5.4 Restoration of Rights on Abandonment of Proceedings. In
case the Trustee for the Convertible Debentures or any Holder shall have
proceeded to enforce any right under this Indenture and such proceedings shall
have been discontinued or abandoned for any reason, or shall have been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to the determination in any such proceeding, the Company, the
Trustee and the Holders shall be restored respectively to their former positions
and rights hereunder, and all rights, remedies and powers of the Company, the
Trustee and the Holders of Convertible Debentures shall continue as though no
such proceedings had been taken.
Section 5.5 Limitations on Suits by Holders of Convertible Debentures.
No Holder of any Convertible Debenture shall have any right by virtue or by
availing of any provision of this Indenture to institute any action or
proceeding at law or in equity or in bankruptcy or otherwise upon or under with
respect to this Indenture, or for the appointment of a trustee, receiver,
liquidator, custodian or other similar official or for any other remedy
hereunder, unless such Holder previously shall have given to the Trustee written
notice of any Event of Default and of the continuance thereof, as hereinbefore
provided, and unless also the Holders of not less than 25% in aggregate
principal amount of the Convertible Debentures then Outstanding shall have made
written request upon the Trustee to institute such action or proceedings in its
own name as trustee hereunder and shall have offered to the Trustee such
reasonable indemnity, as it may require, against the costs, expenses and
liabilities to be incurred therein or thereby and the Trustee for 60 days after
its receipt of such notice, request and offer of indemnity shall have failed to
institute any such action or proceeding and no direction inconsistent with such
written request shall have been given to the Trustee during such 60 day period
by Holders of a majority in principal amount of the Convertible Debentures then
Outstanding; it being understood and intended, and being expressly covenanted by
the taker and Holder of every Convertible Debenture with every other taker and
Holder of a Convertible Debenture and the Trustee, that no one or more Holders
of Convertible Debentures shall have any right in any manner whatever, by virtue
or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of any other such Holder of Convertible Debentures, or to
obtain or seek to obtain priority over or preference to any other such Holder or
to enforce any right under this Indenture, except in the manner herein provided
and for the equal, ratable and common benefit of all Holders of Convertible
Debentures.
Section 5.6 Unconditional Right of Holders of Convertible Debentures to
Institute Certain Suits. Notwithstanding any provision in this Indenture and any
provision of any Convertible Debenture, the right of any Holder of any
Convertible Debenture to receive payment of the principal of and (subject to
Section 2.9 and Article XI) interest on such Convertible Debenture at the
respective rates, in the respective amount on or after the respective due dates
expressed in such Convertible Debenture, and to institute suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
Section 5.7 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in Section 2.11 and Section 5.5, no right
or remedy herein conferred upon or reserved to the Trustee or to the Holders of
Convertible Debentures 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.
No delay or omission of the Trustee or of any Holder of Convertible
Debentures to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and, subject to Section 5.5, every power and remedy given
by this Indenture or by law to the Trustee or to the Holders of Convertible
Debentures may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or the Holders of Convertible Debentures.
Section 5.8 Control by Holders of Convertible Debentures. The Holders
of a majority in aggregate principal amount of the Convertible Debentures at the
time Outstanding 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
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power conferred on the Trustee with respect to the Convertible Debentures by
this Indenture; provided that such direction shall not be in conflict with any
rule of law or the provisions of this Indenture; and provided further that the
Trustee, being advised by counsel, shall have the right to decline to follow any
such direction if the Trustee shall determine that the action or proceedings so
directed would involve the Trustee in personal liability or if the Trustee in
good faith shall so determine that the actions or forbearance specified in or
pursuant to such direction would be unduly prejudicial to the interest of
Holders of the Convertible Debentures not joining in the giving of said
direction.
Section 5.9 Waiver of Past Defaults. The Holders of not less than a
majority in aggregate principal amount of the Convertible Debentures at the time
Outstanding may on behalf of the Holders of all the Convertible Debentures waive
any past default hereunder or its consequences, except a default:
(a) in the payment of the principal of (or premium, if any) or
any interest on any Convertible Debenture as and when the same shall
become due by the terms of Convertible Debentures otherwise than by
acceleration (unless such default has been cured and sums sufficient to
pay all matured installments of interest and principal and any premium
has been deposited with the Trustee (in accordance with Section 5.1)),
or
(b) in respect of a covenant or provision hereof which under
Article VIII cannot be modified or amended without the consent of the
Holder of each Outstanding Convertible Debenture affected;
provided, however, that if the Convertible Debentures are held by the CT Trust
or the Institutional Trustee of such Trust, such waiver or modification to such
waiver shall not be effective until the holders of a majority in aggregate
liquidation amount of Trust Securities of the CT Trust shall have consented to
such waiver or modification to such waiver; provided further, that if the
consent of the Holder of each Outstanding Convertible Debenture is required,
such waiver shall not be effective until each holder of the Trust Securities of
the CT Trust shall have consented to such waiver.
Upon any such waiver, such default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
Section 5.10 Right of Court to Require Filing of Undertaking to Pay
Costs. All parties to this Indenture agree, and each Holder of any Convertible
Debenture, by his acceptance thereof, shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Holder of Convertible
Debentures or group of Holders of Convertible Debentures holding in the
aggregate more than 10% in principal amount of the Outstanding Convertible
Debentures, or to any suit instituted by a Holder of Convertible Debentures for
the enforcement of the payment of the principal of or interest on any
Convertible Debenture on or after the due date expressed in such Convertible
Debenture or any date fixed for redemption.
Section 5.11 Suits for Enforcement. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
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Section 5.12 Unconditional Right of Holders to Receive Principal and
Interest and to Convert. Notwithstanding any other provision in this Indenture,
the Holder of any Convertible Debenture shall have the right, which is absolute
and unconditional, to receive payment of the principal of and interest
(including Compound Interest and Additional Sums, if any) on such Convertible
Debenture on the respective Stated Maturities expressed in such Convertible
Debenture (or, in the case of redemption, on the redemption date) and to convert
such Convertible Debenture in accordance with Article XII and to institute suit
for the enforcement of any such payment and right to convert, and such rights
shall not be impaired without the consent of such Holder. If the Institutional
Trustee is the sole Holder of the Securities, any holder of the Preferred
Securities shall have the right to institute suit on behalf of the Trust for the
enforcement of any such payment and right to convert. The Company may not amend
the Indenture to remove the foregoing right to institute a suit directly against
the Company without the prior written consent of the Holders of all of the
Preferred Securities. If the right to institute a suit directly against the
Company is removed following the effectiveness of a registration statement in
respect of the Convertible Debentures, the Trust may become subject to the
reporting obligations under the Exchange Act. The Company shall have a right of
set-off to the extent of any payments made by the Company to such Holder in any
such suit.
ARTICLE VI
CONCERNING THE TRUSTEE
Section 6.1 Duties of the Trustee.
(a) If an Event of Default has occurred and is continuing with respect
to the Convertible Debentures, the Trustee shall exercise the rights and powers
vested in it by this Indenture and 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 or her own affairs.
(b) Except during the continuance of an Event of Default with respect
to the Convertible Debentures:
(i) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming on their face to the
requirements of this Indenture. However, in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine the
certificates and opinions to determine whether or not they conform on
their face to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent failure to act or its own willful misconduct, except that:
(i) this paragraph (c) does not limit the effect of
paragraph (b) of this Section 6.1;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.8.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 6.1.
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(e) The Trustee may refuse to perform any duty or exercise any right or
power or extend or risk its own funds or otherwise incur any financial liability
unless it receives indemnity satisfactory to it against any loss, liability or
expense.
(f) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
Section 6.2 Rights of Trustee. Subject to Section 6.1 and the
provisions of the Trust Indenture Act:
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel.
(c) Subject to the provisions of Section 6.1(c), the Trustee shall not
be liable for any action it takes or omits to take in good faith which it
believes to be authorized or within its rights or powers.
(d) The Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon in accordance with such
advice or Opinion of Counsel.
(e) 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 reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.
(f) 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.
Section 6.3 Individual Rights of Trustee. The Trustee in its individual
or any other capacity may become the owner or pledgee of Convertible Debentures
and may otherwise deal with the Company or its affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar or co-
Registrar may do the same with like rights. However, the Trustee must comply
with Sections 6.10 and 6.11.
Section 6.4 Trustee's Disclaimer. The Trustee makes no representation
as to the validity or adequacy of this Indenture or the Convertible Debentures,
it shall not be accountable for the Company's use of the proceeds from the
Convertible Debentures and it shall not be responsible for any statement in the
registration statement for the Common Shares of the Company into which the
Convertible Debentures are convertible under the Securities Act or in the
Indenture or the Convertible Debentures (other than its certificate of
authentication).
Section 6.5 Notice of Defaults. If a default occurs and is continuing
with respect to any Convertible Debentures and if it is known to the Trustee
through oral or written notice to a Responsible Officer, the Trustee shall give
to each Holder of Convertible Debentures notice of the default within 90 days
after such default occurs. Except in the case of a default described in Section
5.1(a) or (b), the Trustee may withhold the notice if and so long as a committee
of its Responsible Officers in good faith determines that withholding the notice
is in the interest of Holders of Convertible Debentures.
Section 6.6 Reports by Trustee to Holders. Within 60 days after each
December 31 beginning with the December 31 following the date of this Indenture,
the Trustee shall mail to each Holder of Convertible Debentures and each other
person specified in TIA Section 313(c) a brief report dated as of such December
31 that
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complies with TIA Section 313(a) to the extent required thereby. The Trustee
also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Holders of
Convertible Debentures shall be filed with the Commission and each securities
exchange on which the Convertible Debentures are listed. The Company agrees
promptly to notify the Trustee whenever the Convertible Debentures become listed
on any securities exchange and of any delisting thereof.
Section 6.7 Compensation and Indemnity. The Company agrees:
(a) to pay to the Trustee from time to time in Dollars such
compensation as shall be agreed to in writing between the Company and
the Trustee for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(b) to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances with interest thereon
incurred or made by the Trustee in accordance with any provision of
this Indenture (including the reasonable compensation and the expenses,
advances with interest thereon and disbursements of its agents and
counsel), except to the extent any such expense, disbursement or
advance may be attributable to its negligence or bad faith; and
(c) to indemnify the Trustee in Dollars for, and to hold it
harmless against, any loss, liability or expense arising out of or in
connection with the acceptance or administration of this trust or the
performance of its duties hereunder, including the costs and expenses
of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder
(including the reasonable compensation and the expenses, advances with
interest thereon and disbursements of its agents and counsel), except
to the extent that any such loss, liability or expense may be
attributable to its negligence or bad faith.
As security for the performance of the obligations of the Company in
this Section 6.7, the Trustee shall have a lien prior to the Convertible
Debentures on all money or property held or collected by the Trustee, except
that held in trust to pay the principal of or interest, if any, on particular
Convertible Debentures.
"Trustee" for purposes of this Section 6.7 includes any predecessor
Trustee, provided that the negligence or bad faith of any Trustee shall not be
attributable to any other Trustee.
The Company's payment obligations pursuant to this Section 6.7 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a default specified in Sections 5.1(d) and 5.1(e), such
expenses are intended to constitute expenses of administration under bankruptcy
law.
Section 6.8 Replacement of Trustee. The Trustee may resign at any time
with respect to Convertible Debentures by so notifying the Company; provided,
however, no such resignation shall be effective until a successor Trustee has
accepted its appointment pursuant to this Section 6.8. The Holders of a majority
in aggregate principal amount of the Outstanding Convertible Debentures may
remove the Trustee at the time outstanding by so notifying the Trustee and the
Company. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 6.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
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If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, with respect to the Convertible Debentures,
the Company shall promptly appoint, by resolution of its Board of Trustees, a
successor Trustee with respect to the Convertible Debentures.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture with respect to the Convertible Debentures. The successor
Trustee shall mail a notice of its succession to Holders of Convertible
Debentures so affected. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 6.7.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in aggregate principal amount of the Convertible
Debentures at the time Outstanding may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 6.10, any Holder of
Convertible Debentures may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
Section 6.9 Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee.
Section 6.10 Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a)(1) and Section 310(a)(5).
The Trustee shall have combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition. The Trustee
shall comply with TIA Section 310(b).
Section 6.11 Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE VII
CONCERNING THE HOLDERS OF CONVERTIBLE DEBENTURES
Section 7.1 Evidence of Action Taken by Holders of Convertible
Debentures.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided in this Indenture to be given or taken by a
specified percentage in principal amount of the Holders of Convertible
Debentures may be embodied in and evidenced by one or more instruments or
substantially similar tenor signed by such specified percentage of Holders of
Convertible Debentures in person or by agent duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee.
Proof of execution of any instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Sections
6.1 and 6.2) conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Article.
(b) The ownership of such Convertible Debentures shall be provided by
the Security Register.
Section 7.2 Proof of Execution of Instruments. Subject to Sections 6.1
and 6.2, the execution of any instrument by a Holder of Convertible Debentures
or his agent or proxy may be proved in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee.
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Section 7.3 Holders to be Treated as Owners. The Company, the Trustee
and any agent of the Company or the Trustee may deem and treat the person in
whose name any Convertible Debenture shall be registered upon the Security
Register as the absolute owner of such Convertible Debenture (whether or not
such Convertible Debenture shall be overdue and notwithstanding any notification
of ownership or other writing thereon) for the purpose of receiving payment of
or on account of the principal of and (subject to Section 2.9) interest on such
Convertible Debenture and for all other purposes; and neither the Company nor
the Trustee nor any agent of the Company or the Trustee shall be affected by any
notice to the contrary.
Section 7.4 Convertible Debentures Owned by Company Deemed Not
Outstanding. In determining whether the Holders of the requisite aggregate
principal amount of Outstanding Convertible Debentures have concurred in any
direction, consent or waiver under this Indenture, Convertible Debentures which
are owned by the Company or any other obligor on the Convertible Debentures with
respect to which such determination is being made or by any person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any other obligor on the Convertible Debentures with
respect to which such determination is being made shall be disregarded and
deemed not to be Outstanding for the purpose of any such determination (it being
understood that VRLP and any Affiliate of Vornado Realty Trust or VRLP and EOPLP
and any Affiliate of Equity Office Properties Trust or EOPLP shall not be deemed
to be under common control with the Company), except that for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, consent or waiver only Convertible Debentures which the Trustee knows
are so owned shall be so disregarded. Convertible Debentures so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Convertible Debentures and that the pledgee is not the
Company or any other obligor upon the Convertible Debentures or any person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any other obligor on the Convertible
Debentures.
Section 7.5 Right of Revocation of Action Taken. At any time prior to
(but not after) the evidencing to the Trustee, as provided in Section 7.1, of
the taking of any action by the Holders of the percentage in aggregate principal
amount of the Convertible Debentures, as the case may be, specified in this
Indenture in connection with such action, any Holder of a Convertible Debenture
the serial number of which is shown by the evidence to be included among the
serial numbers of the Convertible Debentures the Holders of which have consented
to such action may, by filing written notice at the Corporate Trust Office and
upon proof of holding as provided in this Article, revoke such action so far as
concerns such Convertible Debenture. Except as aforesaid any such action taken
by the Holder of any Convertible Debentures shall be conclusive and binding upon
such Holder and upon all future Holders and owners of such Convertible Debenture
and of any Convertible Debentures issued in exchange or substitution therefor,
irrespective of whether or not any notation in regard thereto is made upon any
such Convertible Debenture. Any action taken by the Holders of the percentage in
aggregate principal amount of the Convertible Debentures, as the case may be,
specified in this Indenture in connection with such action shall be conclusively
binding upon the Company, the Trustee and the Holders of all the Convertible
Debentures affected by such action.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
Section 8.1 Supplemental Indentures Without Consent of Holders of
Convertible Debentures. The Company, when authorized by a resolution of its
Board of Trustees and the Trustee for the Convertible Debentures may from time
to time and at any time enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act as in
force at the date of the execution thereof), in form satisfactory to such
Trustee, for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Convertible Debentures any property or
assets;
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(b) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Company
pursuant to Article IX;
(c) to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions for the protection of
the Holders of Convertible Debentures;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture; or to make such other provisions in
regard to matters or questions arising under this Indenture or under
any supplemental indenture as the Board of Trustees may deem necessary
or desirable and which shall not materially and adversely affect the
interests of the Holders of the Convertible Debentures; or
(e) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Convertible
Debentures.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property thereunder,
but the Trustee shall not be obligated to enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
may be executed without the consent of the Holders of any of the Convertible
Debentures at the time Outstanding, notwithstanding any of the provisions of
Section 8.2.
Section 8.2 Supplemental Indentures With Consent of Holders of
Convertible Debentures. With the consent (evidenced as provided in Article VII)
of the Holders of not less than a majority in aggregate principal amount of the
Convertible Debentures at the time Outstanding (voting as one class), the
Company, when authorized by a resolution of its Board of Trustees, and the
Trustee may, from time to time and at any time, enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of execution thereof) for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Convertible Debentures;
provided, however, that no such supplemental indenture shall (a) except to the
extent permitted by Article XI, extend the Stated Maturity of any Convertible
Debenture, or reduce the principal amount thereof or any premium thereon, or
reduce the rate or extend the time of payment of interest thereon, or reduce any
amount payable on redemption thereof, or make the principal thereof or interest
thereon payable in any coin or currency other than that provided in the
Convertible Debentures or in accordance with the terms thereof, or impair or
affect the right of any Holder of Convertible Debentures to institute suit for
payment thereof, or adversely affect the right to convert Convertible
Debentures, or modify the subordination provisions of this Indenture in any
manner adverse to the Holders of Convertible Debentures without the consent of
the Holders of each Convertible Debenture so affected, or (b) reduce the
aforesaid percentage of Convertible Debentures, the consent of the Holders of
which is required for any such supplemental indenture, without the consent of
the Holders of each Convertible Debenture so affected; provided further, that no
such supplemental indenture shall result in the realization of unrelated
business income for the Holders of the Convertible Debentures without the
consent of each Holder of Convertible Debentures.
Upon the request of the Company, accompanied by a copy of a resolution
of the Board of Trustees certified by the secretary or assistant secretary of
the Company authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Holders of
Convertible Debentures as aforesaid and other documents, if any, required by
Section 7.1, the Trustee shall join with the Company in the execution of such
supplemental indenture or otherwise, in which case such Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
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It shall not be necessary for the consent of the Holders of Convertible
Debentures under this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall approve
the substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Company
shall give notice thereof to the Holders of then Outstanding Convertible
Debentures, by mailing a notice thereof by first-class mail to such Holders at
their addresses as they shall appear on the Security Register, and in each case
such notice shall set forth in general terms the substance of such supplemental
indenture. Any failure of the Company to give such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
Section 8.3 Effect of Supplemental Indenture. Every supplemental
indenture executed pursuant to this Article VIII shall conform to the
requirements of the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions hereof, this Indenture shall be and be
deemed to be modified and amended in accordance therewith and the respective
rights, limitations of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the Holders of Convertible Debentures
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be a part of the
terms and conditions of this Indenture for any and all purposes.
Section 8.4 Documents to Be Given to Trustee. The Trustee, subject to
the provisions of Section 6.1 and 6.2, shall receive an Officers' Certificate
and an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article VIII complies with the applicable provisions
of this Indenture.
Section 8.5 Notation on Convertible Debentures in Respect of
Supplemental Indentures. Convertible Debentures authenticated and delivered
after the execution of any supplemental indenture pursuant to the provisions of
this Article VIII may bear, upon the direction of the Company, a notation in
form satisfactory to the Trustee for the Convertible Debentures as to any matter
provided for by such supplemental indenture. If the Company or the Trustee shall
so determine, new Convertible Debentures so modified as to conform, in the
opinion of the Trustee and the Company, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Company,
authenticated by the Trustee and delivered in exchange for the Convertible
Debentures then Outstanding.
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.1 Company May Consolidate, etc., on Certain Terms. The
Company may sell, transfer, lease or otherwise convey all or substantially all
of its assets on a consolidated basis to any Person, or consolidate or merge
with or into, any other Person, provided that in any such case, (a) either (i)
the Company shall be the continuing corporation, or (ii) if the Company is not
the continuing corporation, the successor corporation or Person which acquires
by sale, transfer, lease or other conveyance all or substantially all of the
assets of the Company, shall be a corporation organized and validly existing
under the laws of the United States of America or any state thereof or the
District of Columbia and shall expressly assume the due and punctual payment of
the principal of, premium, if any, and interest (including Additional Sums and
Compound Interest) on all of the Convertible Debentures according to their
tenor, and the due and punctual performance and observance of all of the
covenants, agreements and conditions of this Indenture to be performed or
observed by the Company by supplemental indenture satisfactory to the Trustee,
executed and delivered to the Trustee by such corporation or entity, by
amendment thereto, (b) immediately after such merger or consolidation, or such
sale, transfer, lease or other conveyance, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of Default,
shall have occurred and be continuing, and (c) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
the requirements of this Section have been complied with.
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Section 9.2 Successor Corporation Substituted. In case of any such
consolidation, merger, sale, transfer, or conveyance (but not in the case of any
such lease), and following such an assumption by the successor corporation, such
successor corporation shall succeed to and be substituted for the Company, with
the same effect as if it had been named herein, and the Company shall be
discharged from all obligations and covenants under this Indenture and the
Convertible Debentures and may be liquidated and dissolved. Such successor
corporation may cause to be signed, and may issue either in its own name or in
the name of the Company any or all of the Convertible Debentures issuable
hereunder which theretofore shall not have been signed by the Company and be
delivered to the Trustee; and, upon the order of such successor corporation
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall make
available for delivery any Convertible Debentures which previously shall have
been signed and delivered by the officers of the Company to the Trustee for
authentication, and any Convertible Debentures, which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All of the Convertible Debentures so issued shall in all respects have
the same legal rank and benefit under this Indenture as the Convertible
Debentures theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Convertible Debentures had been issued at the
date of the execution hereof.
In case of any such consolidation, merger, sale, transfer, lease or
conveyance such changes in phraseology and form (but not in substance) may be
made in the Convertible Debentures thereafter to be issued as may be
appropriate.
Section 9.3 Opinion of Counsel to Trustee. The Trustee, subject to the
provisions of Section 6.1 and 6.2, may receive an Opinion of Counsel, prepared
in accordance with Section 15.5, as conclusive evidence that any such
consolidation, merger, sale, lease or conveyance, and any such assumption, and
any such liquidation or dissolution, complies with the applicable provisions of
this Indenture.
ARTICLE X
REDEMPTION OF THE CONVERTIBLE DEBENTURES
Section 10.1 Tax Event Redemption.
(a) If a Tax Event (as defined in the Declaration) has
occurred and is continuing and:
(i) the Company has received a Redemption Tax Opinion (as
defined in the Declaration); or
(ii) after receiving a Dissolution Tax Opinion (as defined in
the Declaration), the Regular Trustees shall have been informed by tax
counsel rendering the Dissolution Tax Opinion that a No-Recognition
Opinion (as defined in the Declaration) cannot be delivered to the
Trust,
then, notwithstanding Section 10.2(a) but subject to Section 10.2(b), the
Company shall have the right upon not less than 30 days nor more than 60 days
notice to the Holders of the Convertible Debentures to redeem the Convertible
Debentures, in whole or in part, for cash within 90 days following the
occurrence of such Tax Event (the "90-Day Period") at a redemption price equal
to 100% of the principal amount to be redeemed plus any accrued and unpaid
interest thereon to the date of such redemption (the "Redemption Price"),
provided that if at the time there is available to the Company or the Trust the
opportunity to eliminate, within the 90-Day Period, the Tax Event by taking some
ministerial action ("Ministerial Action"), such as filing a form or making an
election, or pursuing some other similar reasonable measure which has no adverse
effect on the Company, the Trust or the Holders of the Trust Securities issued
by the Trust, the Company shall pursue such Ministerial Action in lieu of
redemption. If a redemption pursuant to the provisions of this Section 10.1
occurs on or before September 30, 2003, the Company shall provide notice of the
redemption 90 days prior to redemption (the "Early Tax Redemption Date") and pay
to the Holders of the Convertible Debentures on such date the Adjusted
Redemption Price as determined pursuant to the provisions of paragraph (b) of
this Section 10.1, provided that if the Adjusted Redemption Price is determined
to be less than the Redemption Price, the Company shall instead pay the
Redemption Price to the Holders of Convertible Debentures. The Redemption Price
or the Adjusted Redemption Price, as the case may be, shall be paid prior to
12:00 noon, New York time, on the date of such redemption or
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such earlier time as the Company determines, provided that the Company shall
deposit with the Trustee an amount sufficient to pay the Redemption Price or the
Adjusted Redemption Price prior to the redemption date.
(b) For purposes of this Section 10.1, the Adjusted Redemption Price
shall be calculated pursuant to the provisions of this Section 10.1(b). Within
10 days after the date of notice of redemption has been provided, the Company
and the Majority Holders shall each appoint a nationally recognized "bulge
bracket" independent investment banking firm experienced in the valuation of
businesses and their securities (each an "Experienced Appraiser") (the two
Experienced Appraisers appointed by the Company and the Majority Holders are
hereinafter referred to collectively as the "Initial MWA Experienced
Appraisers") to objectively determine the fair market value of the Convertible
Debentures as of the Early Tax Redemption Date (the "Convertible Debenture Fair
Market Value"). The Initial MWA Experienced Appraisers shall be instructed (the
"MWA Instructions") to independently determine the Convertible Debenture Fair
Market Value as of the Early Tax Redemption Date assuming for this purpose that
the Convertible Debentures were to remain outstanding until September 30, 2003
(taking into account for this purpose the interest rate and the option embedded
in the Convertible Debentures). If the Initial MWA Experienced Appraisers shall
not agree on the Convertible Debenture Fair Market Value, then within 10 days
after the Appraisal Period, they shall jointly appoint a third Experienced
Appraiser to objectively determine the Convertible Debenture Fair Market Value
and, in connection therewith, provide to such firm information as to their
calculations of the Convertible Debenture Fair Market Value. The third
Experienced Appraiser shall be instructed to objectively determine the
Convertible Debenture Fair Market Value in accordance with the MWA Instructions
and to select the Convertible Debenture Fair Market Value determined by one of
the Initial MWA Experienced Appraisers that most closely approximates the
Convertible Debenture Fair Market Value determined by such third Experienced
Appraiser. Such appraisal and selection by such third Experienced Appraiser
shall be completed within 20 days after the date of appointment of such firm and
shall be final and binding on the Company and each Holder. The Convertible
Debenture Fair Market Value that most closely approximates the Convertible
Debenture Fair Market Value determined by such third Experienced Appraiser shall
constitute the "Adjusted Redemption Price." If the Adjusted Redemption Price is
determined to be less than the Redemption Price, the Company shall instead pay
the Redemption Price to the Holders of the Convertible Debentures. All costs and
expenses incurred in connection with the appraisals, including fees to
investment banking firms, necessary to determine the Convertible Debenture Fair
Market Value and the Adjusted Redemption Price shall be borne by the Company.
The Company covenants and agrees that it shall enter into engagement agreements
with the foregoing Experienced Appraisers containing customary terms and
conditions, including customary indemnification provisions.
Section 10.2 Optional Redemption by Company.
(a) Subject to the provisions of Section 10.2(b) and to the provisions
of this Article X generally, except as otherwise may be specified in Section
10.1 or elsewhere in this Indenture, the Company shall have the right to redeem
the Convertible Debentures, in whole or in part, from time to time, on or after
September 30, 2003. Any redemption pursuant to this paragraph will be made upon
not less than 30 days nor more than 60 days notice to the Holders of the
Convertible Debentures, at a price equal to 100% of the principal amount of the
Convertible Debentures (the "Optional Redemption Price") together with accrued
and unpaid interest (including Additional Sums, if any, and, to the extent
permitted by applicable law, Compounded Interest, if any) to, but excluding, the
redemption date.
If Convertible Debentures are redeemed on any March 31, June 30,
September 30, or December 31, accrued and unpaid interest shall be payable to
holders of record on the relevant record date.
The Company may not redeem fewer than all of the outstanding
Convertible Debentures unless all accrued and unpaid interest has been paid on
all Convertible Debentures for all quarterly interest payment periods
terminating on or prior to the date of redemption.
So long as the corresponding Trust Securities are outstanding, the
proceeds from the redemption of the Convertible Debentures will be used to
redeem the Trust Securities.
If the Convertible Debentures are only partially redeemed pursuant to
this Section 10.2, the Convertible Debentures will be redeemed pro rata. The
Optional Redemption Price, together with any required interest
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payment, shall be paid in immediately available funds prior to 12:00 noon, New
York time, on the redemption date or at such earlier time as the Company
determines provided that the Company shall deposit with the Trustee an amount
sufficient to pay the Optional Redemption Price, together with any required
interest payment, by 10:00 a.m., New York time, on the date such amounts are to
be paid. Partial redemptions must be in an amount not less than $1,000 principal
amount of Convertible Debentures.
If Convertible Debentures selected for partial redemption are converted
in part before termination of the conversion right with respect to the portion
of the Convertible Debentures so selected, the converted portion of the
Convertible Debentures shall be deemed (so far as may be) to be the portion
selected for redemption. Convertible Debentures (or portions thereof) which have
been converted during a selection of Convertible Debentures to be redeemed shall
be treated by the Trustee as Outstanding for the purpose of such selection. In
any case where more than one Convertible Debenture is registered in the same
name, the Trustee in its discretion may treat the aggregate principal amount so
registered as if it were represented by one Convertible Debenture.
If any Convertible Debenture called for redemption is converted into
Common Shares of the Company, any money deposited with the Trustee or with any
Paying Agent or so segregated and held in trust for the redemption of such
Convertible Debenture shall (subject to any right of the Holder of such
Convertible Debenture or any Predecessor Convertible Debenture to receive
interest as provided in the last paragraph of Section 2.9) be paid to the
Company upon the Company's request or, if then held by the Company, shall be
discharged from such trust.
(b) If a partial redemption of the Convertible Debentures would result
in the delisting of the Convertible Preferred Securities issued by the Trust
from any national securities exchange or other organization on which the
Convertible Preferred Securities are then listed, the Company shall not be
permitted to effect such partial redemption and may only redeem the Convertible
Debentures in whole.
Section 10.3 No Sinking Fund. The Convertible Debentures are not
entitled to the benefit of any sinking fund or subject to any sinking fund.
Section 10.4 Election to Redeem; Notice of Redemption; Partial
Redemptions. The election of the Company to redeem any Convertible Debentures
shall be evidenced by, or pursuant to, a resolution of the Board of Trustees.
Notice of redemption to the Holders of Convertible Debentures required to be
redeemed or to be redeemed as a whole or in part at the option of the Company
shall be given by giving notice of such redemption as provided in Section 15.4,
at least 30 days and not more than 60 days prior to the date fixed for
redemption to such Holders of Convertible Debentures. Any notice which is mailed
in the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives the notice. Neither the failure to
give notice by mail, nor any defect in the notice so mailed to the Holder of any
Convertible Debenture designated for redemption as a whole or in part shall
affect the validity of the proceedings for such redemption.
The notice of redemption to each such Holder shall specify the date
fixed for redemption, the "CUSIP" number or numbers for such Convertible
Debentures, the redemption price, the Place or Places of Payment, that payment
will be made upon presentation and surrender of such Convertible Debentures,
that interest accrued to the date fixed for redemption will be paid as specified
in such notice and that on and after said date interest thereon or on the
portions thereof to be redeemed will cease to accrue, the conversion rate or
price, the date on which the right to convert the Convertible Debentures to be
redeemed will terminate and the place or places where such Convertible
Debentures may be surrendered for conversion. If less than all of the
Convertible Debentures are to be redeemed, the notice of redemption shall
specify the number of the Convertible Debentures to be redeemed. In case any
Convertible Debenture is to be redeemed in part, the notice of redemption shall
state the portion of the principal amount thereof to be redeemed and shall state
that on and after the date fixed for redemption, upon surrender of such
Convertible Debenture, a new Convertible Debenture or Convertible Debentures in
principal amount equal to the unredeemed portion thereof will be issued.
The notice of redemption of Convertible Debentures to be redeemed at
the option of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company. If such
notice is to be given by the Trustee, the Company shall provide notice of such
redemption to the Trustee at least 60 days prior to the date fixed for
redemption (unless a shorter notice shall be satisfactory to
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the Trustee). If such notice is given by the Company, the Company shall provide
a copy of such notice given to the Holders of such redemption to the Trustee at
least 2 days prior to the date such notice is given to such Holders, but in any
event at least 30 days and not more than 60 days prior to the date fixed for
redemption.
Not later than the redemption date specified in the notice of
redemption given as provided in this Section, the Company will have on deposit
with the Trustee or with one or more Paying Agents (or, if the Company is acting
as its own Paying Agent, set aside, segregate and hold in trust as provided in
Section 3.3) in funds available on such date an amount of money sufficient to
redeem on the redemption date all the Convertible Debentures so called for
redemption at the appropriate redemption price, together with accrued interest
to the date fixed for redemption. If less than all of the Outstanding
Convertible Debentures are to be redeemed at the election of the Company, the
Company will deliver to the Trustee at least 60 days prior to the date fixed for
redemption (unless a shorter notice shall be satisfactory to the Trustee) an
Officers' Certificate stating the aggregate principal amount of Convertible
Debentures to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Convertible Debentures
shall relate, in the case of any Convertible Debenture redeemed or to be
redeemed only in part, to the portion of the principal amount of such
Convertible Debenture which has been or is to be redeemed.
Section 10.5 Payment of Convertible Debentures Called for Redemption.
If notice of redemption has been given as above provided, the Convertible
Debentures or portions of Convertible Debentures specified in such notice shall
become due and payable on the date and at the place stated in such notice at the
applicable redemption price, together with interest accrued to the date fixed
for redemption, and on and after said date (unless the Company shall default in
the payment of such Convertible Debentures at the redemption price, together
with interest accrued to said date) interest on the Convertible Debentures or
portions of Convertible Debentures so called for redemption shall cease to
accrue, and, except as provided in Section 6.1, such Convertible Debentures
shall cease from and after the date fixed for redemption to be entitled to any
benefit or security under this Indenture, and the Holders thereof shall have no
right in respect of such Convertible Debentures except the right to receive the
redemption price thereof and unpaid interest to the date fixed for redemption.
On presentation and surrender of such Convertible Debentures at a Place of
Payment specified in said notice, said Convertible Debentures or the specified
portions thereof shall be paid and redeemed by the Company at the applicable
redemption price, together with interest accrued thereon to the date fixed for
redemption; provided that, payment of interest becoming due on or prior to the
date fixed for redemption shall be payable to the Holders of such Convertible
Debentures registered as such on the relevant record date subject to the terms
and provisions of Section 2.9 hereof.
If any Convertible Debenture called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the Coupon
Rate.
Upon presentation of any Convertible Debenture redeemed in part only,
the Company shall execute and the Trustee shall authenticate and make available
for delivery to or on the order of the Holder thereof, at the expense of the
Company, a new Convertible Debenture or Convertible Debentures, of authorized
denominations, in principal amount equal to the unredeemed portion of the
Convertible Debenture so presented.
Section 10.6 Exclusion of Certain Convertible Debentures from
Eligibility for Selection for Redemption. Convertible Debentures shall be
excluded from eligibility for selection for redemption if they are identified by
registration and certificate number in a written statement signed by an
authorized officer of the Company and delivered to the Trustee at least 30 days
prior to the last date on which notice of redemption may be given as being owned
of record and beneficially by, and not pledged or hypothecated by, either (a)
the Company or (b) an entity specifically identified in such written statement
as directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company (it being understood that VRLP and any
Affiliate of Vornado Realty Trust or VRLP and EOPLP and any Affiliate of Equity
Office Properties Trust or EOPLP shall not be deemed to be under common control
with the Company).
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ARTICLE XI
EXTENSION OF INTEREST PAYMENT PERIOD
Section 11.1 Extension of Interest Payment Period. As long as an Event
of Default under Section 5.1(a) of this Indenture shall not have occurred and be
continuing, subject to the condition that the Company file with the Trustee and
the transfer agent for the Convertible Preferred Securities and the Convertible
Debentures a Certificate signed by the chief financial officer or Treasurer of
the Company in the form attached hereto as Exhibit B ("Extension Certificate"),
the Company shall have the right, at any time and from time to time during the
term of the Convertible Debentures, to defer payments of interest by extending
the interest payment period of such Convertible Debentures for a period not
exceeding 20 consecutive quarters (the "Extension Period"), during which
Extension Period no interest shall be due and payable; provided that an
Extension Certificate shall be filed at the beginning of each quarter of such
Extension Period and that no Extension Period may extend beyond the Maturity
Date or any earlier redemption date. To the extent permitted by applicable law,
interest, the payment of which has been deferred because of the extension of the
interest payment period pursuant to this Section 11.1, will bear interest
thereon at the Coupon Rate compounded quarterly for each quarter of the
Extension Period ("Compound Interest"). Each Extension Period, if any, will end
on an Interest Payment Date. At the end of the Extension Period, the Company
shall pay all interest accrued and unpaid on the Convertible Debentures,
including any Additional Sums and, to the extent permitted by law, Compound
Interest (together, "Deferred Interest") that shall be payable to the Holders of
the Convertible Debentures in whose names the Convertible Debentures are
registered in the Security Register at the close of business on the record date
next preceding such Interest Payment Date. Before the termination of any
Extension Period, the Company may further extend such period, provided that such
period together with all previous and further extensions thereof shall not
exceed 20 consecutive quarters, or extend beyond the Maturity Date or any
earlier redemption date. Upon the termination of any Extension Period and upon
the payment of all Deferred Interest then due, the Company may commence a new
Extension Period, subject to the foregoing requirements. No interest shall be
due and payable during an Extension Period, except at the end thereof, but the
Company may prepay at any time all or any portion of the interest accrued during
an Extension Period.
Section 11.2 Notice of Extension.
(a) If the Institutional Trustee is the only registered Holder of the
Convertible Debentures at the time the Company selects an Extension Period, the
Company shall give written notice to the Regular Trustees, the Institutional
Trustee and the Trustee of its selection of such Extension Period at least one
Business Day before the next succeeding date on which Distributions on the Trust
Securities issued by the Trust are payable. The Company shall cause the Trust to
give notice of the Company's selection of such Extension Period to holders of
the Convertible Preferred Securities.
(b) If the Institutional Trustee is not the only Holder of the
Convertible Debentures at the time the Company selects an Extension Period, the
Company shall give the Holders of the Convertible Debentures, the Institutional
Trustee and the Trustee written notice of its selection of such Extension Period
at least 10 Business Days before next succeeding Interest Payment Date.
(c) The quarter in which any notice is given pursuant to paragraphs (a)
or (b) of this Section 11.2 shall be counted as one of the 20 consecutive
quarters permitted in the maximum Extension Period permitted under Section 11.1.
ARTICLE XII
CONVERSION OF CONVERTIBLE DEBENTURES
Section 12.1 Conversion Rights. Subject to and upon compliance with the
provisions of this Article XII, the Convertible Debentures are convertible, at
the option of the Holders, at any time through the close of business on the last
Business Day prior to the Maturity Date (or, in the case of Convertible
Debentures called for redemption, prior to the close of business on the Business
Day prior to the corresponding redemption date) into
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fully paid and nonassessable Common Shares of the Company at an initial
conversion rate of 85.47 Common Shares for each $1,000 in principal amount of
Convertible Debentures (equivalent to a conversion price of $11.70 per Common
Share (the "Conversion Price")), subject to adjustment and reset as described in
this Article XII. Subject to the following sentence, a Holder of Convertible
Debentures may convert any portion of the principal amount of the Convertible
Debentures into that number of fully paid and nonassessable Common Shares
obtained by dividing the principal amount of the Convertible Debentures to be
converted by such Conversion Price. At least $1,000,000 of the principal amount,
or the entire principal amount, if less than $1,000,000, of the Convertible
Debentures held by the converting Holder must be converted in connection with
any conversion into Common Shares pursuant to the foregoing. All calculations
under this Article XII shall be made to the nearest cent or to the nearest
1/100th of a share, as the case may be.
Section 12.2 Conversion Procedures.
(a) In order to convert all or a portion of the Convertible Debentures,
the Holder thereof shall deliver to the Conversion Agent an irrevocable notice
of conversion (the "Notice of Conversion") setting forth the principal amount of
Convertible Debentures to be converted, together with the name or names, if
other than the Holder, in which the Common Shares should be issued upon
conversion and, surrender to the Conversion Agent the Convertible Debentures to
be converted, duly endorsed or assigned to the Company or in blank. In addition,
a holder of Convertible Preferred Securities may exercise its right under the
Declaration to convert such Convertible Preferred Securities into Common Shares
by delivering to the Conversion Agent an irrevocable Notice of Conversion
setting forth the information called for by the preceding sentence and directing
the Conversion Agent (i) to exchange such Convertible Preferred Security for a
portion of the Convertible Debentures held by the Trust (at an exchange rate of
$1,000 principal amount of Convertible Debentures for each Convertible Preferred
Security) and (ii) to immediately convert such Convertible Debentures, on behalf
of such holder, into Common Shares of the Company pursuant to this Article XII
and surrendering such Convertible Preferred Securities, duly endorsed or
assigned to the Company or in blank. So long as any Convertible Preferred
Securities are outstanding, the Trust shall not convert any Convertible
Debentures except pursuant to a Notice of Conversion delivered to the Conversion
Agent by a holder of Convertible Preferred Securities.
If a Notice of Conversion is delivered on or after the record date and
prior to the subsequent Interest Payment Date, the Holder will be entitled to
receive the interest payable on the subsequent Interest Payment Date on the
portion of Convertible Debentures to be converted notwithstanding the conversion
thereof prior to such Interest Payment Date. However, if a redemption date falls
between a record date and the subsequent Interest Payment Date, the Holder will
be entitled to receive, on such Interest Payment Date, the interest accrued to,
but excluding, the redemption date. Except as otherwise provided in the first
and second sentences of this paragraph, in the case of any Convertible Debenture
which is converted, interest whose Stated Maturity is after the date of
conversion of such Convertible Debenture shall not be payable, and the Company
shall not make nor be required to make any other payment, adjustment or
allowance with respect to accrued but unpaid interest on the Convertible
Debentures being converted, which shall be deemed to be paid in full. Each
conversion shall be deemed to have been effected immediately prior to the close
of business on the day on which the Notice of Conversion was received (the
"Conversion Date") by the Conversion Agent from the Holder or from a holder of
the Convertible Preferred Securities effecting a conversion thereof pursuant to
its conversion rights under the Declaration, as the case may be. The Person or
Persons entitled to receive the Common Shares issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such Common
Shares as of the Conversion Date. As promptly as practicable on or after the
Conversion Date, the Company shall issue and deliver at the office of the
Conversion Agent, unless otherwise directed by the Holder in the Notice of
Conversion, a certificate or certificates for the number of full Common Shares
issuable upon such conversion, together with the cash payment, if any, in lieu
of any fraction of any share to the Person or Persons entitled to receive the
same. The Conversion Agent shall deliver such certificate or certificates to
such Person or Persons.
(b) The Company's delivery upon conversion of the fixed number of
Common Shares into which the Convertible Debentures are convertible (together
with the cash payment, if any, in lieu of fractional share and the interest
payable pursuant to Section 12.2(a)) shall be deemed to satisfy the Company's
obligation to pay the principal amount at Maturity of the portion of Convertible
Debentures so converted and any unpaid interest (including Compound Interest)
accrued on such Convertible Debentures at the time of such conversion.
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(c) No fractional Common Shares will be issued as a result of
conversion, but in lieu thereof, the Company shall pay to the Conversion Agent a
cash adjustment in an amount equal to the same fraction of the Closing Price of
such fractional interest on the date on which the Convertible Debentures were
duly surrendered to the Conversion Agent for conversion, or, if such day is not
a Trading Day, on the next Trading Day, and the Conversion Agent in turn will
make such payment, if any, to the Holder of the Convertible Debentures or the
holder of the Convertible Preferred Securities so converted.
(d) In the event of the conversion of any Convertible Debenture in part
only, the Company shall execute and the Trustee shall authenticate and make
available for delivery to or on the order of the Holder thereof, at the expense
of the Company, a new Convertible Debenture or Convertible Debentures in the
aggregate principal amount equal to the unconverted portion thereof.
(e) In effecting the conversion transactions described in this Section
12.2, the Conversion Agent is acting as agent of the holders of Convertible
Preferred Securities (in the exchange of Convertible Preferred Securities for
Convertible Debentures) and as agent of the Holders of Convertible Debentures
(in the conversion of Convertible Debentures into Common Shares), as the case
may be. The Conversion Agent is hereby authorized (i) to exchange Convertible
Debentures held by the Trust from time to time for Convertible Preferred
Securities in connection with the conversion of such Convertible Preferred
Securities in accordance with this Article XII and (ii) to convert all or a
portion of the Convertible Debentures into Common Shares and thereupon to
deliver such Common Shares in accordance with the provisions of this Article XII
and to deliver to the Trust a new Convertible Debenture or Convertible
Debentures for any resulting unconverted principal amount.
Section 12.3 Conversion Price Adjustments. The Conversion Price shall
be adjusted from time to time as follows:
(a) In case the Company shall, while any of the Convertible Debentures
are outstanding, (i) pay a dividend or make a distribution with respect to
Common Shares in Common Shares, (ii) subdivide outstanding Common Shares, (iii)
combine outstanding Common Shares into a smaller number of shares or (iv) issue
by reclassification of its Common Shares any shares of Capital Stock of the
Company (other than the reclassifications covered by Section 12.4), the
conversion privilege and the Conversion Price for the Convertible Debentures
shall be adjusted so that the Holder of any Convertible Debenture thereafter
surrendered for conversion shall be entitled to receive the number of shares of
Capital Stock of the Company which such Holder would have owned immediately
following such action had such Convertible Debenture been converted immediately
prior thereto. An adjustment made pursuant to this subsection (a) shall become
effective immediately after the record date in the case of a dividend or other
distribution and shall become effective immediately after the effective date in
case of a subdivision, combination or reclassification (or immediately after the
record date if a record date shall have been established for such event).
(b) In case the Company shall, while any of the Convertible Debentures
are outstanding, issue rights or warrants to all holders of its Common Shares
entitling them (for a period expiring within 45 days after the record date
mentioned below) to subscribe for or purchase Common Shares at a price per share
less than the current market price per Common Share (as determined pursuant to
subsection (g) below) on the record date mentioned below, the Conversion Price
for the Convertible Debentures shall be adjusted so that the same shall equal
the price determined by multiplying the Conversion Price in effect immediately
prior to the date of issuance of such rights or warrants by a fraction of which
the numerator shall be the number of Common Shares outstanding on the date of
issuance of such rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares so offered for
subscription or purchase would purchase at such current market price, and of
which the denominator shall be the number of Common Shares outstanding on the
date of issuance of such rights or warrants plus the number of additional Common
Shares offered for subscription or purchase. Such adjustment shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such rights or warrants. For the purposes of
this subsection, the number of Common Shares at any time outstanding shall not
include shares held in the treasury of the Company. In case any rights or
warrants referred to in this subsection in respect of which an adjustment shall
have been made shall expire unexercised within 45 days after the same shall have
been distributed or issued by the Company, the Conversion Price shall be
readjusted at the time of such expiration to the Conversion Price that would
have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.
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(c) Subject to the last sentence of this subsection (c), in case the
Company shall, by dividend or otherwise, distribute to all holders of its Common
Shares evidences of its indebtedness, shares of any class or series of Capital
Stock, cash or assets or rights or warrants to subscribe for or purchase any of
its securities (excluding any rights or warrants referred to in subsection (b),
any dividend or distribution paid exclusively in cash and any dividend or
distribution referred to in subsection (a) of this Section 12.3), the Conversion
Price shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the
effectiveness of the Conversion Price reduction contemplated by this subsection
(c) by a fraction of which the numerator shall be the current market price
(determined as provided in subsection (g)) per Common Share on the date fixed
for the payment of such distribution (the "Reference Date") less the fair market
value (as determined in good faith by the Board of Trustees, whose determination
shall be conclusive and evidenced by a resolution of the Board of Trustees), on
the Reference Date, of the portion of the evidences of indebtedness, shares of
Capital Stock, cash, assets, rights or warrants so distributed applicable to one
Common Share and the denominator shall be such current market price per Common
Share, such reduction to become effective immediately prior to the opening of
business on the day following the Reference Date. In the event that no such
dividend or distribution is so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
dividend or distribution had not occurred. If the Board of Trustees determines
the fair market value of any distribution for purposes of this subsection (c) by
reference to the actual or when issued trading market for any securities
comprising such distribution, it must in doing so consider the prices in such
market over the same period used in computing the current market price per
Common Share (determined as provided in subsection (g)). For purposes of this
subsection (c), any dividend or distribution that includes Common Shares, or
rights or warrants of the type described in subsection (b), shall be deemed
instead to be a dividend or distribution of the evidences of indebtedness,
shares of Capital Stock, cash or assets or rights or warrants other than such
Common Shares, or such rights or warrants of the type described in subsection
(b) (making any Conversion Price reduction required by this subsection (c)),
immediately followed by a dividend or distribution of such Common Shares or such
rights or warrants of the type described in subsection (b) (making any further
Conversion Price adjustment required by subsection (a) or (b)), except (A) the
Reference Date of such dividend or distribution as defined in this subsection
(c) shall be substituted as (1) "the record date in the case of a dividend or
other distribution," and (2) "the record date for the determination of
stockholders entitled to receive such rights or warrants" and (3) "the date
fixed for such determination" within the meaning of subsections (a) and (b) and
(B) any Common Share included in such dividend or distribution shall not be
deemed outstanding for purposes of computing any adjustment of the Conversion
Price in subsection (b).
(d) In case the Company shall pay or make a dividend or other
distribution on its Common Shares exclusively in cash, the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the
effectiveness of the Conversion Price reduction contemplated by this subsection
(d) by a fraction of which the numerator shall be the current market price per
share (determined as provided in subsection (g)) of the Common Shares on the
date fixed for the payment of such distribution less the amount of cash so
distributed applicable to one Common Share and the denominator shall be such
current market price per Common Share (determined as provided in subsection
(g)), such reduction to become effective immediately prior to the opening of
business on the day following the date fixed for the payment of such
distribution. In the event that no such dividend or distribution is so paid or
made, the Conversion Price shall again be adjusted to be the Conversion Price
which would then be in effect if such Record Date had not been fixed.
(e) In case a tender or exchange offer (other than an odd-lot offer)
made by the Company or any Subsidiary of the Company for all or any portion of
the Company's Common Shares shall expire and such tender or exchange offer shall
involve the payment by the Company or such subsidiary of consideration per
Common Share having a fair market value (as determined in good faith by the
Board of Trustees, whose determination shall be conclusive and evidenced by a
resolution of the Board of Trustees) on the last date (the "Expiration Date")
tenders or exchanges may be made pursuant to such tender or exchange offer (as
it shall have been amended) that exceeds the Closing Price of the Common Shares
on the Expiration Date, the Conversion Price shall be reduced so that the same
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to the effectiveness of the Conversion Price reduction
contemplated by this subsection (e) by a fraction (which shall not be greater
than one) of which the numerator shall be (i) the number of Common Shares
outstanding (including any tendered or exchanged shares) on the Expiration Date
times the Closing Price of the Common Shares on the Expiration Date minus (ii)
the fair market value (determined as aforesaid) of the aggregate consideration
paid
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pursuant to such tender or exchange offer and the denominator shall be (i) the
number of Common Shares outstanding (including any tendered or exchanged shares)
on the Expiration Date minus the number of Common Shares purchased pursuant to
such tender or exchange offer times (ii) the Closing Price of the Common Shares
on the Expiration Date, such reduction to become effective immediately prior to
the opening of business on the day following the Expiration Date.
(f) In case a tender or exchange offer made by a Person other than the
Company or any Subsidiary of the Company for all or any portion of the Common
Shares shall expire and such tender or exchange offer shall involve the payment
by a Person other than the Company or any Subsidiary of the Company of
consideration per Common Share having a fair market value (as determined in good
faith by the Board of Trustees, whose determination shall be conclusive and
evidenced by a resolution of the Board of Trustees) at the applicable Expiration
Date that exceeds the Closing Price of the Common Shares on the Expiration Date
in which as of the closing date of the offer the Board of Trustees of the
Company is not recommending rejection of the offer, the Conversion Price shall
be reduced so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the effectiveness of the
Conversion Price reduction contemplated by this subsection (f) by a fraction
(which shall not be greater than one) of which the numerator shall be (i) the
number of Common Shares outstanding (including any tendered or exchanged shares)
on the Expiration Date times the Closing Price of the Common Shares on the
Expiration Date minus (ii) the fair market value (determined as aforesaid) of
the aggregate consideration paid pursuant to such tender or exchange offer and
the denominator shall be (i) the number of Common Shares outstanding (including
any tendered or exchanged shares) on the Expiration Date minus the number of
Common Shares purchased pursuant to such tender or exchange offer times (ii) the
Closing Price of the Common Shares on the Expiration Date, such reduction to
become effective immediately prior to the opening of business on the day
following the Expiration Time; provided, however, that the reduction of the
Conversion Price contemplated by this subsection (f) will only be made if the
tender offer or exchange offer is made for an amount which increases that
Person's ownership of Common Shares to more than 25% of the total Common Shares
outstanding and provided, further, that the reduction of the Conversion Price
contemplated by this subsection (f) will not be made if as of the close of the
offer, the offering documents with respect to such offer include a commitment to
cause the Company to engage in a consolidation or merger of the Company or a
sale of all or substantially all of the assets of the Company.
(g) For the purpose of any computation under subsection (b), (c), (d),
(e) or (f), the current market price per Common Share on any date in question
shall be deemed to be the average of the daily Closing Prices for the five
Trading Day period ending on the earlier of the day in question and, if
applicable, the last Trading Day before the "ex" date with respect to the
issuance or distribution requiring such computation; provided, however, that if
more than one event occurs that would require an adjustment pursuant to
subsections (a) through (f), inclusive, the Board of Trustees shall in good
faith make such adjustments to the Closing Prices during such five Trading Day
period as it reasonably deems appropriate to effectuate the intent of the
adjustments in this Section 12.3, in which case any such determination by the
Board of Trustees shall be set forth in a Board Resolution and shall be
conclusive. For purposes of this paragraph, the term "ex" date, (1) when used
with respect to any issuance or distribution, means the first date on which the
Common Shares trade regular way on the New York Stock Exchange or on such
successor securities exchange as the Common Shares may be listed or in the
relevant market from which the Closing Prices were obtained without the right to
receive such issuance or distribution, and (2) when used with respect to any
tender or exchange offer means the first date on which the Common Shares trade
regular way on such securities exchange or in such market after the Expiration
Time of such offer.
(h) The Company may make such reductions in the Conversion Price, in
addition to those required by subsections (a) through (f), as the Board of
Trustees considers to be advisable to avoid or diminish any income tax to
holders of Common Shares or rights to purchase Common Shares resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes. The Company from time to time may
reduce the Conversion Price by any amount for any period of time if the period
is at least twenty (20) days. Whenever the Conversion Price is reduced pursuant
to the preceding sentence, the Company shall mail to Holders of record of the
Convertible Debentures a notice of the reduction at least 15 days prior to the
date the reduced Conversion Price takes effect, and such notice shall state the
reduced Conversion Price and the period it will be in effect.
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(i) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Conversion Price; provided, however, that any adjustments which by reason of
this subsection (i) are not required to be made shall be carried forward and
taken into account in determining whether any subsequent adjustment shall be
required.
(j) If any action would require adjustment of the Conversion Price
pursuant to more than one of the provisions described above, only one adjustment
shall be made and such adjustment shall be the amount of adjustment that has the
highest absolute value to the Holder of Convertible Debentures.
(k) Except as stated above, the Conversion Rate will not be adjusted
for the issuance of Common Shares or any securities convertible into, or
exchangeable for, Common Shares, or carrying the right to purchase any of the
foregoing.
Section 12.4 Merger, Consolidation or Sale of Assets.
(a) In the event that the Company shall be a party to any transaction
(including without limitation (i) any recapitalization or reclassification of
the Common Shares (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination of the Common Shares, (ii) any consolidation of the Company with, or
merger of the Company into, any other Person, any merger of another Person into
the Company (other than a merger which does not result in a reclassification,
conversion, exchange or cancellation of outstanding Common Shares of the
Company), (iii) any sale or transfer of all or substantially all of the assets
of the Company, or (iv) any compulsory share exchange) pursuant to which either
Common Shares shall be converted into the right to receive other securities,
cash or other property, then lawful provision shall be made as part of the terms
of such transaction whereby the Holder of each Convertible Debenture then
outstanding shall have the right thereafter to convert such Convertible
Debenture only into:
(i) in the case of any such transaction that does not
constitute a Common Share Fundamental Change, the kind and amount of
the securities, cash or other property that would have been receivable
upon such transaction by a holder of the number of Common Shares
issuable upon conversion of such Convertible Debenture immediately
prior to such transaction, after giving effect to any adjustment in the
Conversion Price in accordance with clause (i) of subsection (c) of
this Section 12.4; and
(ii) in the case of any such transaction that constitutes a
Common Share Fundamental Change, common stock of the kind received by
holders of Common Share as a result of such Common Share Fundamental
Change in an amount determined in accordance with clause (ii) of
subsection (c) of this Section 12.4.
(b) The Company or, if the Company is not the surviving Person in such
transaction, the surviving Person, shall amend this Indenture as appropriate to
establish such right. Such amendment shall provide for adjustments which, for
events subsequent to the effective date thereof, shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Article XII. The
above provisions shall similarly apply to successive transactions of the
foregoing type.
(c) Notwithstanding any other provision of this Section 12.4 to the
contrary, if any Fundamental Change occurs, then the Conversion Price in effect
will be adjusted immediately after such Fundamental Change as follows:
(i) in the case of a Non-Share Fundamental Change, the
Conversion Price of the Convertible Debentures immediately following
such Non-Share Fundamental Change shall be the lower of (A) the
Conversion Price in effect immediately prior to such Non-Share
Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to Section 12.3, and (B) the product of
(1) the greater of the Applicable Price and the then applicable
Reference Market Price and (2) a fraction, the numerator of which is
$1,000 and the denominator of which is (x) the amount of the Optional
Redemption Price set forth in Section 10.2 for $1,000 in principal
amount of Convertible Debentures if the redemption date were the date
of such Non-Share Fundamental Change plus (y) any then-accrued and
unpaid interest on $1,000 principal amount of Convertible Debentures
provided that if the Non-Share Fundamental
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Change occurs prior to September 30, 2003, the Optional Redemption
Price for purposes of the foregoing will be recalculated pursuant to
the provisions of subparagraph (iii) below to provide for a lower
conversion price to account for the loss of the option value imbedded
in the Convertible Debentures immediately before the Non-Share
Fundamental Change; and
(ii) in the case of a Common Share Fundamental Change, the
Conversion Price of the Convertible Debentures immediately following
such Common Share Fundamental Change shall be the Conversion Price in
effect immediately prior to such Common Share Fundamental Change, but
after giving effect to any other prior adjustments effected pursuant to
Section 12.3, multiplied by a fraction, the numerator of which is the
Purchaser Share Price and the denominator of which is the Applicable
Price; provided, however, that in the event of a Common Share
Fundamental Change in which (A) 100% of the value of the consideration
received by a holder of Common Shares is common stock of the successor,
acquiror or other third party (and cash, if any, paid with respect to
any fractional interests in such common stock resulting from such
Common Share Fundamental Change) and (B) all of the Common Shares shall
have been exchanged for, converted into or acquired for, common stock
of the successor, acquiror or other third party (and any cash with
respect to fractional interests), the Conversion Price of the
Convertible Debentures immediately following such Common Share
Fundamental Change shall be the Conversion Price in effect immediately
prior to such Common Share Fundamental Change multiplied by a fraction,
the numerator of which is one (1) and the denominator of which is the
number of shares of common stock of the successor, acquiror or other
third party received by a holder of one share Common Share as a result
of such Common Share Fundamental Change.
(iii) For purposes of Section 12.4(c)(i), the Optional
Redemption Price to be used for purposes of making the adjustment of
the Conversion Price set forth therein in the event a Non-Share
Fundamental Change occurs prior to September 30, 2003 (the
"Recalculated Optional Redemption Price") shall be determined pursuant
to the terms of this Section 12.4(c)(iii), provided that if the
Recalculated Optional Redemption Price is determined to be less than
the Optional Redemption Price, the Optional Redemption Price shall
instead be used for purposes of making the adjustment of the Conversion
Price set forth in Section 12.4(c)(i). Within 10 days of such Non-Share
Fundamental Change, the Company and the Majority Holders shall each
appoint an Experienced Appraiser (the two Experienced Appraisers
appointed by the Company and the Majority Holders are hereinafter
referred to collectively as the "Initial RORP Experienced Appraisers")
to objectively determine the Recalculated Optional Redemption Price.
The Initial RORP Experienced Appraisers shall be instructed to
independently recalculate the Optional Redemption Price so that such
price accounts for the lost option value embedded in the Convertible
Debenture as a result of the Non-Share Fundamental Change (the "RORP
Instructions"), which recalculated price shall constitute the
Recalculated Optional Redemption Price. The Initial RORP Experienced
Appraisers shall complete their appraisals and provide notice of their
determination to each other within 30 days after the Non-Share
Fundamental Change (the "RORP Appraisal Period"). If the Initial RORP
Experienced Appraisers shall not agree on the Recalculated Optional
Redemption Price, then within 10 days after the RORP Appraisal Period,
they shall jointly appoint a third Experienced Appraiser to objectively
determine the Recalculated Optional Redemption Price and, in connection
therewith, provide to such firm information as to their calculations of
the Recalculated Optional Redemption Price. The third Experienced
Appraiser shall be instructed to objectively determine the Recalculated
Optional Redemption Price in accordance with the RORP Instructions and
to select the Recalculated Optional Redemption Price determined by one
of the Initial RORP Experienced Appraisers that most closely
approximates the Recalculated Optional Redemption Price determined by
such third Experienced Appraiser (the "Selected Recalculated Optional
Redemption Price"). The appraisal of such third Experienced Appraiser
shall be completed within 20 days after the date of appointment of such
firm, whereupon it shall select the Selected Recalculated Optional
Redemption Price. The selection of the Selected Recalculated Optional
Redemption Price by the third Experienced Appraiser shall be final and
binding on the Company and each Holder. All costs and expenses incurred
in connection with the appraisals, including fees of investment
bankers, necessary to determine the Recalculated Optional Redemption
Price shall be borne by the Company. The Company covenants and agrees
that it shall enter into engagement agreements with the foregoing
Experienced Appraisers containing customary terms and conditions,
including customary indemnification provisions.
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Section 12.5 Notice of Adjustments of Conversion Price. Whenever the
Conversion Price is adjusted as herein provided:
(a) the Company shall compute the adjusted Conversion Price
and shall prepare a certificate signed by the chief financial officer
or the treasurer of the Company setting forth the adjusted Conversion
Price and showing in reasonable detail the facts upon which such
adjustment is based, and such certificate shall forthwith be filed with
the Trustee and the transfer agent for the Convertible Preferred
Securities and the Convertible Debentures; and
(b) a notice stating the Conversion Price has been adjusted
and setting forth the adjusted Conversion Price shall as soon as
practicable be mailed by the Company to all record holders of
Convertible Preferred Securities and the Convertible Debentures at
their last addresses as they appear upon the transfer books of the
Company and the Trust.
Section 12.6 Prior Notice of Certain Events. In case:
(a) the Company shall (i) declare any dividend (or any other
distribution) on its Common Shares, other than (A) a dividend payable
in Common Shares or (B) a dividend payable in cash that would not
require an adjustment pursuant to Section 12.3(c) or (d), or (ii)
authorize a tender or exchange offer that would require an adjustment
pursuant to Section 12.3(e);
(b) the Company shall authorize the granting to all holders of
Common Shares of rights or warrants to subscribe for or purchase any
shares of stock of any class or series or of any other rights or
warrants;
(c) of any reclassification of Common Shares (other than a
subdivision or combination of the outstanding Common Shares, or a
change in par value, or from par value to no par value, or from no par
value to par value), or of any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the
Company shall be required, or of the sale or transfer of all or
substantially all of the assets of the Company or of any compulsory
share exchange whereby the Common Shares are converted into other
securities, cash or other property; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall (i) if any Convertible Preferred Securities are
outstanding, cause to be filed with the transfer agent for the Convertible
Preferred Securities, and shall cause to be mailed to the holders of record of
the Convertible Preferred Securities, at their last addresses as they shall
appear upon the stock transfer books of the Trust or (ii) shall cause to be
mailed to all Holders at their last addresses as they shall appear in the
Security Register, at least 15 days prior to the applicable record or effective
date hereinafter specified, a notice stating (A) the date on which a record (if
any) is to be taken for the purpose of such dividend, distribution, rights or
warrants or, if a record is not to be taken, the date as of which the holders of
Common Shares of record to be entitled to such dividend, distribution, rights or
warrants are to be determined or (B) the date on which such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up is expected to become effective, and the date as of which it is
expected that holders of Common Shares of record shall be entitled to exchange
their shares of Common Shares for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer, share
exchange, dissolution, liquidation or winding up (but no failure to mail such
notice or any defect therein or in the mailing thereof shall affect the validity
of the corporate action required to be specified in such notice). If at any time
the Trustee shall not be the Conversion Agent, a copy of such notice shall also
forthwith be filed by the Company with the Trustee.
Section 12.7 Certain Additional Rights. In case the Company shall, by
dividend or otherwise, declare or make a distribution on the Common Shares
referred to in Section 12.3(c) or 12.3(d), the Holder of the Convertible
Debentures, upon the conversion thereof subsequent to the close of business on
the date fixed for the determination of stockholders entitled to receive such
distribution and prior to the effectiveness of the Conversion Price adjustment
in respect of such distribution, shall also be entitled to receive for each
Common Share into which the Convertible Debentures are converted, the portion of
the Common Shares, rights, warrants, evidences
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of indebtedness, shares of Capital Stock, cash and assets so distributed
applicable to one Common Share; provided, however, that, at the election of the
Company (whose election shall be evidenced by a resolution of the Board of
Trustees) with respect to all Holders so converting, the Company may, in lieu of
distributing to such Holder any portion of such distribution not consisting of
cash or securities of the Company, pay such Holder an amount in cash equal to
the fair market value thereof (as determined in good faith by the Board of
Trustees, whose determination shall be conclusive and evidenced by a resolution
of the Board of Trustees). If any conversion of Convertible Debentures described
in the immediately preceding sentence occurs prior to the payment date for a
distribution to holders of Common Shares which the Holder of Convertible
Debentures so converted is entitled to receive in accordance with the
immediately preceding sentence, the Company may elect (such election to be
evidenced by a resolution of the Board of Trustees) to distribute to such Holder
a due bill for the Common Shares, rights, warrants, evidences of indebtedness,
shares of Capital Stock, cash or assets to which such Holder is so entitled,
provided, that such due bill (a) meets any applicable requirements of the
principal national securities exchange or other market on which the Common
Shares are then traded and (b) requires payment or delivery of such Common
Shares, rights, warrants, evidences of indebtedness, shares of Capital Stock,
cash or assets no later than the date of payment or delivery thereof to holders
of Common Share receiving such distribution.
Section 12.8 Trustee Not Responsible for Determining Conversion Price
or Adjustments. Neither the Trustee nor any Conversion Agent shall at any time
be under any duty or responsibility to any Holder of any Convertible Debenture
to determine whether any facts exist which may require any adjustment of the
Conversion Price, or with respect to the nature or extent of any such adjustment
when made, or with respect to the method employed. Neither the Trustee nor any
Conversion Agent shall be accountable with respect to the validity or value (or
the kind or amount) of any Common Shares or of any securities or property, which
may at any time be issued or delivered upon the conversion of any Convertible
Debenture; and neither the Trustee nor any Conversion Agent makes any
representation with respect thereto. Neither the Trustee nor any Conversion
Agent shall be responsible for any failure of the Company to make any cash
payment or to issue, transfer or deliver any Common Shares or stock certificates
or other securities or property upon the surrender of any Convertible Debenture
for the purpose of conversion. All Convertible Debentures delivered for
conversion shall be delivered to the Trustee to be canceled by or at the
discretion of the Trustee, which shall dispose of the same as provided in
Section 2.12 of this Indenture.
Section 12.9 Reservation of Shares of Common Shares. The Company shall
at all times reserve and keep available, free from preemptive rights, out of its
authorized but unissued Common Shares or treasury shares, for the purpose of
effecting the conversion of Convertible Debentures, the full number of Common
Shares of the Company then issuable upon the conversion of all outstanding
Convertible Debentures.
Section 12.10 Payment of Certain Taxes upon Conversion. The Company
will pay any and all taxes that may be payable in respect of the issue or
delivery of its Common Shares on conversion of Convertible Debentures pursuant
hereto. The Company shall not, however, be required to pay any tax which may be
payable in respect of any transfer involved in the issue and delivery of its
Common Shares in a name other than that of the Holder of the Convertible
Debenture or Convertible Debentures to be converted, and no such issue or
delivery shall be made unless and until the person requesting such issue has
paid to the Company the amount of any such tax, or has established, to the
satisfaction of the Company, that such tax has been paid.
Section 12.11 Nonassessability. The Company covenants that all Common
Shares which may be issued upon conversion of Convertible Debentures will upon
issue in accordance with the terms hereof be duly and validly issued and fully
paid and nonassessable.
ARTICLE XIII
SUBORDINATION OF CONVERTIBLE DEBENTURES
Section 13.1 Convertible Debentures Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Convertible Debenture, by
the Holder's 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 Convertible Debentures and the payment of the principal of
(and premium, if any) and interest on each and
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all of the Convertible Debentures are hereby expressly made subordinate and
junior in right of payment to the prior payment in full of all Senior
Indebtedness of the Company, whether outstanding at the date of this Indenture
or thereafter incurred. No provision of this Article shall prevent the
occurrence of any default or Event of Default hereunder.
Section 13.2 Payment Over of Proceeds upon Dissolution, Etc. In the
event of (i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to the Company, its creditors or its property, (ii) any proceeding for the
liquidation, dissolution or other winding up of the Company voluntarily or
involuntarily, whether or not involving insolvency or bankruptcy proceedings,
(iii) any assignment by the Company for the benefit of creditors or (iv) any
other marshalling of assets of the Company, all amounts due upon all Senior
Indebtedness of the Company (including any interest thereon accruing after the
commencement of such proceedings) shall first be paid in full, or payment
thereof provided for in money in accordance with its terms, before any payment
is made by the Company on account of the principal (and premium, if any) or
interest on the Convertible Debentures; and any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the Holders of the Convertible Debentures or
the Trustee would be entitled to receive from the Company, except for the
provisions of this Article, shall be paid by the Company or by any receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, or by the Holders of the Convertible Debentures or by
the Trustee under this Indenture if received by them or it, directly to the
holders of Senior Indebtedness of the Company (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders, as
calculated by the Company) or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay such Senior Indebtedness
(including any interest thereon accruing after the commencement of such
proceedings) in full, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Holders of the Convertible Debentures or
to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee before all Senior Indebtedness of the Company is paid in full, or
provision is made for such payment, such payment or distribution shall be held
in trust for the benefit of and shall be paid over or delivered to the holders
of such Senior Indebtedness or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, and their respective
interests may appear, as calculated by the Company, for application to the
payment of all Senior Indebtedness of the Company, as the case may be, remaining
unpaid to the extent necessary to pay such Senior Indebtedness in full, after
giving effect to any concurrent payment or distribution to or for the benefit of
the holders of such Senior Indebtedness.
For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include shares of Capital Stock of the
Company as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment which are
subordinated in right of payment to all Senior Indebtedness which may at the
time be outstanding to substantially the same extent as, or to a greater extent
than, the Convertible Debentures are so subordinated as provided in this
Article. The consolidation of the Company with, or the merger of the Company
into, another Person or the liquidation or dissolution of the Company following
the conveyance or transfer of its properties and assets substantially as an
entirety to another Person upon the terms and conditions set forth in Article IX
of this Indenture shall not be deemed a dissolution, winding up, liquidation,
reorganization, readjustment, composition, assignment for the benefit of
creditors or marshalling of assets and liabilities of the Company for the
purposes of this Section if the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance or
transfer such properties and assets substantially as an entirety, as the case
may be, shall, as a part of such consolidation, merger, conveyance or transfer,
comply with the conditions set forth in Article IX of this Indenture.
Section 13.3 Prior Payment to Senior Indebtedness upon Acceleration of
Convertible Debentures. In the event that any Convertible Debentures are
declared due and payable before their Stated Maturity, then and in such event
the holders of Senior Indebtedness shall be entitled to receive payment in full
of all amounts due or to become due on or in respect of all Senior Indebtedness
or provision shall be made for such payment in cash, before
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the Holders of the Convertible Debentures are entitled to receive any payment
(including any payment which may be payable by reason of the payment of any
other indebtedness of the Company being subordinated to the payment of the
Convertible Debentures) by the Company on account of the principal of (or
premium, if any) or interest on the Convertible Debentures or on account of the
purchase or other acquisition of Convertible Debentures.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Convertible Debenture
prohibited by the foregoing provisions of this Section, and if such fact shall,
at or prior to the time of such payment, have been made known to the Trustee or,
as the case may be, such Holder, then and in such event such payment shall be
paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 13.2 would be applicable.
Section 13.4 No Payment When Senior Indebtedness in Default. In the
event and during the continuation of any default by the Company in the payment
of principal, premium, if any, interest or any other payment due on any Senior
Indebtedness of the Company, as the case may be, beyond any applicable grace
period with respect thereto, or in the event that the maturity of any Senior
Indebtedness of the Company has been accelerated because of a default, then, in
any such case, no payment shall be made by the Company with respect to the
principal (including redemption payments, if any) of, premium, if any, or
interest on the Convertible Debentures until such default is cured or waived or
ceases to exist or any such acceleration or demand for payment has been
rescinded.
Section 13.5 Payment Permitted in Certain Situations. Nothing contained
in this Article or elsewhere in this Indenture or in the Convertible Debentures
shall prevent (a) the Company, at any time except during the pendency of any
dissolution, winding-up, liquidation or reorganization of the Company, whether
voluntary or involuntary or any bankruptcy, insolvency, receivership or other
proceedings of the Company referred to in Section 13.2 or under the conditions
described in Section 13.3 or 13.4, from making payments at any time of principal
of or premium, if any, or interest on the Convertible Debentures, or (b) the
application by the Trustee of any money deposited with it hereunder to the
payment of or on account of the principal of, or premium, if any, or interest on
the Convertible Debentures or the retention of such payment by the Holders, if,
at the time of such application by the Trustee, it did not have knowledge that
such payment would have been prohibited by the provisions of this Article.
Section 13.6 Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness or the provision for
such payment in cash or cash equivalents or otherwise in a manner satisfactory
to the holders of Senior Indebtedness, the Holders of Convertible Debentures
shall be subrogated to the extent of the payments or distributions made to the
holders of such Senior Indebtedness pursuant to the provisions of this Article
(equally and ratably with the holders of indebtedness of the Company which by
its express terms is subordinated to indebtedness of the Company to
substantially the same extent as the Convertible Debentures are subordinated to
the Senior Indebtedness and is entitled to like rights of subrogation) 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 (and premium, if any) and interest on the
Convertible Debentures shall be paid in full. For purposes of such subrogation,
no payments or distributions to the holders of the Senior Indebtedness of any
cash, property or securities to which the Holders of Convertible Debentures 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 or for the benefit
of the holders of Senior Indebtedness by Holders of Convertible Debentures or
the Trustee, shall, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of Convertible Debentures, be deemed to be a
payment or distribution by the Company to or on account of the Senior
Indebtedness.
Section 13.7 Provisions Solely to Define Relative Rights. The
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of Convertible Debentures 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 Convertible Debentures
is intended to or shall (a) impair, as among the Company, its creditors other
than holders of Senior Indebtedness and the Holders of Convertible Debentures,
the obligation of the Company, which is absolute and unconditional (and which,
subject to the rights under this Article of the
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holders of Senior Indebtedness, is intended to rank equally with all other
general obligations of the Company), to pay to the Holders of Convertible
Debentures the principal of (and premium, if any) and interest on the
Convertible Debentures 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 Convertible Debentures and creditors of the Company,
as the case may be, other than the holders of Senior Indebtedness; or (c)
prevent the Trustee or the Holder of any Convertible Debenture 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 to receive cash, property and securities otherwise payable
or deliverable to the Trustee or such Holder.
Section 13.8 Trustee to Effectuate Subordination. Each Holder of a
Convertible Debenture by such Holder's acceptance thereof authorizes and directs
the Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee such Holder's attorney-in-fact for any and all such
purposes.
Section 13.9 No Waiver of Subordination Provisions. 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, in good faith, by any such holder, or by any noncompliance 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.
Without in any way limiting the generality of the foregoing paragraph,
the holders of 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
Convertible Debentures, without incurring responsibility to the Holders of
Convertible Debentures and without impairing or releasing the subordination
provided in this Article or the obligations hereunder of the Holders of
Convertible Debentures to the holders of Senior Indebtedness do any one or more
of the following (a) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Indebtedness or otherwise amend or
supplement in any manner Senior Indebtedness or any instrument evidencing the
same or any agreement under which Senior Indebtedness is outstanding; (b) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness; (c) release any Person liable in any
manner for the collection of Senior Indebtedness; and (d) exercise or refrain
from exercising any rights against the Company and any other Person.
Section 13.10 Notice to Trustee. The Company shall give prompt written
notice to a Responsible Officer of 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 Convertible Debentures pursuant to the provisions of this Article.
Notwithstanding the provisions of this Article or any other 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 Convertible Debentures pursuant to the provisions of this
Article, unless and until a Responsible Officer of the Trustee shall have
received written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of Section 6.2
of this Indenture, shall be entitled in all respects to assume that no such
facts exist; provided, however, that if the Trustee shall have not received the
notice provided for in this Section at least two Business Days 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 (or premium, if
any) or interest on any Convertible Debentures, then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and authority
to receive such money and to apply the same to the purposes for which they were
received, and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.
Subject to the provisions of Section 6.2 of this Indenture, the Trustee
shall be entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee therefor). 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
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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 13.11 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, subject to the provisions of Section 6.2 of this
Indenture, and the Holders of Convertible Debentures shall be entitled to
conclusively 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 Convertible Debentures, 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, as the case may be, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article.
Section 13.12 Trustee Not Fiduciary for Holders of 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 such Senior Indebtedness shall be read into this
Indenture against the Trustee. Except with respect to Section 13.4, the Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and shall not be liable to any such holders or creditors if it
shall in good faith pay over or distribute to Holders of Convertible Debentures
or to the Company or to any other Person cash, property or securities to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
or otherwise.
Section 13.13 Rights of Trustee as 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 XIII shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.7 of this Indenture.
Section 13.14 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 hereunder, 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 13.13 shall not
apply to the Company or any Affiliate of the Company if it or such Affiliate
acts as Paying Agent.
Section 13.15 Certain Conversions Deemed Payment. For purposes of this
Article only, (a) the issuance and delivery of junior securities (or cash paid
in lieu of fractional shares) upon conversion of Convertible Debentures in
accordance with Article XII shall not be deemed to constitute a payment or
distribution on account of the principal of or premium or interest on
Convertible Debentures or on account of the purchase or other acquisition of
Convertible Debentures, and (b) the payment, issuance or delivery of cash,
property or securities (other than junior securities and cash paid in lieu of
fractional shares) upon conversion of a Convertible Debenture shall be deemed to
constitute payment on account of the principal of such Convertible Debenture.
For the purposes of this Section, the term "junior securities" means (i) shares
of any Capital Stock of any class of the Company and (ii) securities of the
Company which are subordinated in right of payment to all Senior Indebtedness
which may be outstanding at the time of issuance or delivery of such securities
to substantially the same extent as, or to a greater extent than, the
Convertible Debentures are so subordinated as provided in this Article. Nothing
contained in this Article or elsewhere in this Indenture or in the Convertible
Debentures is intended to or shall impair, as among the Company, its creditors
other than holders of Senior Indebtedness and the Holders of Convertible
Debentures, the right, which is absolute and unconditional, of the Holder of any
Convertible Debenture to convert such Convertible Debenture in accordance with
Article XII.
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ARTICLE XIV
EXPENSES
Section 14.1 Payment of Expenses. In connection with the offering, sale
and issuance of the Convertible Debentures to the Institutional Trustee and in
connection with the sale of the Trust Securities by the Trust, the Company, in
its capacity as borrower with respect to the Convertible Debentures, shall:
(a) pay all costs and expenses of the Trust (including, but
not limited to, costs and expenses relating to the organization of the
Trust, the fees and expenses of the Institutional Trustee and the
Delaware Trustee, the costs and expenses relating to the operation of
the Trust, including without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses
for printing and engraving and computing or accounting equipment,
paying agent(s), registrar(s), transfer agent(s), duplicating, travel
and telephone and other telecommunications expenses and costs and
expenses incurred in connection with the acquisition, financing, and
disposition of Trust assets);
(b) pay all costs and expenses related to the enforcement by
the Institutional Trustee of the rights of the holders of the Trust
Securities;
(c) be primarily liable for any indemnification obligations
arising with respect to the Declaration; and
(d) pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all
liabilities, costs and expenses with respect to such taxes of the
Trust.
Section 14.2 Payment Upon Resignation or Removal. Upon termination of
this Indenture or the removal or resignation of the Trustee pursuant to Section
6.8 of this Indenture, the Company shall pay to the Trustee all amounts accrued
to the date of such termination, removal or resignation. Upon termination of the
Declaration or the removal or resignation of the Delaware Trustee or the
Institutional Trustee, as the case may be, pursuant to Section 5.6 of the
Declaration, the Company shall pay to the Delaware Trustee or the Institutional
Trustee, and their respective counsel, as the case may be, all amounts accrued
to the date of such termination, removal or resignation.
ARTICLE XV
MISCELLANEOUS PROVISIONS
Section 15.1 Incorporators, Stockholders, Officers and Trustees of
Company Exempt from Individual Liability. No recourse under or upon any
obligations, covenant or agreement contained in this Indenture, in any
Convertible Debenture, or because of any indebtedness evidenced thereby, shall
be had against any incorporator, as such or against any past, present or future
shareholder, officer or director, trustee, as such, of the Company or of any
successor, either directly or through the Company or any successor, under any
rule of law, statute or constitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the
Convertible Debentures by the Holders thereof and as part of the consideration
of the issue of the Convertible Debentures.
Section 15.2 Provisions of Indenture for the Sole Benefit of Parties
and Holders of Convertible Debentures. Nothing in this Indenture or in the
Convertible Debentures, expressed or implied, shall give or be construed to give
to any Person, firm or corporation, other than the parties hereto, any Paying
Agent and their successors hereunder, the holders of Senior Indebtedness, the
holders of Convertible Preferred Securities (to the extent provided herein) and
the Holders of the Convertible Debentures any legal or equitable right, remedy
or claim under this Indenture or under any covenant or provision herein
contained, all such covenants and provisions being for the sole benefit of the
parties hereto and their successors and of the Holders of the Convertible
Debentures.
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Section 15.3 Right to Assign; Successors and Assigns Bound by
Indenture. The Company shall have the right at all times to assign any of its
respective rights or obligations under this Indenture to a direct or indirect
wholly-owned Subsidiary of the Company, other than an entity which will be taxed
as a partnership for federal income tax purposes; provided that, in the event of
any such assignment, the Company shall remain liable for all of its obligations
under this Indenture. Subject to the foregoing, this Indenture will be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. The rights and obligations of the parties under this
Indenture may not otherwise be assigned by such parties.
All the covenants, stipulations, promises and agreements in this
Indenture by the parties hereto shall bind their respective successors and
assigns, whether so expressed or not.
Section 15.4 Notices and Demands on Company, Trustee and Holders of
Convertible Debentures. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
the Holders of Convertible Debentures to or on the Company may be given or
served by being deposited postage prepaid, first-class mail (except as otherwise
specifically provided herein) addressed (until another address of the Company is
filed by the Company with the Trustee) to Capital Trust, 605 Third Avenue, 26th
Floor, New York, New York, 10016, Attention: Chief Financial Officer. Any
notice, direction, request or demand by the Company or any Holder of Convertible
Debentures to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made at the Corporate Trust Office.
Where this Indenture provides for notice to Holders of Convertible
Debentures of any event such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed by first-class
mail, postage prepaid to such Holders as their names and addresses appear in the
Convertible Debenture register within the time prescribed. 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. 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, shall affect the
sufficiency of such notice, and any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Company and
Holders of Convertible Debentures when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be reasonably acceptable to the Trustee shall be deemed to be a
sufficient giving of such notice.
Section 15.5 Officers' Certificates and Opinions of Counsel; Statements
to Be Contained Therein. Upon any application or demand by the Company to the
Trustee to take action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or demand as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition 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 such person, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with and (d) a statement as to whether
or not, in the opinion of such person, such condition or covenant has been
complied with.
Any certificate, statement or opinion of any officer of the Company 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
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certificate or opinion or representations with respect to the matters upon which
his certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of counsel may be based, insofar as it
relates to factual matters or information with respect to which is in the
possession of the Company, upon the certificate, statement or opinion of or
representations by an officer or officers of the Company, unless such counsel
knows that the certificate, statement or opinion or representations with respect
to the matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know that
the same are erroneous.
Any certificate, statement or opinion of an officer of the Company or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Company, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Trustee shall contain a statement
that such firm is independent.
Section 15.6 Payments Due on Saturdays, Sundays and Holidays. Except as
otherwise provided in Section 2.5, if the date of Maturity of interest on or
principal of the Convertible Debentures or the date fixed for redemption or
repayment of any such Convertible Debenture shall not be a Business Day, then
payment of interest or principal need not be made on such date, but may be made
on the next succeeding Business Day; provided that if such next succeeding
Business Day falls in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on the date of Maturity or the date fixed for redemption,
and no interest shall accrue for the period after such date.
Section 15.7 Conflict of Any Provision of Indenture with Trust
Indenture Act. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with another provision included in this Indenture which
is required by the Trust Indenture Act, such required provision shall control.
Section 15.8 New York Law to Govern. THIS INDENTURE AND THE CONVERTIBLE
DEBENTURES SHALL BE DEEMED TO BE CONTRACTS MADE AND TO BE PERFORMED ENTIRELY IN
THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF SAID STATE WITHOUT REGARD TO THE CONFLICTS OF LAW
RULES OF SAID STATE.
Section 15.9 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.
Section 15.10 Effect of Headings; Gender. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof. The use of the masculine, feminine or neuter
gender herein shall not limit in any way the applicability of any term or
provision hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereto affixed and
attested, all as of the day and year first above written.
CAPITAL TRUST
By: /s/ John R. Klopp
----------------------------------
Name: John R. Klopp
Title: Chief Executive Officer
WILMINGTON TRUST COMPANY,
as Trustee
By: /s/ Emmett R. Harmon
----------------------------------
Name: Emmett R. Harmon
Title: Vice President
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SCHEDULE 2.5(a)
The following table lists the Coupon Rate in effect for the Convertible
Debentures for the periods specified from the Issuance Date through the Maturity
Date.
Period Coupon Rate
------ -----------
July 28, 1998 through September 30, 2004 8.25%
October 1, 2004 through September 30, 2005 9.00%
October 1, 2005 through September 30, 2006 9.75%
October 1, 2006 through September 30, 2007 10.50%
October 1, 2007 through September 30, 2008 11.25%
October 1, 2008 through September 30, 2009 12.00%
October 1, 2009 through September 30, 2010 12.75%
October 1, 2010 through September 30, 2011 13.50%
October 1, 2011 through September 30, 2012 14.25%
October 1, 2012 through September 30, 2013 15.00%
October 1, 2013 through September 30, 2014 15.75%
October 1, 2014 through September 30, 2015 16.50%
October 1, 2015 through September 30, 2016 17.25%
October 1, 2016 through September 30, 2017 18.00%
October 1, 2017 through Maturity Date 18.75%
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EXHIBIT A
[(FORM OF FACE OF CONVERTIBLE DEBENTURE)]
No. __________ CUSIP NO. __________
CAPITAL TRUST
8.25% STEP UP CONVERTIBLE JUNIOR SUBORDINATED DEBENTURE
PRIOR TO THE TRANSFER RESTRICTION TERMINATION DATE, ANY CERTIFICATE EVIDENCING A
CONVERTIBLE DEBENTURE SHALL BEAR A LEGEND IN SUBSTANTIALLY THE FOLLOWING FORM,
UNLESS OTHERWISE AGREED BY THE COMPANY (WITH WRITTEN NOTICE THEREOF TO THE
TRUSTEE): THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR
(C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR, IF THIS SECURITY IS
CONVERTIBLE INTO COMMON SHARES, THE COMMON SHARES ISSUABLE UPON CONVERSION OR
EXCHANGE OF THIS SECURITY EXCEPT (A) TO CT CAPITAL TRUST (THE "COMPANY") OR ANY
SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL ACCREDITED INVESTOR
THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE FOR THE CONVERTIBLE
PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE (OR, IF
THIS CERTIFICATE EVIDENCES COMMON SHARES, THE TRANSFER AGENT FOR THE COMMON
SHARES), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR TRANSFER AGENT), (E)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT
OR (F) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THE SECURITY EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE FOR THE CONVERTIBLE
PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE (OR, IF
THIS CERTIFICATE EVIDENCES COMMON SHARES, SUCH HOLDER MUST FURNISH TO THE
TRANSFER AGENT SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
COMPANY OR CT CONVERTIBLE TRUST I (THE "TRUST") MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT). IF THIS CERTIFICATE DOES NOT EVIDENCE COMMON SHARES AND IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A
U.S. PERSON, THE
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HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE FOR THE CONVERTIBLE
PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE, SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY OR THE TRUST
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED AFTER THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
NO LATER THAN 10 DAYS AFTER THE ISSUE DATE OF THE CONVERTIBLE DEBENTURES,
INFORMATION CONCERNING THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT,
THE ISSUE DATE, AND THE YIELD TO MATURITY OF THE CONVERTIBLE DEBENTURES MAY BE
OBTAINED FROM THE CHIEF FINANCIAL OFFICER OF CAPITAL TRUST AT 605 THIRD AVENUE,
26TH FLOOR, NEW YORK, NY 10016.
Capital Trust, a California business trust (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to, Wilmington Trust Company, as
Institutional Trustee (the "Institutional Trustee") for CT Convertible Trust I
or registered assigns, the principal sum of One Hundred Fifty Four Million Six
Hundred Fifty Thousand Dollars ($154,650,000) on September 30, 2018 and to pay
interest on said principal sum from July 28, 1998 (the "Issuance Date"), or from
the most recent interest payment date to which interest has been paid or duly
provided for, quarterly (subject to deferral as set forth herein) in arrears on
March 31, June 30, September 30, and December 31 (each such date, an "Interest
Payment Date") of each year commencing September 30, 1998, at the rate of 8.25%
per annum from and including the Issuance Date to and including September 30,
2004, such rate of interest per annum automatically increasing by an additional
.75% per annum (any such increase shall be cumulative with any such prior
increase(s)) on October 1, 2004 and again on each subsequent October 1, until
the principal hereof shall have become due and payable, and on any overdue
principal and premium, if any, and (without duplication and to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the same rate per annum compounded quarterly. The
amount of interest payable on any Interest Payment Date shall be computed on the
basis of a 360-day year of twelve 30-day months. The amount of interest payable
for any period shorter than a full quarterly period for which interest is
computed, will be computed on the basis of the actual number of days elapsed per
30-day month. In the event that any date on which interest is payable on this
Convertible Debenture is not a Business Day, then payment of interest payable on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date. The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in the Indenture (referred to on the reverse hereof) be paid
to the person in whose name this Convertible Debenture (or one or more
Predecessor Convertible Debentures, as defined in said Indenture) is registered
on the record date for such interest installment, which shall be the close of
business on the fifteenth day prior to such Interest Payment Date. Any such
interest installment not punctually paid or duly provided for shall forthwith
cease to be payable to the registered Holders on such record date and may be
paid to the Person in whose name this Convertible Debenture (or one or more
Predecessor Convertible Debentures) is registered at the close of business on a
special record date to be fixed by the Trustee for the payment of such defaulted
interest, notice whereof shall be given to the registered Holders of the
Convertible Debentures not less than 10 days prior to such special record date,
or may be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Convertible Debentures may
be listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture. The principal of (and premium, if any) and the
interest on this Convertible Debenture shall be payable at the office or agency
of the Trustee maintained for that purpose in any coin or currency of the United
States of America that at the time of payment is legal tender for payment of
public and private debts; provided, however, that payment of interest may be
made at the option of the Company by check mailed to the registered Holder at
such address as shall appear in the Security Register. Notwithstanding the
foregoing, so long as the Holder of this Convertible Debenture is the
Institutional Trustee, the
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payment of the principal of (and premium, if any) and interest on this
Convertible Debenture will be made at such place and to such account as may be
designated by the Institutional Trustee.
If the Company pays any Common Dividend during any quarter ending on an
interest payment date, the Coupon Rate in effect for such quarter shall
automatically increase by the Common Rate. For purposes of this provision, the
following terms have the following meanings:
(i) "Common Dividend" means any cash dividend or distribution payable
on the Common Shares of the Company.
(ii) "Common Rate" means, for any quarter, the fraction, expressed as a
percentage rate per annum, the numerator of which is the aggregate dollar
amount of Common Dividend paid on one common share during such quarter and
the denominator of which is $9.00, (subject to adjustment in proportion to
each adjustment to the conversion price triggered by events occurring prior
to such quarter).
The indebtedness evidenced by this Convertible Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Convertible Debenture
is issued subject to the provisions of the Indenture with respect thereto. Each
Holder of this Convertible Debenture, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
or her behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided and (c) appoints the
Trustee his or her attorney-in-fact for any and all such purposes. Each Holder
hereof, by his or her acceptance hereof, hereby waives all notice of the
acceptance of the subordination provisions contained herein and in the Indenture
by each holder of Senior Indebtedness, whether now outstanding or hereafter
incurred, and waives reliance by each such holder upon said provisions.
This Convertible Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Convertible Debenture are continued on the reverse
side hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
Capitalized terms used but not defined herein shall have the meaning given
them in the Indenture.
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IN WITNESS WHEREOF, the Company has caused this instrument to be executed.
CAPITAL TRUST
By:
-------------------------------
Name:
Title:
Attest:
By:
------------------
Name:
Title:
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[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Debentures described in the within-mentioned
Indenture.
Dated: July 28, 1998
WILMINGTON TRUST COMPANY,
as Trustee
By: ________________________________
Authorized Signatory
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[FORM OF REVERSE OF DEBENTURE]
This Convertible Debenture is one of the 8.25% Step Up Convertible Junior
Subordinated Debentures (herein referred to as the "Convertible Debentures"),
all issued or to be issued under and pursuant to an Indenture dated as of July
28, 1998, duly executed and delivered between the Company and Wilmington Trust
Company, as Trustee (the "Trustee") (the "Indenture"), to which Indenture and
all indentures supplemental thereto reference is hereby made for a description
of the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the Holders of the Convertible
Debentures. The Convertible Debentures are limited in aggregate principal amount
as specified in the Indenture.
Because of the occurrence and continuation of a Tax Event, in certain
circumstances, this Convertible Debenture may become due and payable at the
principal amount specified on the face hereof together with any interest accrued
thereon (the "Redemption Price"). If a redemption occurs on or before September
30, 2003, the Company shall pay to the Holders of the Convertible Debentures an
Adjusted Redemption Price specified in the Indenture. The Redemption Price or
Adjusted Redemption Price, as the case may be, shall be paid prior to 12:00
noon, New York City time, on the date of such redemption or at such earlier time
as the Company determines. The Company shall have the right to redeem this
Convertible Debenture at the option of the Company, upon not less than 30 nor
more than 60 days notice, without premium or penalty, in whole or in part at any
time on or after September 30, 2003 (an "Optional Redemption") at a price equal
to 100% of the principal amount of the Convertible Debentures (the "Optional
Redemption Price") together with accrued and unpaid interest (including
Additional Sums, if any, and, to the extent permitted by applicable law,
Compound Interest, if any) to, but excluding, the redemption date.
If Convertible Debentures are redeemed on any March 31, June 30, September
30, or December 31, accrued and unpaid interest shall be payable to holders of
record on the relevant record date.
So long as the corresponding Trust Securities are outstanding, the proceeds
from the redemption of any of the Convertible Debentures will be used to redeem
Trust Securities.
If the Convertible Debentures are only partially redeemed by the Company
pursuant to an Optional Redemption, the Convertible Debentures will be redeemed
pro rata.
In the event of redemption of this Convertible Debenture in part only, a
new Convertible Debenture or Convertible Debentures for the unredeemed portion
hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Convertible Debentures
and the interest accrued thereon may be declared, and upon such declaration
shall become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of a majority of the aggregate principal amount
of the Convertible Debentures at the time Outstanding, evidenced as provided in
the Indenture, to execute supplemental indentures adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or
of any supplemental indenture or modifying in any manner the rights of the
Holders of the Convertible Debentures; provided, however, that no such
supplemental indenture shall (i) extend the Stated Maturity of any Convertible
Debenture, or reduce the principal amount thereof or any premium thereon, or
reduce the rate or extend the time of payment of interest thereon, or reduce any
amount payable upon redemption thereof, or impair or affect the right of any
Holder to institute suit for the payment thereof, without the consent of the
Holder of each Convertible Debenture so affected, or (ii) reduce the aforesaid
percentage of Convertible Debentures, the Holders of which are required to
consent to any such supplemental indenture, without the consent of the Holder of
each Convertible Debenture. It is also provided in the Indenture that, with
respect to certain defaults or Events of Default regarding the Convertible
Debentures, prior to any declaration accelerating the maturity of such
Convertible Debentures, the Holders of a majority in aggregate principal amount
Outstanding of the Convertible Debentures (or, in the case of certain defaults
or Events of Default, all of the Convertible Debentures), may on behalf of the
Holders of all the Convertible Debentures waive any such past default or Event
of Default and its consequences. The preceding sentence shall not, however,
apply to a default in the payment of the principal of or premium, if any, or
interest on any of the Convertible Debentures. Any such consent or waiver by the
Holder of this Convertible
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Debenture (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such Holder and upon all future Holders and owners of this
Convertible Debenture and any Convertible Debenture which may be issued in
exchange or substitution therefor, irrespective of whether or not any notation
thereof is made upon this Convertible Debenture or such other Convertible
Debenture.
No reference herein to the Indenture and no provision of this Convertible
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Convertible Debenture at the time and
place and at the rate and in the money herein prescribed.
As long as an Event of Default under Section 5.1(a) of the Indenture shall
not have occurred and be continuing, the Company shall have the right at any
time during the term of the Convertible Debentures and from time to time to
extend the interest payment period of such Convertible Debentures for up to 20
consecutive quarters (an "Extension Period"), at the end of which period the
Company shall pay all interest then accrued and unpaid (together with interest
thereon at the rate specified for the Convertible Debentures to the extent that
payment of such interest is enforceable under applicable law). Before the
termination of any such Extension Period, the Company may further extend such
Extension Period, provided that such Extension Period together with all such
further extensions thereof shall not exceed 20 consecutive quarters. At the
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest and any additional amounts then due, the Company may commence a
new Extension Period.
As provided in the Indenture and subject to certain limitations therein set
forth, this Convertible Debenture is transferable by the registered Holder
hereof on the Security Register of the Company, upon surrender of this
Convertible Debenture for registration of transfer at the office or agency of
the Trustee in the City and State of New York accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or the
Trustee duly executed by the registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Convertible Debentures of
authorized denominations and for the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this Convertible
Debenture, the Company, the Trustee, any paying agent and the Registrar may deem
and treat the registered holder hereof as the absolute owner hereof (whether or
not this Convertible Debenture shall be overdue and notwithstanding any notice
of ownership or writing hereon made by anyone other than the Registrar) for the
purpose of receiving payment of or on account of the principal hereof and
premium, if any, and interest due hereon and for all other purposes, and neither
the Company nor the Trustee nor any paying agent nor any Registrar shall be
affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Convertible Debenture, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator, shareholder, officer or director, trustee, past, present or
future, as such, of the Company or of any predecessor or successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issuance
hereof, expressly waived and released.
The Holder of any Convertible Debenture has the right, exercisable at any
time through the close of business (New York time) on the last Business Day
prior to the Maturity Date (or, in the case of a Convertible Debenture called
for redemption, prior to the close of business on the Business Day prior to the
corresponding redemption date), to convert the principal amount thereof (or any
portion thereof that is an integral multiple of $1,000) into Common Shares at
the initial conversion rate of 85.47 Common Shares for each Convertible
Debenture (equivalent to a Conversion Price of $11.70 per Common Share), subject
to adjustment under certain circumstances. At least $1,000,000 of the principal
amount, or the entire amount principle amount, if less than $1,000,000, of the
Convertible Debentures held by the converting Holder must be converted in
connection with any conversion into Common Shares pursuant to the foregoing.
To convert a Convertible Debenture, a Holder must (a) complete and sign a
conversion notice substantially in the form attached hereto, (b) surrender the
Convertible Debenture to a Conversion Agent, (c) furnish appropriate
A-7
727411.13
<PAGE>
endorsements or transfer documents if required by the Conversion Agent and (d)
pay any transfer or similar tax, if required. Upon conversion, no adjustment or
payment will be made for interest or dividends, but if any Holder surrenders a
Convertible Debenture for conversion on or after the record date for the payment
of an installment of interest and prior to the opening of business on the next
Interest Payment Date, then, notwithstanding such conversion, the interest
payable on such Interest Payment Date will be paid to the registered Holder of
such Convertible Debenture on such record date. In such event, such Convertible
Debenture, when surrendered for conversion, need not be accompanied by payment
of an amount equal to the interest payable on such Interest Payment Date on the
portion so converted. However, if a redemption date falls between a record date
and the subsequent Interest Payment Date, the Holder will be entitled to
receive, on such redemption date, the interest accrued to, but excluding, the
redemption date. The number of shares issuable upon conversion of a Convertible
Debenture is determined by dividing the principal amount of the Convertible
Debenture converted by the Conversion Price in effect on the Conversion Date. No
fractional shares will be issued upon conversion but a cash adjustment will be
made for any fractional interest. The outstanding principal amount of any
Convertible Debenture shall be reduced by the portion of the principal amount
thereof converted into Common Shares.
The Convertible Debentures are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Convertible Debentures are exchangeable for a like aggregate principal amount of
Convertible Debentures of a different authorized denomination, as requested by
the Holder surrendering the same.
THE INDENTURE AND THE CONVERTIBLE DEBENTURES SHALL BE DEEMED TO BE
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY IN THE STATE OF NEW YORK, AND FOR
ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
SAID STATE WITHOUT REGARD TO THE CONFLICTS OF LAW RULES OF SAID STATE.
A-8
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<PAGE>
[FORM OF ELECTION TO CONVERT]
ELECTION TO CONVERT
To: Capital Trust
The undersigned owner of this Convertible Debenture hereby irrevocably
exercises the option to convert this Convertible Debenture, or the portion below
designated, into Common Shares of CAPITAL TRUST in accordance with the terms of
the Indenture referred to in this Convertible Debenture, and directs that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Date: _______________, ____
in whole _____ Portions of Convertible Debenture to be converted
($1,000 or integral multiples-thereof):$____________
----------------------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and Address, Including
Zip Code, and Social Security or Other Identifying
Number
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
Signature Guarantee:1 _______________________________
- --------
1 Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Conversion Agent, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Conversion Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
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727411.13
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ASSIGNMENT
[FORM OF ASSIGNMENT FOR CONVERTIBLE DEBENTURES]
For value received__________________________ hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
(Please insert social security or other taxpayer identification number of
assignee.)
the within Convertible Debenture and hereby irrevocably constitutes and appoints
_______ attorney to transfer the said Convertible Debenture on the books of the
Company, with full power of substitution in the premises.
In connection with any transfer of the within Convertible Debenture occurring
prior to the Transfer Restriction Termination Date, the undersigned confirms
that such Convertible Debenture is being transferred:
/ / To Capital Trust or a subsidiary thereof; or
/ / Pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
/ / To an Institutional Accredited Investor pursuant to and in compliance
with the Securities Act of 1933, as amended; or
/ / Pursuant to and in compliance with Regulation S under the Securities
Act of 1933, as amended; or
/ / Pursuant to and in compliance with Rule 144 under the Securities Act of
1933, as amended; or
/ / Pursuant to an effective registration statement.
and unless the box below is checked, the undersigned confirms that such
Convertible Debenture is not being transferred to an "affiliate" of the Company
as defined in Rule 144 under the Securities Act of 1933, as amended (an
"Affiliate"):
/ / The transferee is an Affiliate of the Company.
Dated: _____________________________
----------------------------------------
----------------------------------------
Signature(s)
- -------------------------------------
Signature Guarantee2
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of this Convertible Debenture in every particular
without alteration or enlargement or any change whatever.
- --------
2 (Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
A-10
727411.13
<PAGE>
EXHIBIT B
Wilmington Trust Company
1100 North Market Street
9th Floor
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Ladies and Gentleman:
Pursuant to Section 11.1 of the Indenture, dated as of July 28, 1998
between Capital Trust, a California business trust (the"Company") and Wilmington
Trust Company, (the "Trustee"), the Company has elected to defer payments of
interest by extending the interest payment period of such Convertible Debentures
(as defined in the Indenture) for the fiscal quarter ended [ ]. This will serve
to certify that the Company's election to defer such interest payments resulted
from a business judgment that the Company does not, and is not expected during
the period of extension to have or generate from ordinary operations the cash
resources, nor have the ability to borrow on favorable terms the necessary funds
in order to fund the payment of the deferred interest after due and good faith
consideration to the Company's financial condition and anticipated cash
requirements.
Sincerely yours,
[Chief Financial Officer] [Treasurer]
A-11
727411.13
<PAGE>
Exhibit 4.5
- --------------------------------------------------------------------------------
PREFERRED SECURITIES GUARANTEE AGREEMENT
CT CONVERTIBLE TRUST I
Dated as of July 28, 1998
- --------------------------------------------------------------------------------
727414.7
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND INTERPRETATION....................................1
SECTION 1.1. Definitions and Interpretation..................1
ARTICLE II TRUST INDENTURE ACT...............................................3
SECTION 2.1. Trust Indenture Act; Application................3
SECTION 2.2. Lists of Holders................................3
SECTION 2.3. Reports by the Preferred Guarantee Trustee......4
SECTION 2.4. Periodic Reports to Preferred Guarantee
Trustee.........................................4
SECTION 2.5. Evidence of Compliance with Conditions
Precedent.......................................4
SECTION 2.6. Events of Default; Waiver.......................4
SECTION 2.7. Event of Default; Notice........................4
SECTION 2.8. Conflicting Interests...........................5
ARTICLE III POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE..........5
SECTION 3.1. Powers and Duties of the Preferred Guarantee
Trustee.........................................5
SECTION 3.2. Certain Rights of Preferred Guarantee Trustee...6
SECTION 3.3. Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee..................8
ARTICLE IV PREFERRED GUARANTEE TRUSTEE.......................................8
SECTION 4.1. Preferred Guarantee Trustee: Eligibility........8
SECTION 4.2. Appointment, Removal and Resignation of
Preferred Guarantee Trustee.....................9
ARTICLE V GUARANTEE.........................................................9
SECTION 5.1. Guarantee.......................................9
SECTION 5.2. Waiver of Notice and Demand....................10
SECTION 5.3. Obligations Not Affected.......................10
SECTION 5.4. Rights of Holders..............................10
SECTION 5.5. Guarantee of Payment...........................11
SECTION 5.6. Subrogation....................................11
SECTION 5.7. Independent Obligations........................11
ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION........................11
SECTION 6.1. Limitation of Transactions.....................11
SECTION 6.2. Subordination..................................12
ARTICLE VII TERMINATION......................................................12
SECTION 7.1. Termination....................................12
ARTICLE VIIIINDEMNIFICATION..................................................12
SECTION 8.1. Exculpation....................................12
SECTION 8.2. Indemnification................................13
ARTICLE IX MISCELLANEOUS....................................................13
SECTION 9.1. Successors and Assigns.........................13
SECTION 9.2. Amendments.....................................13
SECTION 9.3. Notices........................................13
SECTION 9.4. Benefit........................................14
SECTION 9.5. Governing Law..................................14
727414.7
<PAGE>
PRIOR TO THE TRANSFER RESTRICTION TERMINATION DATE (AS DEFINED IN THE
DECLARATION), ANY CERTIFICATE EVIDENCING THIS PREFERRED SECURITIES GUARANTEE
SHALL BEAR A LEGEND IN SUBSTANTIALLY THE FOLLOWING FORM, UNLESS OTHERWISE AGREED
BY THE REGULAR TRUSTEES (WITH WRITTEN NOTICE TO THE INSTITUTIONAL TRUSTEE)
PURSUANT TO SECTION 9.1(D) OF THE DECLARATION:
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR
(C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION) RESELL OR OTHERWISE
TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON SHARES ISSUABLE UPON
CONVERSION OR EXCHANGE OF THIS SECURITY EXCEPT (A) TO CAPITAL TRUST (THE
"COMPANY") OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE WILMINGTON
TRUST COMPANY, AS TRUSTEE (OR, IF THIS CERTIFICATE EVIDENCES COMMON SHARES, THE
TRANSFER AGENT FOR THE COMMON SHARES), A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE OR TRANSFER AGENT), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT OR (F) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED
HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),
THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE
WILMINGTON TRUST COMPANY, AS TRUSTEE (OR, IF THIS CERTIFICATE EVIDENCES COMMON
SHARES, SUCH HOLDER MUST FURNISH TO THE TRANSFER AGENT SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY OR CT CONVERTIBLE TRUST I
(THE "TRUST") MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT). IF THIS CERTIFICATE DOES NOT
EVIDENCE COMMON SHARES AND IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE WILMINGTON TRUST COMPANY, AS TRUSTEE,
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY OR THE
TRUST MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED
AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY
727414.7
<PAGE>
EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATIONS UNDER THE SECURITIES ACT.
727414.7
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated
as of July 28, 1998, is executed and delivered by Capital Trust, a California
business trust (the "Guarantor"), and Wilmington Trust Company, as trustee (the
"Preferred Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined herein) of CT
Convertible Trust I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to a Declaration of Trust (the "Declaration"), dated
as of July 28, 1998, among the trustees of the Issuer named therein, the
Guarantor, as sponsor, and the holders from time to time of undivided beneficial
interests in the assets of the Issuer, the Issuer is issuing on the date hereof
up to 150,000 preferred securities (the "Preferred Securities"), having a
liquidation amount of $1,000 per Preferred Security, designated the 8.25% Step
Up Convertible Trust Preferred Securities.
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein.
WHEREAS, as of the date hereof, the Guarantor is also executing and
delivering a guarantee agreement (the "Common Securities Guarantee") in
substantially identical terms to this Preferred Securities Guarantee for the
benefit of the holders of the Common Securities (as defined herein), except that
if an Event of Default (as defined in the Indenture), has occurred and is
continuing, the rights of holders of the Common Securities to receive Guarantee
Payments under the Common Securities Guarantee are subordinated to the rights of
Holders of Preferred Securities to receive Guarantee Payments under this
Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions and Interpretation.
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings assigned to them
in this Section 1.1;
(b) terms defined in the Declaration as at the date of execution of
this Preferred Securities Guarantee have the same meaning when used in this
Preferred Securities Guarantee unless otherwise defined in this Preferred
Securities Guarantee;
(c) a term defined anywhere in this Preferred Securities Guarantee has
the same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;
727414.7
<PAGE>
(e) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred Securities
Guarantee, unless otherwise specified; a term defined in the Trust Indenture Act
has the same meaning when used in this Preferred Securities Guarantee, unless
otherwise defined in this Preferred Securities Guarantee or unless the context
otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Authorized Officer" of a Person means any Person that is authorized
to legally bind such Person, provided, however, that the Authorized Officer
signing an Officers' Certificate given pursuant to Section 314(a)(4) of the
Trust Indenture Act shall be the principal executive, financial or accounting
officer of such Person.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 1100 North Market Street, 9th
Floor, Wilmington, Delaware 19890-0001, Attention: Corporate Trust
Administration.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Event of Default" means (a) a failure by the Guarantor to perform any
of its payment or other obligations under this Preferred Securities Guarantee or
(b) if applicable, the failure by the Guarantor to deliver Common Shares upon an
appropriate election by a Holder of Preferred Securities to convert the
Preferred Securities into Common Shares.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration) that are required to be paid on such Preferred Securities to
the extent the Issuer shall have funds available therefor, (ii) the redemption
price (the "Redemption Price") or Adjusted Redemption Price specified in the
Indenture, as the case may be, and all accrued and unpaid Distributions to the
date of redemption, to the extent the Issuer has funds available therefor, with
respect to any Preferred Securities called for redemption by the Issuer, and
(iii) upon a voluntary or involuntary dissolution, winding-up or termination of
the Issuer (other than in connection with the redemption of all of the Preferred
Securities or the distribution of Debentures to the Holders in exchange for
Preferred Securities as provided in the Declaration), the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid Distributions on
the Preferred Securities to the date of payment, to the extent the Issuer shall
have funds available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders of Preferred Securities then
outstanding upon the liquidation of the Issuer (in either case, the "Liquidation
Distribution"). If an Event of Default (as defined in the Indenture) has
occurred and is continuing, the rights of holders of the Common Securities to
receive payments under the Common Securities Guarantee Agreement are
subordinated to the rights of Holders of Preferred Securities to receive
Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
727414.7
2
<PAGE>
"Indenture" means the Indenture dated as of July 28, 1998, between the
Guarantor (the "Debenture Issuer") and Wilmington Trust Company, as trustee.
"Majority in liquidation amount of the Preferred Securities" means,
except as provided in the terms of the Convertible Preferred Securities, or
except as provided by the Trust Indenture Act, a vote by Holder(s), voting
separately as a class, of more than 50% of the liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all Preferred Securities.
"Preferred Guarantee Trustee" means Wilmington Trust Company, until a
Successor Preferred Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Preferred Securities Guarantee and
thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice president, any assistant vice president,
secretary, any assistant secretary, the treasurer, any assistant treasurer or
other officer of the Corporate Trust Office of the Preferred Guarantee Trustee
customarily performing functions similar to those performed by any of the above
designated officers, and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Securities" means the Common Securities and the Preferred
Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
(a) This Preferred Securities Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions and the Trust Indenture Act shall be applicable to this Preferred
Securities Guarantee except as otherwise set forth herein, as if such guarantee
had been issued pursuant to an effective registration statement; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2. Lists of Holders.
(a) The Guarantor shall provide the Preferred Guarantee Trustee with a
list, in such form as the Preferred Guarantee Trustee may reasonably require, of
the names and addresses of the Holders ("List of Holders") (i) within 14 days
after each record date for payment of Distributions, as of such record date, and
(ii) at any other time, within 30 days of receipt by the Guarantor of a written
request for a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Preferred Guarantee Trustee, provided that the
Guarantor shall not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders given to
the Preferred Guarantee Trustee by the Guarantor. The
727414.7
3
<PAGE>
Preferred Guarantee Trustee may destroy any List of Holders previously given to
it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Preferred Guarantee Trustee.
Within 60 days after December 31 of each year, the Preferred Guarantee
Trustee shall provide to the Holders such reports as are required by Section 313
of the Trust Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The Preferred Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to Preferred Guarantee Trustee.
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information (if any) as are required by Section 314 and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form, the manner and at the times required by Section 314 of the Trust
Indenture Act.
Delivery of such reports, information and documents to the Preferred
Guarantee Trustee is for informational purposes only and the Preferred Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein, including the Guarantor's compliance with any of
its covenants hereunder (as to which the Preferred Guarantee Trustee is entitled
to rely exclusively on Officers' Certificates).
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7. Event of Default; Notice.
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default actually known to a Responsible Officer of the
Preferred Guarantee Trustee, transmit by mail, first class postage prepaid, to
the Holders, notices of all such Events of Default unless such defaults have
been cured before the giving of such notice, provided that the Preferred
Guarantee Trustee shall be protected in withholding such notice if and so long
as a Responsible Officer of the Preferred Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders except in the case of a default in the Guarantor's obligation to make
Guarantee Payments.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice thereof, or a Responsible
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Officer of the Preferred Guarantee Trustee charged with the administration of
this Preferred Securities Guarantee shall have obtained actual knowledge
thereof.
SECTION 2.8. Conflicting Interests.
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Preferred Guarantee Trustee.
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders and the Preferred Guarantee
Trustee shall not transfer this Preferred Securities Guarantee to any Person
except a Holder exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred
Guarantee Trustee of its appointment to act as Successor Preferred Guarantee
Trustee. The right, title and interest of the Preferred Guarantee Trustee shall
automatically vest in any Successor Preferred Guarantee Trustee, and such
vesting and succession of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the appointment of such
Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders.
(c) The Preferred Guarantee Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Preferred Securities Guarantee, and no implied covenants shall be read into
this Preferred Securities Guarantee against the Preferred Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) and is actually known to a Responsible Officer of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall exercise such
of the rights and powers vested in it by this Preferred Securities Guarantee,
and shall 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 or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of
Default that may have occurred:
(A) the duties and obligations of the
Preferred Guarantee Trustee shall be determined
solely by the express provisions of this Preferred
Securities Guarantee, and the Preferred Guarantee
Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Preferred Securities
Guarantee, and no implied covenants or obligations
shall be read into this Preferred Securities
Guarantee against the Preferred Guarantee Trustee;
and
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(B) in the absence of bad faith on the part
of the Preferred Guarantee Trustee, the Preferred
Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or
opinions furnished to the Preferred Guarantee Trustee
and conforming to the requirements of this Preferred
Securities Guarantee; but in the case of any such
certificates or opinions that by any provision hereof
are specifically required to be furnished to the
Preferred Guarantee Trustee, the Preferred Guarantee
Trustee shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable
for any error of judgment made in good faith by a
Responsible Officer of the Preferred Guarantee
Trustee, unless it shall be proved that the
Preferred Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such
judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be
taken by it in good faith in accordance with the
direction of the Holders of not less than a
Majority in liquidation amount of the Preferred
Securities relating to the time, method and place
of conducting any proceeding for any remedy
available to the Preferred Guarantee Trustee, or
exercising any trust or power conferred upon the
Preferred Guarantee Trustee under this Preferred
Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee
shall require the Preferred Guarantee Trustee to
expend or risk its own funds or otherwise incur
personal financial liability in the performance of
any of its duties or in the exercise of any of its
rights or powers, if the Preferred Guarantee
Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is
not reasonably assured to it under the terms of
this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee
Trustee, against such risk or liability is not
reasonably assured to it.
SECTION 3.2. Certain Rights of Preferred Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively
rely, and shall be fully 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, sent or
presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated
by this Preferred Securities Guarantee shall be
sufficiently evidenced by an Officers' Certificate.
(iii) Whenever, in the administration of this Preferred
Securities Guarantee, the Preferred Guarantee
Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or
omitting any action hereunder, the Preferred
Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad
faith on its part, request and conclusively rely
upon an Officers' Certificate which, upon receipt
of such request, shall be promptly delivered by the
Guarantor.
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(iv) The Preferred Guarantee Trustee shall have no duty
to see to any recording, filing or registration of
any instrument (or any rerecording, refiling or
re-registration thereof).
(v) The Preferred Guarantee Trustee may consult with
counsel of its selection, and the advice or opinion
of such counsel with respect to legal matters 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 accordance
with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates
and may include any of its employees. The Preferred
Guarantee Trustee shall have the right at any time
to seek instructions concerning the administration
of this Preferred Securities Guarantee from any
court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers
vested in it by this Preferred Securities Guarantee
at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred
Guarantee Trustee such security and indemnity,
reasonably satisfactory to the Preferred Guarantee
Trustee, against the costs, expenses (including
attorneys' fees and expenses and the expenses of
the Preferred Guarantee Trustee's agents, nominees
or custodians) and liabilities that might be
incurred by it in complying with such request or
direction, including such reasonable advances as
may be requested by the Preferred Guarantee
Trustee; provided that nothing contained in this
Section 3.2(a)(vi) shall be taken to relieve the
Preferred Guarantee Trustee, upon the occurrence of
an Event of Default, of its obligation to exercise
the rights and powers vested in it by this
Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound
to make any investigation into the facts or matters
stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or
document, but the Preferred Guarantee Trustee, in
its discretion, may make such further inquiry or
investigation into such facts or matters as it may
see fit.
(viii) The Preferred Guarantee Trustee may execute any of
the trusts or powers hereunder or perform any
duties hereunder either directly or by or through
agents, nominees, custodians or attorneys, and the
Preferred Guarantee 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.
(ix) Any action taken by the Preferred Guarantee Trustee
or its agents hereunder shall bind the Holders and
the signature of the Preferred Guarantee Trustee or
its agents alone shall be sufficient and effective
to perform any such action. No third party shall be
required to inquire as to the authority of the
Preferred Guarantee Trustee to so act or as to its
compliance with any of the terms and provisions of
this Preferred Securities Guarantee, both of which
shall be conclusively evidenced by the Preferred
Guarantee Trustee's or its agent's taking such
action.
(x) Whenever in the administration of this Preferred
Securities Guarantee the Preferred Guarantee
Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy
or right or taking any other action hereunder, the
Preferred Guarantee Trustee (i) may request
instructions from the Holders of a Majority in
liquidation amount of the Preferred Securities,
(ii) may refrain from enforcing such remedy or
right or taking such other action until such
instructions are received, and
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(iii) shall be protected in conclusively relying on
or acting in accordance with such instructions.
(xi) The Preferred Securities Trustee shall not be
liable for any action taken, suffered, or omitted
to be taken by it in good faith and reasonably
believed by it to be authorized or within the
discretion or rights or powers conferred upon it by
this Preferred Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee shall be deemed
to impose any duty or obligation on the Preferred Guarantee Trustee to perform
any act or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in which the
Preferred Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available to
the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Preferred
Securities Guarantee.
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1. Preferred Guarantee Trustee: Eligibility.
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under
the laws of the United States of America or any
State or Territory thereof or of the District of
Columbia, or a corporation or Person permitted by
the Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise
corporate trust powers, having a combined capital
and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or
examination by federal, state, territorial or
District of Columbia authority. If such corporation
publishes reports of condition at least annually,
pursuant to law or to the requirements of the
supervising or examining authority referred to
above, then, for the purposes of this Section
4.1(a)(ii), 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.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
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respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2. Appointment, Removal and Resignation of Preferred
Guarantee Trustee.
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery of an instrument of resignation or removal, the Preferred
Guarantee Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or removal
or resignation of the Preferred Guarantee Trustee pursuant to this Section 4.2,
the Guarantor shall pay to the Preferred Guarantee Trustee all amounts accrued
to the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of
set-off or counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders. The Guarantor will honor all obligations relating
to the conversion of the Preferred Securities into the Common Shares of the
Guarantor as set forth in the Declaration and the Indenture.
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SECTION 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right or remedy to require a proceeding
first against the Issuer or any other Person before proceeding directly against
the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price or Adjusted Redemption Price, as
the case may be, Liquidation Distribution or any other sums payable under the
terms of the Preferred Securities or the extension of time for the performance
of any other obligation under, arising out of, or in connection with, the
Preferred Securities (other than an extension of time for payment of
Distributions, Redemption Price or Adjusted Redemption Price, as the case may
be, Liquidation Distribution or other sum payable that results from the
extension of any interest payment period on the Debentures);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. Rights of Holders.
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities then outstanding have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Preferred Guarantee
Trustee in respect of this Preferred Securities Guarantee or to direct the
exercise of any trust or power conferred upon the Preferred Guarantee Trustee
under this Preferred Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce this Preferred
Securities Guarantee, any
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Holder of Preferred Securities may institute a legal proceeding directly against
the Guarantor to enforce the Preferred Guarantee Trustee's rights under this
Preferred Securities Guarantee, without first instituting a legal proceeding
against the Issuer, the Preferred Guarantee Trustee or any other person or
entity. The Guarantor waives any right or remedy to require that any action be
brought first against the Issuer or any other person or entity before proceeding
directly against the Guarantor. Notwithstanding the foregoing, if the Guarantor
has failed to make a guarantee payment, a Holder of Preferred Securities may
directly institute a proceeding against the Guarantor for enforcement of this
Preferred Securities Guarantee for such payment.
SECTION 5.5. Guarantee of Payment.
This Preferred Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 5.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the Holders
of Preferred Securities against the Issuer in respect of any amounts paid to
such Holders by the Guarantor under this Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
SECTION 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. Limitation of Transactions.
So long as any Preferred Securities remain outstanding, if (i) the
Guarantor has exercised its option to defer interest payments on the Debentures
by extending the interest payment period and such extension period, or any
extension thereof, shall be continuing, (ii) the Guarantor shall be in default
with respect to its payment or other obligations under this Preferred Securities
Guarantee or (iii) there shall have occurred and be continuing an Event of
Default under the Declaration or any event that, with the giving of notice or
lapse of time or both, would constitute an Event of Default under the
Declaration, then the Guarantor shall not (a) declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase, acquire, or make
any liquidation payment with respect to, any of its Capital Stock or (b) make
any payment of interest, principal or premium, if any, on or repay, repurchase
or redeem any debt securities of the Guarantor that rank pari passu with or
junior in interest to the Debentures or make any guarantee payment with respect
to any guarantee by the Guarantor of the debt securities of any subsidiary of
the Guarantor if such guarantee ranks pari passu with or junior in interest to
the Debentures (other than (i) as a result of a reclassification of the Capital
Stock of the Guarantor or the exchange or conversion of one class or series of
the Capital Stock of the Guarantor for another class or series of the Capital
Stock of the Guarantor, (ii) the purchase of fractional interests in shares of
the Capital Stock of the Guarantor pursuant to the conversion or exchange
provisions of such Capital Stock or the security being converted into or
exchanged for
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such Capital Stock, (iii) dividends or distributions in Common Shares of the
Guarantor, (iv) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of shares under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (v) payments under the Guarantee and Common Securities
Guarantee, (vi) purchases of Common Shares of the Guarantor related to the
issuance of Common Shares of the Guarantor or rights under any of the
Guarantor's benefit plans for its directors, officers or employees and (vii)
obligations under any dividend reinvestment and stock purchase plans).
SECTION 6.2. Subordination.
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor (except any liabilities that
may be pari passu expressly by their terms), (ii) pari passu with the most
senior preferred or preference shares now or hereafter issued by the Guarantor
and with any guaranty now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any Affiliate of the Guarantor and (iii)
senior to the Guarantor's Common Shares.
ARTICLE VII
TERMINATION
SECTION 7.1. Termination.
This Preferred Securities Guarantee shall terminate as to each Holder
upon (i) full payment of the Redemption Price and accrued and unpaid
distributions with respect to all Preferred Securities, (ii) the distribution of
the Common Shares to such Holder upon the conversion of such Holder's Preferred
Securities into the Common Shares, (iii) the distribution of the Debentures to
the Holders of the Preferred Securities or (iv) full payment of the amounts
payable in accordance with the Declaration upon liquidation of the Issuer. This
Preferred Securities Guarantee shall terminate completely upon full payment of
the amounts payable in accordance with the Declaration. Notwithstanding the
foregoing, this Preferred Securities Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any Holder must restore
payment of any sum paid under the Preferred Securities or under this Preferred
Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage, liability, expense or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in accordance with
this Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including
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information, opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses or any other facts pertinent to the
existence and amount of assets from which Distributions to Holders might
properly be paid.
SECTION 8.2. Indemnification.
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The provisions of this Section 8.2 shall survive the termination of
this Preferred Securities Guarantee or the resignation or removal of the
Preferred Guarantee Trustee.
When the Preferred Guarantee Trustee incurs expenses or renders
services in connection with an Event of Default specified in Section 5.1(d) or
Section 5.1(e) of the Indenture, the expenses (including the reasonable charges
and expenses of its counsel) and the compensation for services are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Successors and Assigns.
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding. Except in connection with any
merger or consolidation of the Guarantor with or into another entity permitted
by Section 9.1 of the Indenture or any sale, transfer or lease of the
Guarantor's assets to another entity permitted by Section 9.1 of the Indenture,
the Guarantor may not assign its rights or delegate its obligations under this
Preferred Securities Guarantee without the prior approval of the holders of at
least a Majority in liquidation amount of the Preferred Securities then
outstanding.
SECTION 9.2. Amendments.
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may only be amended with the prior approval of
the Holders of at least a Majority in liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of the Preferred Securities then outstanding. The provisions of
Section 12.2 of the Declaration with respect to meetings of Holders apply to the
giving of such approval.
SECTION 9.3. Notices.
All notices provided for in this Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
Wilmington Trust Company
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1100 North Market Street,
9th Floor
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Preferred Securities):
Capital Trust
605 Third Avenue, 26th Floor
New York, NY 10016
Attention: Chief Financial Officer
(c) If given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 9.4. Benefit.
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5. Governing Law.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
727414.7
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<PAGE>
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
CAPITAL TRUST, as Guarantor
By:/s/ John R. Klopp
-------------------------------
Name: John R. Klopp
Title: Chief Executive Officer
WILMINGTON TRUST COMPANY,
as Preferred Guarantee Trustee
By:/s/ Emmett R. Harmon
--------------------------------
Name: Emmett R. Harmon
Title: Vice President
727414.7
15
<PAGE>
Exhibit 4.6
- --------------------------------------------------------------------------------
COMMON SECURITIES GUARANTEE AGREEMENT
CT CONVERTIBLE TRUST I
Dated as of July 28, 1998
- --------------------------------------------------------------------------------
738639.2
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND INTERPRETATION...............................1
SECTION 1.1. Definitions and Interpretation.............1
ARTICLE II GUARANTEE....................................................2
SECTION 2.1. Guarantee..................................2
SECTION 2.2. Waiver of Notice and Demand................3
SECTION 2.3. Obligations Not Affected...................3
SECTION 2.4. Rights of Holders..........................3
SECTION 2.5. Guarantee of Payment.......................4
SECTION 2.6. Subrogation................................4
SECTION 2.7. Independent Obligations....................4
ARTICLE III LIMITATION OF TRANSACTIONS; SUBORDINATION....................4
SECTION 3.1. Limitation of Transactions.................4
SECTION 3.2. Subordination..............................5
ARTICLE IV TERMINATION..................................................5
SECTION 4.1. Termination................................5
ARTICLE V MISCELLANEOUS................................................5
SECTION 5.1. Successors and Assigns.....................5
SECTION 5.2. Amendments.................................5
SECTION 5.3. Notices....................................6
SECTION 5.4. Benefit....................................6
SECTION 5.5. Governing Law..............................6
738639.2
<PAGE>
PRIOR TO THE TRANSFER RESTRICTION TERMINATION DATE (AS DEFINED IN THE
DECLARATION), ANY CERTIFICATE EVIDENCING THIS COMMON SECURITIES GUARANTEE SHALL
BEAR A LEGEND IN SUBSTANTIALLY THE FOLLOWING FORM, UNLESS OTHERWISE AGREED BY
THE REGULAR TRUSTEES (WITH WRITTEN NOTICE TO THE INSTITUTIONAL TRUSTEE) PURSUANT
TO SECTION 9.1(D) OF THE DECLARATION:
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR
(C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION) RESELL OR OTHERWISE
TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON SHARES ISSUABLE UPON
CONVERSION OR EXCHANGE OF THIS SECURITY EXCEPT (A) TO CAPITAL TRUST (THE
"COMPANY") OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE WILMINGTON
TRUST COMPANY, AS TRUSTEE (OR, IF THIS CERTIFICATE EVIDENCES COMMON SHARES, THE
TRANSFER AGENT FOR THE COMMON SHARES), A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE OR TRANSFER AGENT), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT OR (F) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED
HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),
THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE
WILMINGTON TRUST COMPANY, AS TRUSTEE (OR, IF THIS CERTIFICATE EVIDENCES COMMON
SHARES, SUCH HOLDER MUST FURNISH TO THE TRANSFER AGENT SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY OR CT CONVERTIBLE TRUST I
(THE "TRUST") MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT). IF THIS CERTIFICATE DOES NOT
EVIDENCE COMMON SHARES AND IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE WILMINGTON TRUST COMPANY, AS TRUSTEE,
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY OR THE
TRUST MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED
AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY
738639.2
<PAGE>
EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATIONS UNDER THE SECURITIES ACT.
738639.2
<PAGE>
COMMON SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Common Securities Guarantee"), dated as
of July 28, 1998, is executed and delivered by Capital Trust, a California
business trust (the "Guarantor"), for the benefit of the Holders (as defined
herein) from time to time of the Common Securities (as defined herein) of CT
Convertible Trust I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to a Declaration of Trust (the "Declaration"), dated
as of July 28, 1998, among the trustees of the Issuer named therein, the
Guarantor, as sponsor, and the holders from time to time of undivided beneficial
interests in the assets of the Issuer, the Issuer is issuing on the date hereof
up to 4,650 common securities (the "Common Securities"), having an aggregate
stated liquidation amount of $4,650,000, designated the 8.25% Step Up
Convertible Trust Common Securities;
WHEREAS, as incentive for the Holders to purchase the Common
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Common Securities Guarantee, to pay to the Holders
of the Common Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein; and
WHEREAS, as of the date hereof, the Guarantor is also executing and
delivering a guarantee agreement (the "Preferred Securities Guarantee") in
substantially identical terms to this Common Securities Guarantee for the
benefit of the holders of the Preferred Securities (as defined herein), except
that if an Event of Default (as defined in the Indenture), has occurred and is
continuing, the rights of holders of the Common Securities to receive Guarantee
Payments under the Common Securities Guarantee are subordinated to the rights of
holders of Preferred Securities to receive guarantee payments under the
Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Common Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Common Securities Guarantee
for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions and Interpretation.
In this Common Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Common Securities Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) terms defined in the Declaration as at the date of execution of
this Common Securities Guarantee have the same meaning when used in this Common
Securities Guarantee unless otherwise defined in this Common Securities
Guarantee;
(c) a term defined anywhere in this Common Securities Guarantee has the
same meaning throughout;
(d) all references to "the Common Securities Guarantee" or "this Common
Securities Guarantee" are to this Common Securities Guarantee as modified,
supplemented or amended from time to time;
738639.2
<PAGE>
(e) all references in this Common Securities Guarantee to Articles and
Sections are to Articles and Sections of this Common Securities Guarantee,
unless otherwise specified; and
(f) a reference to the singular includes the plural and vice versa.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Common Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration) that are required to be paid on such Common Securities to
the extent the Issuer shall have funds available therefor, (ii) the redemption
price (the "Redemption Price") or Adjusted Redemption Price, specified in the
Indenture, as the case may be, and all accrued and unpaid Distributions to the
date of redemption, to the extent the Issuer has funds available therefor, with
respect to any Common Securities called for redemption by the Issuer, and (iii)
upon a voluntary or involuntary dissolution, winding-up or termination of the
Issuer (other than in connection with the redemption of all of the Common
Securities or the distribution of Debentures to the Holders in exchange for
Common Securities as provided in the Declaration), the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid Distributions on
the Common Securities to the date of payment, to the extent the Issuer shall
have funds available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders of Common Securities then
outstanding upon the liquidation of the Issuer (in either case, the "Liquidation
Distribution"). If an Event of Default (as defined in the Indenture) has
occurred and is continuing, the rights of holders of the Common Securities to
receive payments under the Common Securities Guarantee Agreement are
subordinated to the rights of Holders of Common Securities to receive Guarantee
Payments.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Common Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Common Securities have given
any request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor or any Affiliate of the Guarantor.
"Majority in liquidation amount of the Common Securities" means,
except as provided in the terms of the Common Securities, or except as provided
by the Trust Indenture Act, a vote by Holder(s), voting separately as a class,
of more than 50% of the liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all Common Securities.
"Preferred Securities" means the securities representing preferred
undivided beneficial interests in the assets of the Issuer.
ARTICLE II
GUARANTEE
SECTION 2.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of
set-off or counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
738639.2
2
<PAGE>
SECTION 2.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this Common
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right or remedy to require a proceeding
first against the Issuer or any other Person before proceeding directly against
the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 2.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor
under this Common Securities Guarantee shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Common Securities to be performed or
observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price or the Adjusted Redemption Price,
as the case may be, Liquidation Distribution or any other sums payable under the
terms of the Common Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the Common
Securities (other than an extension of time for payment of Distributions,
Redemption Price or the Adjusted Redemption Price, as the case may be,
Liquidation Distribution or other sum payable that results from the extension of
any interest payment period on the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Common Securities, or any
action on the part of the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Common
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 2.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 2.4. Rights of Holders.
Any Holder of Common Securities may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Common
Securities Guarantee, without first instituting a legal proceeding against the
Issuer or any other person or entity. The Guarantor waives any right or remedy
to require that any action be brought first against the Issuer or any other
person or entity before proceeding directly against the Guarantor.
738639.2
3
<PAGE>
SECTION 2.5. Guarantee of Payment.
This Common Securities Guarantee creates a guarantee of payment and not
of collection.
SECTION 2.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to such Holders by the
Guarantor under this Common Securities Guarantee; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any right that it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Common Securities Guarantee, if, at the time of
any such payment, any amounts are due and unpaid under this Common Securities
Guarantee. If any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay over such amount to the Holders.
SECTION 2.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Common
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Common
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 2.3 hereof.
ARTICLE III
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 3.1. Limitation of Transactions.
So long as any Common Securities remain outstanding, if (i) the
Guarantor has exercised its option to defer interest payments on the Debentures
by extending the interest payment period and such extension period, or any
extension thereof, shall be continuing, (ii) the Guarantor shall be in default
with respect to its Guarantee Payments or other obligations under this Common
Securities Guarantee or (iii) there shall have occurred and be continuing an
Event of Default under the Declaration or any event that, with the giving of
notice or lapse of time or both, would constitute an Event of Default under the
Declaration, then the Guarantor shall not (a) declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase, acquire, or make
any liquidation payment with respect to, any of its Capital Stock or (b) make
any payment of interest, principal or premium, if any, on or repay, repurchase
or redeem any debt securities of the Guarantor that rank pari passu with or
junior in interest to the Debentures or make any guarantee payment with respect
to any guarantee by the Guarantor of the debt securities of any subsidiary of
the Guarantor if such guarantee ranks pari passu with or junior in interest to
the Debentures (other than (i) as a result of a reclassification of the Capital
Stock of the Guarantor or the exchange or conversion of one class or series of
the Capital Stock of the Guarantor for another class or series of the Capital
Stock of the Guarantor, (ii) the purchase of fractional interests in shares of
the Capital Stock of the Guarantor pursuant to the conversion or exchange
provisions of such Capital Stock or the security being converted into or
exchanged for such Capital Stock, (iii) dividends or distributions in Common
Shares of the Guarantor, (iv) any declaration of a dividend in connection with
the implementation of a stockholders' rights plan, or the issuance of shares
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (v) payments under the Common Securities Guarantee and
Preferred Securities Guarantee, (vi) purchases of Common Shares of the Guarantor
related to the issuance of Common Shares of the Guarantor or rights under any of
the Guarantor's benefit plans for its directors, officers or employees and (vii)
obligations under any dividend reinvestment and stock purchase plans).
738639.2
4
<PAGE>
SECTION 3.2. Subordination.
This Common Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor (except any liabilities that
may be pari passu expressly by their terms), (ii) pari passu with the most
senior preferred or preference shares now or hereafter issued by the Guarantor
and with any guaranty now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any Affiliate of the Guarantor and (iii)
senior to the Guarantor's Common Shares.
ARTICLE IV
TERMINATION
SECTION 4.1. Termination.
This Common Securities Guarantee shall terminate upon (i) full payment
of the Redemption Price and accrued and unpaid distributions with respect to all
Common Securities, (ii) the distribution of the Common Shares to such Holder
upon the conversion of such Holder's Common Securities into the Common Shares,
(iii) the distribution of the Debentures to the Holders of the Common
Securities, or (iv) full payment of the amounts payable in accordance with the
Declaration upon liquidation of the Issuer. This Common Securities Guarantee
shall terminate completely upon full payment of the amounts payable in
accordance with the Declaration. Notwithstanding the foregoing, this Common
Securities Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder must restore payment of any sum paid
under the Common Securities or under this Common Securities Guarantee.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Successors and Assigns.
All guarantees and agreements contained in this Common Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Common Securities then outstanding. Except in connection with any merger
or consolidation of the Guarantor with or into another entity permitted by
Section 9.1 of the Indenture or any sale, transfer or lease of the Guarantor's
assets to another entity permitted by Section 9.1 of the Indenture, the
Guarantor may not assign its rights or delegate its obligations under this
Common Securities Guarantee without the prior approval of the holders of at
least a Majority in liquidation amount of the Common Securities then
outstanding.
SECTION 5.2. Amendments.
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Common Securities Guarantee may only be amended with the prior approval of the
Holders of at least a Majority in liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of the Common Securities then outstanding. The provisions of Section
12.2 of the Declaration with respect to meetings of Holders apply to the giving
of such approval.
738639.2
5
<PAGE>
SECTION 5.3. Notices.
All notices provided for in this Common Securities Guarantee shall be
in writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) If given to the Issuer, in care of the Regular Trustees at the
Issuer's mailing address set forth below (or such other address as the Issuer
may give notice of to the Holders of the Common Securities):
CT Convertible Trust I
Capital Trust
605 Third Avenue, 26th Floor
New York, NY 10016
Attention: Chief Financial Officer
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Common Securities):
Capital Trust
605 Third Avenue, 26th Floor
New York, NY 10016
Attention: Chief Financial Officer
(c) If given to any Holder of Common Securities, at the address set
forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 5.4. Benefit.
This Common Securities Guarantee is solely for the benefit of the
Holders of the Common Securities and is not separately transferable from the
Common Securities.
SECTION 5.5. Governing Law.
THIS COMMON SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
738639.2
6
<PAGE>
THIS COMMON SECURITIES GUARANTEE is executed as of the day and year
first above written.
CAPITAL TRUST, as Guarantor
By: /s/ John R. Klopp
---------------------------
Name: John R. Klopp
Title: Chief Executive Officer
738639.2
7
<PAGE>
EXHIBIT 10.1
CO-INVESTMENT AGREEMENT, dated as of July 28, 1998, among CAPITAL
TRUST, a California business trust, VORNADO REALTY L.P., a Delaware limited
partnership, EOP OPERATING LIMITED PARTNERSHIP, a Delaware limited partnership,
and GENERAL MOTORS INVESTMENT MANAGEMENT CORPORATION, a Delaware corporation, as
agent for and for the benefit of the Pension Plans (as defined herein).
Preliminary Statement
Capitalized terms used in this Agreement are defined in Section 1
hereof. The Company has requested that each of the Prospective Co-Investors
purchase $50,000,000 in aggregate liquidation amount of Securities pursuant to
the terms of the Securities Purchase Agreement. The Prospective Co-Investors are
willing to do so provided that the Company agrees with the Prospective
Co-Investors as provided herein. The Company is willing to agree with the
Prospective Co-Investors as provided herein. Accordingly, the parties hereto
agree as follows.
Agreement
Section 1. Definitions. The following terms have the indicated
meanings when used herein.
a. "Advance Notice" shall mean one or more oral or written
communications that provide notice to each of the
Prospective Co- Investors of a potential Target
Investment in advance of any formal offer to co-invest
with a Term Sheet pursuant to Section 4 hereof. The
Advance Notice shall contain as much information as
practicable with regard to the nature and prospective
terms and conditions of the co-investment and the
Target Investment.
b. "Affiliate" shall have the same meaning as given
to that term in Rule 405 under the Securities Act
of 1933, as amended, or any successor rule
thereunder.
c. "Agreement" shall mean this Co-Investment
Agreement, as amended, modified, or restated from
time to time.
d. "Blocked Party" shall have the meaning set forth
in Section 5(c) hereof.
e. "Business Day" shall mean any day other than a
Saturday, Sunday or any day on which banking
institutions in New York, New York are permitted
or required by applicable law to close.
732653.17
<PAGE>
f. "Change in Control" shall mean, with respect to any
person, (A) the acquisition after the date hereof by
any person (as such term is used in section 13(d) and
section 14(d)(2) of the Exchange Act, as in effect on
the date hereof) or related persons constituting a
group (as such term is used in Rule 13d-5 under the
Exchange Act as in effect on the date hereof) of (i)
the power to elect, appoint or cause the election or
appointment of at least a majority of the members of
the board of directors or trustees of such person,
through beneficial ownership of the voting securities
of the person or otherwise, or (ii) all or
substantially all of the properties and assets of such
person or (B) the merger or consolidation of such
person with or into another person upon the
consummation of which a majority of the board of
directors or trustees of the successor shall not be
comprised of individuals serving on the board of
directors or trustees of such person immediately prior
to consummation of the merger or consolidation.
g. "Code" shall mean the Internal Revenue Code of
1986, as amended.
h. "Co-Investment Amount" with respect to any Target
Investment shall mean the aggregate dollar amount
of co-investment in such Target Investment offered
by the Company as set forth on the Term Sheet with
respect to such Target Investment.
i. "Co-Investment Right" shall have the meaning set
forth in Section 4 hereof.
j. "Company" shall mean Capital Trust, a California
business trust.
k. "Debentures" shall mean the 8.25% Step Up
Convertible Junior Subordinated Debentures issued
pursuant to that certain Indenture, dated as of
July 28, 1998, between the Company and Wilmington
Trust Company that may be distributed to holders
of Securities upon liquidation of the Trust.
l. "Definitive Participation Agreement" shall mean the
definitive participation, joint venture or other
agreement which shall be prepared by the Company
governing the rights and obligations of the Company,
any Participating Co-Investor and any other co-
investor with respect to the participation of
co-investors in any Target Investment on terms and
conditions substantially the same as set forth on the
Term Sheet which shall be substantially in the form
attached hereto as Exhibit A.
732653.17
2
<PAGE>
m. "Due Diligence Information" shall have the meaning
set forth in Section 3 hereof.
n. "Due Diligence Period" shall mean a period of
eight Business Days following the later of the
date of receipt by the Prospective Co-Investors of
substantially all of the Due Diligence Information
or the Initial Decision Date, during which due
diligence of a Target Investment shall be
completed.
o. "Election" shall have the meaning set forth in Section
4(c) hereof.
p. "EOP" shall mean Equity Office Properties Trust, a
Maryland real estate investment trust.
q. "EOPLP" shall mean EOP Operating Limited
Partnership, an Illinois limited partnership.
r. "EOPLP Entity" shall have the meaning set forth in
Section 7(b).
s. "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
t. "GMIM" shall mean General Motors Investment Management
Corporation, a Delaware corporation, as agent for and
for the benefit of the Pension Plans.
u. "GMIM Entity" shall have the meaning set forth in
Section 7(c).
v. "Indication of Interest" shall mean one or more
oral or written communications that indicate the
level of interest, if any, with regard to making a
co-investment in a Target Investment that is the
subject of Advance Notice.
w. "Initial Decision Date" with respect to any Target
Investment shall mean the date two Business Days after
the Company shall have provided the Prospective
Co-Investor with a Term Sheet; provided however, that
the Initial Decision Date shall be three Business Days
after receipt of a Term Sheet if the Prospective
Co-Investor receives the Term Sheet after 4:30 p.m. New
York City time on the date of receipt.
x. "Investment Basis Amount" shall mean an amount
equal to the total liquidation value of Securities
purchased by a Prospective
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Co-Investor pursuant to the Securities Purchase
Agreement, or, if Debentures have been distributed
in respect thereof, the total principal amount of
the Debentures, or if any of such Securities or
Debentures, as the case may be, have been
converted into Underlying Common Shares, an amount
equal to the sum of the total liquidation value of
Securities or total principal amount of
Debentures, as the case may be, that have not been
so converted and the total Conversion Value (as
defined below) of the Underlying Common Shares.
For purposes of the foregoing, the term Conversion
Value shall mean the liquidation value or
principal amount of Securities or Debentures, as
the case may be, converted into Underlying Common
Shares.
y. "Participating Co-Investor" shall have the meaning
set forth in paragraph c. of Section 4 hereof.
z. "Pension Plans" shall mean one or more employee
benefit plans sponsored by General Motors
Corporation for the benefit of its employees or
the employees of its Affiliates.
aa. "Prospective Co-Investors" shall mean VRLP, EOPLP and
GMIM.
bb. "Registration Rights Agreement" shall mean the
Registration Rights Agreement, dated as of the date
hereof, among the Company, VRLP, EOPLP and certain of
the Pension Plans.
cc. "REIT Participating Co-Investor" shall mean either or
both of VRLP and EOPLP as a Participating Co-Investor
who shall have made an Election in accordance with
Section 4.
dd. "Securities" shall mean the 8.25% Step Up Convertible
Trust Preferred Securities representing undivided
beneficial interests in the assets of the Trust.
ee. "Securities Purchase Agreement" shall mean the
Preferred Securities Purchase Agreement, dated as of
the date hereof, among the Company, the Trust, VRLP,
EOPLP and certain of the Pension Plans.
ff. "Target Investment" shall mean any loan or other
investment (i.e., a commercial real estate
financial asset other than a loan), the
opportunity for which develops on or after the
date hereof, with respect to which the Company has
purchased or has made or intends to make a
commitment or offer to purchase and for which
732653.17
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<PAGE>
the Company has determined to obtain co-investors
to originate and fund or acquire all or any
portion of the loan or other investment.
gg. "Tax-Exempt Participating Co-Investor" shall mean any
Pension Plan which shall have made an Election in
accordance with Section 4.
hh. "Term Sheet" with respect to any Target Investment
shall mean a written summary of terms that describes
such Target Investment, including the proposed terms
and conditions thereof, and the proposed terms and
conditions of the co-investment, including without
limitation, the principal amount and nature of the
loan or the aggregate amount of the investment, the
maturity date, in the case of a loan, the name and a
brief description of the borrower or target of the
investment, the aggregate investment amount, the Co-
Investment Amount, the pro-rata share, the rate of
interest to be paid to the Company and to each of the
Prospective Co-Investors on such loan and a
description of the form of security for such loan, in
the case of the loan, in reasonable detail in the
usual and customary form, it being represented by the
Company that the Company's term sheet presented to
counter parties customarily provides for customary due
diligence termination provisions.
ii. "Trust" shall mean CT Convertible Trust I, a Delaware
statutory business trust.
jj. "Underlying Common Shares" means the class A common
shares of the Company issuable upon conversion of the
Securities or the Debentures.
kk. "VRLP" shall mean Vornado Realty L.P., a Delaware
limited partnership.
ll. "VNO" shall mean Vornado Realty Trust, a Maryland real
estate investment trust.
mm. "VRLP Entity" shall have the meaning set forth in
Section 7(a) hereof.
Section 2. No Obligation. The Company shall have complete discretion in
determining whether to obtain co-investors for any investment and shall be under
no obligation to offer any particular investment opportunity to the Prospective
Co-Investors except as set forth in this Agreement. The Prospective Co-Investors
shall have no right
732653.17
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<PAGE>
to co-invest in any investment made by the Company unless and until the Company
has determined in its sole and absolute discretion to obtain co-investors for
such investment and any right to co-invest enjoyed by the Prospective
Co-Investors shall be limited to the rights set forth in this Agreement.
Section 3. Preliminary Indication. In advance of any formal offer to
co-invest in a Target Investment with a Term Sheet pursuant to Section 4 hereof,
the Company shall use best efforts to provide the Prospective Co-Investors with
Advance Notice and, upon receipt of such notice, the Prospective Co-Investors
shall use best efforts to provide, as soon as practicable, an Indication of
Interest. Following the receipt of an Indication of Interest confirming an
interest in making a co-investment in a Target Investment, the Company shall
provide to the Prospective Co-Investor, as soon as practicable, copies of all
due diligence reports, financial, underwriting and market information, credit
files and any other information relating to the Target Investment prepared or
obtained by and in the possession of the Company (collectively "Due Diligence
Information") as reasonably requested by the Prospective Co-Investor.
Irrespective of whether the Company receives from a Prospective Co-Investor an
Indication of Interest in response to any Advance Notice provided by the
Company, the Company shall make a formal offer to each Prospective Co- Investor
with a Term Sheet pursuant to Section 4 hereof.
Section 4. Co-Investment Right. The Prospective Co-Investors shall have
the right to co-invest in loans and other investments to be entered into or made
or previously entered into or made by the Company, directly or indirectly
through any entity, upon the following terms and conditions (the "Co-Investment
Right"). If the Company determines in its sole and absolute discretion to obtain
co-investors for any Target Investment, the Company shall first offer the
opportunity to co-invest in the Target Investment to the Prospective
Co-Investors (which offer shall be made upon the same terms to each of the
Prospective Co-Investors) as follows:
a. The Company shall provide each of the Prospective
Co-Investors with the Term Sheet which shall serve
as an irrevocable offer by the Company to the
Prospective Co-Investors to co-invest in the
Target Investment on the terms and conditions set
forth in such Term Sheet.
b. If prior to 5:00 p.m. New York City time on the
Initial Decision Date, any Prospective Co-Investor
shall not have advised the Company in writing that
it elects to co-invest in the Target Investment,
any such Prospective Co-Investor shall be deemed
to have waived its right to co-invest in such
Target Investment, and, if all Prospective
Co-Investors entitled to the right to co-invest
hereunder shall have waived their right to
co-invest in accordance with the foregoing, the
Company shall thereafter be free without
restriction under this Section 4 to obtain
alternative co-investors as it determines in its
732653.17
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<PAGE>
complete discretion, provided however, if the
Company determines to offer a co-investment in
such Target Investment to alternative co-investors
on materially more favorable terms and conditions,
the Company must first offer the Prospective
Co-Investors the opportunity to co-invest on such
terms and conditions by means of a revised Term
Sheet incorporating such terms and conditions.
Such offer shall be made in accordance with, and
shall be governed by, the provisions of this
Section 4.
c. Each Prospective Co-Investor may individually
elect to co-invest in the Target Investment by
providing written notice to the Company of such
election (each such notice, an "Election") prior
to 5:00 p.m. New York City time on the Initial
Decision Date and confirming such Election in
writing prior to 5:00 p.m. New York City time on
the last Business Day of the Due Diligence Period
(a Prospective Co-Investor who delivers an
Election and confirms such Election is hereinafter
referred to as a "Participating Co- Investor"). If
a Prospective Co-Investor shall have failed in its
sole and absolute discretion to confirm its
Election in accordance with the foregoing, such
Prospective Co-Investor shall be deemed to have
waived its right to co-invest in such Target
Investment (but not in any other Target
Investment). Upon delivery to the Company of its
written confirmation of the Election, unless
otherwise agreed in writing by the Company, the
Participating Co- Investor shall be deemed to have
accepted the offer to co-invest its pro rata share
of the Co-Investment Amount on the terms and
conditions set forth on the Term Sheet and the
parties thereafter shall proceed as follows:
i. The Company shall in good faith use
reasonable commercial efforts to secure
for each Participating Co- Investor the
opportunity to co-invest in the Target
Investment on terms and conditions
substantially the same as set forth in
the Term Sheet. Notwithstanding the
foregoing, each Participating Co-Investor
shall have the sole and absolute right to
terminate without penalty any Election
and confirmation thereof or other
agreement to co- invest in such Target
Investment (each Participating Co-
Investor who shall exercise such right
shall no longer be considered a
Participating Co-Investor with respect to
such Target Investment) if (i) there are
one or more changes that individually or
in the aggregate constitute a material
change in the terms and conditions as set
forth on the Term Sheet or the REIT
Suitable Investment (as defined below) or
Non-
732653.17
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<PAGE>
UBTI Investment (as defined below)
status of the Target Investment based on
information contained on or omitted from
the Term Sheet (a change altering an
investment from a REIT Suitable
Investment to an investment that is not a
REIT Suitable Investment or a change
altering an investment from a Non-UBTI
Investment to an investment that is not a
Non-UBTI Investment shall constitute a
material change), or (ii) the Company
shall not have consummated the Target
Investment within 120 days after date of
confirmation of its Election.
ii. Notwithstanding the agreement of a
Participating Co- Investor to co-invest
in a Target Investment upon delivery and
confirmation of an Election pursuant to
the foregoing provisions of this Section
4, the Company shall have the exclusive
right to negotiate the terms and
conditions of such Target Investment with
the counter-party borrower or seller of
such Target Investment. The Company shall
also promptly provide the Participating
Co-Investor with copies of all Due
Diligence Information not previously
provided in accordance with Section 3
hereof.
iii. To the extent commercially practicable
without causing any detriment or
prejudice to the Company's ability to
consummate any Target Investment on
substantially the same economic terms set
forth in the Term Sheet with respect
thereto, (a) upon request of any REIT
Participating Co-Investor, the Company
shall undertake to negotiate with the
counter-party borrower or seller a
structure for the Target Investment (i)
that is in a format suitable for
investment by such REIT Participating
Co-Investor in terms of compliance with
the asset and gross income qualification
requirements for real estate investment
trusts under the Code and (ii) which
avoids excess inclusion income (under
Section 860E of the Code) for REIT
Participating Co- Investors (a Target
Investment meeting the requirements of
both of the immediately foregoing clauses
(i) or (ii), a "REIT Suitable
Investment"), and (b) upon request of any
Tax- Exempt Participating Co-Investor (as
herein defined), the Company shall
undertake to negotiate with the counter-
party borrower or seller a structure for
the Target Investment that does not
result in unrelated business taxable
income for the Tax-Exempt Participating
Co-
732653.17
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<PAGE>
Investor (a Target Investment meeting
the requirements of the foregoing clause,
a "Non-UBTI Investment").
iv. Subject to the terms and conditions of
this Agreement, the Participating
Co-Investor shall in good faith use
reasonable commercial efforts to execute
and deliver, or cause to be executed and
delivered, the Definitive Participation
Agreement with respect to the Target
Investment and any related definitive
documentation necessary to consummate the
co-investment governed thereby no later
than the closing of the underlying Target
Investment transaction, and after
execution and delivery of the foregoing
definitive documentation, to take all
actions as may be reasonably necessary to
consummate the transactions governed
thereby.
d. Unless otherwise agreed in writing among the
Prospective Co- Investors, the Prospective
Co-Investors shall be entitled to co- invest a pro
rata share of the Co-Investment Amount set forth
on the Term Sheet. If any Prospective Co-Investor
shall have failed to deliver and confirm an
Election or otherwise elected not to co- invest
and shall thereby have waived its right to
co-invest in accordance with paragraphs b. or c.
of this Section 4, the Company may in its sole and
absolute discretion offer to the Participating
Co-Investors (on a pro rata basis if there is more
than one other Participating Co-Investor), the
opportunity to co-invest an additional portion of
the Co-Investment Amount set forth on the Term
Sheet on the terms set forth in the Term Sheet,
such additional amount to be determined by the
Company in its sole and absolute discretion. Each
Participating Co-Investor may individually elect
to co-invest such additional portion of the Co-
Investment Amount by providing written notice to
the Company of such election prior to 5:00 p.m. on
the second Business Day following the date written
notification of the offer pursuant to paragraph d.
of this Section 4 by the Company is delivered to
such Participating Co-Investor (or, if later, 5:00
p.m. on the last Business Day of the Due Diligence
Period). Upon delivery to the Company of its
written election to co-invest such additional
portion of the Co-Investment Amount, each such
Participating Co-Investor shall be deemed to have
accepted the Company's offer to co-invest such
portion of the Co-Investment Amount on terms and
conditions set forth on the Term Sheet and the
parties thereafter shall proceed as set forth in
subparagraphs i. through iv. of paragraph c. of
this Section 4.
732653.17
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<PAGE>
Section 5. Certain Agreements, Acknowledgments and Representations. The
parties acknowledge and agree as follows:
a. The Company acknowledges and agrees that the
Prospective Co- Investors would not have entered
into the Securities Purchase Agreement without the
Company having entered into this Agreement.
b. Each Prospective Co-investor acknowledges and
agrees, severally and not jointly, that the
Company is entitled to rely on any agreement made
by such Prospective Co-Investor to co-invest in a
Target Investment pursuant to the provisions of
paragraph c. or paragraph d. of Section 4 hereof
and that, if such Prospective Co- Investor shall
have breached its obligations under subparagraph
iv. of paragraph c. of Section 4 hereof, any such
Prospective Co-Investor shall indemnify and hold
harmless the Company for any actual out-of-pocket
losses incurred as a result of such breach. The
Company shall indemnify and hold each of the
Prospective Co-Investors harmless from and against
any and all losses, arising, directly or
indirectly, from any willful misconduct, gross
negligence or fraud by the Company in connection
with this Agreement, any Definitive Participation
Agreement or any co- investment in a Target
Investment under this Agreement. Each of the
Prospective Co-Investors, severally and not
jointly, shall indemnify and hold the Company
harmless from and against any and all losses,
arising, directly or indirectly, from any willful
misconduct, gross negligence or fraud by such
Prospective Co- Investor in connection with this
Agreement, any Definitive Participation Agreement
or any co-investment in a Target Investment under
this Agreement.
c. Notwithstanding any of the terms and provisions of
this Agreement to the contrary, the Prospective
Co-Investors acknowledge and agree that, if, after
the Company shall have in good faith used
reasonable commercial efforts to overcome an
Objection (as defined herein), the counter-party
borrower or seller of any particular investment
for which the Company has determined to obtain
co-investors objects (an "Objection") to the
participation of any Prospective Co-Investor as a
co-investor in such investment (a "Blocked
Party"), the validity of such Objection to be
determined in the sole and absolute good faith
discretion of the Company, the Company shall not
be obligated to offer the opportunity to co-
invest in such investment to any such Blocked
Party, in which case
732653.17
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<PAGE>
any offer made pursuant to Section 4 hereof shall
be made solely to the other Prospective
Co-Investors, provided that, the objecting
counter-party shall not have objected to the
participation of such other Prospective
Co-Investor as a co-investor, in which case no
offer need be made pursuant to Section 4 hereof;
provided further that, if the Company is not
obligated to offer an opportunity to co-invest to
any Blocked Party in accordance with the
foregoing, no other Prospective Co-Investor(s)
(other than GMIM (assuming GMIM is not a Blocked
Party)) shall be entitled to participate in a
Target Investment unless the Blocked Party or
Parties consent(s) in writing to the participation
of such other Prospective Co- Investor(s) in such
Target Investment. The Company shall provide
written notice of any Objection to all Prospective
Co-Investors as soon as practicable after the
Company learns of such Objection.
d. Each Prospective Co-Investor acknowledges and
agrees, severally and not jointly, that except
pursuant to the provisions of Section 4 hereof,
such Prospective Co-Investor and its Affiliates
shall not, without the Company's prior written
consent, acquire an interest for its own account
in any loan or other investment that was the
subject of an Advance Notice or a Term Sheet that
was initially presented to such Prospective
Co-Investor pursuant to the provisions of Section
4 hereof; provided, however, the foregoing
restriction shall not apply to any acquisition by
an enterprise in which any such Prospective
Co-Investor owns an interest but over which it
does not possess or exercise any discretionary
investment power; provided further the foregoing
restriction shall terminate upon the earlier of
(i) the declaration by the Company that it has
terminated all negotiations toward consummation of
the loan or investment, (ii) the Company's receipt
of notice that the counter-party has terminated
negotiations with the Company toward consummation
of the loan or investment, or (iii) 90 days
following the date the Term Sheet was provided to
the Prospective Co-Investors, except in the case
of clause (ii) the restrictions shall not
terminate if the principal reason for the
counter-party's termination of negotiations is due
to the receipt of an offer with more favorable
terms directly or indirectly from such Prospective
Co-Investor; provided further that a Prospective
Co-Investor may acquire such interest in any loan
or other investment for which it or its Affiliates
had independently identified and considered for
investment prior to receipt of Advance Notice
pursuant to Section 3 hereof or a Term Sheet
concerning such loan interest or investment; and
provided further that the Prospective Co-Investor
will promptly notify the Company of such prior
identification and consideration
732653.17
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<PAGE>
after the earlier of the receipt of Advance Notice
pursuant to Section 3 hereof or a related Term
Sheet. The Company shall promptly notify the
Prospective Co-Investors of any termination of
negotiations by the Company or the counter-party
borrower or seller. For purposes of this paragraph
(d) of Section 5, the term "Affiliate" (A) when
used with respect to EOPLP, shall exclude (i) any
person or entity having securities that are listed
on a national securities exchange or traded in the
national over-the-counter market (a "Public
Company"), (ii) any subsidiary, direct or
indirect, of a Public Company, (iii) any person or
entity any part of whose equity or other ownership
interests (or any rights to acquire the same) are
owned, directly or indirectly, beneficially or of
record by any person or entity in addition to
Equity Group Investments, Inc. ("EGI"), or (iv)
any person or entity that owns, directly or
indirectly, beneficially or of record, any equity
or other ownership interests in EGI or any wholly
owned subsidiary, direct or indirect, of EGI and
(B) when used with respect to VRLP, shall exclude
(i) any Public Company, (ii) any subsidiary,
direct or indirect, of a Public Company.
e. Each Prospective Co-Investor and the Company
acknowledges and agrees that the rights and
obligations of any Participating Co- Investor,
respectively, with respect to participation in any
Target Investment shall be governed by the
Definitive Participation Agreement with respect
thereto, and only the execution and delivery of
such Definitive Participation Agreement by the
parties thereto shall constitute and give rise to
a legally binding and enforceable agreement of the
Participating Co-Investor and the Company in
respect of the Target Investment.
f. Each Prospective Co-Investor, severally and not
jointly, acknowledges and agrees that, in
connection with any Target Investment in which it
shall co-invest, it shall undertake its own
independent investigation and evaluation of the
Target Investment and it shall not rely on any
investigation or evaluation undertaken by the
Company or any other Prospective Co-Investor, it
being further acknowledged and agreed by each
Prospective Co-Investor that neither the Company
nor any other Prospective Co-Investor makes any
representation or warranty with respect to the
suitability or fitness of any Target Investment.
Each Prospective Co-Investor, severally and not
jointly, represents and warrants that it is a
sophisticated investor that has such knowledge and
experience in financial and business matters and
that it is capable of evaluating
732653.17
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<PAGE>
the merits and risks of a co-investment in any
prospective Target Investment.
g. At any time following the receipt of an Indication
of Interest or confirmation of an Election, the
Company shall use commercially reasonable efforts
to respond to due diligence related inquiries made
by any Prospective Co-Investor who shall have
provided such Indication of Interest or confirmed
such Election and allow such party to participate
in any property inspections or tours.
h. The parties hereto acknowledge and agree that
nothing contained in this Agreement shall be
considered to create the relationship of principal
and agent or of partners or joint venturers and
that no party shall have the authority to bind any
other party hereto or have any fiduciary duty to
any other party under this Agreement.
i. Notwithstanding any of the terms and provisions of
this Agreement to the contrary, each Prospective
Co-Investor shall have the right to co-invest in
loans and other investments on the same economic
terms and conditions (including, without
limitation, the same interest rate and the same
share of fees) that the Company has obtained or
will obtain from the counter-party borrower or
seller and the Company shall set forth such same
terms and conditions in the applicable Term Sheet;
provided, however, that no Prospective co-Investor
shall be required, unless it otherwise agrees, to
reimburse the Company for any costs or expenses
that the Company has incurred or will incur in
connection with the negotiation, documentation or
consummation of such loan or other investment;
provided, further, that this paragraph i of
Section 5 shall not apply to any proposed or
consummated Target Investment (i) with respect to
all Prospective Co-Investors, if the Company
consummated such Target Investment that is the
subject of a Term Sheet more than 90 days prior to
the date the Company first provides any
Prospective Co-Investor with Advance Notice of
such Target Investment or (ii) with respect to an
Uninterested Prospective Co-Investor (as defined
herein). For purposes of the foregoing, the term
"Uninterested Prospective Co-Investor" means any
Prospective Co-Investor who has failed to make and
confirm an Election pursuant to Section 4
following the receipt of a Formal Offer.
Section 6. Termination of Co-Investment Right. The Co-Investment Right
of any Prospective Co-Investor (or assignee pursuant to Section 8 hereof) shall
continue until terminated and shall terminate upon the earlier of:
732653.17
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<PAGE>
a. the date upon which such Prospective Co-Investor
shall have, in one or more transactions, disposed
of Securities, Debentures and Underlying Common
Shares in the aggregate representing more than 50%
of its Investment Basis Amount; provided that the
transfer of Securities, Debentures or Underlying
Common Shares to Affiliates of any such
Prospective Co-Investor shall not be deemed to be
a disposition;
b. the date upon which such Prospective Co-Investor
shall have breached its obligations under
subparagraph iv. of paragraph c. of Section 4
hereof;
c. the date upon which such Prospective Co-Investor
shall have materially breached or defaulted upon
the provisions of any Definitive Participation
Agreement and such breach shall not have been
cured within ten Business Days of receipt by the
breaching Prospective Co-Investor of written
notice of such breach;
d. the date upon which a Change in Control shall have
occurred with respect to such Prospective
Co-Investor (other than GMIM); or
e. the date upon which such Prospective Co-Investor
shall have materially breached or defaulted upon
the provisions of the Securities Purchase
Agreement or the Registration Rights
Agreement;
provided, however, that any such termination shall have no effect on the rights
and obligations of the Company and the terminated Prospective Co-Investor with
respect to any agreement made by such terminated Prospective Co-Investor to
co-invest in a Target Investment pursuant to the provisions of paragraph c. or
paragraph d. of Section 4 hereof.
Section 7. Investment Through, or Transfers to, Certain Entities.
a. VRLP, in or after electing to co-invest in a
Target Investment, shall have the absolute right
to make or hold such investment either directly or
through any entity in which VRLP holds, directly
or indirectly, an economic interest of greater
than 50% (any such entity, a "VRLP Entity"). In
addition, VRLP shall have the right, in electing
to co-invest in a Target Investment, to transfer
its right to invest in such Target Investment to
Vornado Operating Inc. or any Affiliate or
subsidiary of Vornado Operating Inc. In addition,
VRLP and each VRLP Entity shall have the right to
transfer all or a portion of its interest in any
Target Investment to VRLP or any other VRLP
Entity.
732653.17
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<PAGE>
b. EOPLP, in or after electing to co-invest in a
Target Investment, shall have the absolute right
to make or hold such investment either directly or
through any entity in which EOPLP holds, directly
or indirectly, an economic interest of greater
than 50% (each such entity, a "EOPLP Entity"). In
addition, EOPLP shall have the right to, in
electing to co-invest in a Target Investment, to
transfer its right to invest in such Target
Co-Investment to any EOP sponsored "Paper Clip"
enterprise or any Affiliate or subsidiary thereof.
In addition, EOPLP and each EOPLP Entity shall
have the right to transfer all or a portion of its
interests in any Target Investment to EOPLP or any
other EOPLP Entity.
c. GMIM, in or after electing to co-invest in a
Target Investment, shall have the absolute right
to make or hold such investment either directly or
through any entity in which GMIM holds, directly
or indirectly, an economic interest of greater
than 50% (each such entity, a "GMIM Entity"). In
addition, GMIM and each GMIM Entity shall have the
right to transfer all or a portion of its
interests in any Target Investment to GMIM or any
other GMIM Entity.
Section 8. Assignment. This Agreement, and any rights and obligations
hereunder, may not be assigned in whole or in part by any party hereto without
the prior written consent of all of the other parties hereto other than, in the
case of the Prospective Co-Investors, to one or more Affiliates of the assigning
party. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto, their successors in interest and permitted assigns.
Section 9. Notices. All notices or other communications under this
Agreement shall be sufficient if in writing and delivered by hand or sent by
telecopy and shall be deemed given when so delivered by hand or telecopied to
the parties at the following addresses:
a. if to VRLP, to:
Vornado Realty L.P.
c/o Vornado Realty Trust
Park 80 West, Plaza II
Saddle Brook, New Jersey 07663
Attention: Wendy Silverstein
Facsimile: (201) 587-0600
732653.17
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<PAGE>
b. If to EOPLP, to:
EOP Operating Limited Partnership
Two North Riverside Plaza
Chicago, Illinois 60606
Attention to each of: Stanley M. Stevens
Richard D. Kincaid
Facsimile: (312) 559-5009
c. If to GMIM, to:
General Motors Investment Management Corporation
767 Fifth Avenue
New York, New York 10004
Attention: Jamie Behar
Facsimile: (212) 418-3651
d. if to the Company, to:
Capital Trust
605 Third Avenue,
26th Floor,
New York, New York 10016,
Attention: John R. Klopp
Facsimile: (212) 655-0044
or at such other address as the addressee may have furnished in writing to the
sender as provided herein.
Section 10. Entire Agreement. This Agreement constitutes the entire
understanding of the parties relating to the subject matter hereof and
supersedes all prior agreements and understandings, whether oral or written,
with regard thereto. No amendment or modification of the terms of this Agreement
shall be binding or effective unless expressed in writing and signed by each
party.
Section 11. No Waiver. The waiver by any party of the breach of any of
the terms and conditions of, or any right under, this Agreement shall not be
deemed to constitute the waiver of any other breach of the same or any other
term or condition or of any similar right. No such waiver shall be binding or
effective unless expressed in writing and signed by the party giving such
waiver.
Section 12. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements
732653.17
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executed and to be fully performed in such State, without regard to its
principles of conflicts of law.
Section 13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
Section 14. Construction. The section headings contained in this
Agreement are inserted for reference purposes only and shall not affect the
meaning or interpretation of this agreement.
Section 15. Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled by
arbitration administered by the American Arbitration Association in accordance
with its Commercial Arbitration Rules and Title 9 of the U.S. Code. Judgment on
the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.
The number of arbitrators shall be three, one of whom shall be
appointed by the Company, one of whom shall be appointed by the other party to
the claim or controversy (or if more than one such party, jointly by such other
parties) and the third of whom shall be selected by mutual agreement, if
possible, within 30 days of the selection of the second arbitrator and
thereafter by the American Arbitration Association and the place of arbitration
shall be New York, New York.
The arbitrators will have no authority to award punitive
damages or any other damages not measured by the prevailing party's actual
damages, and may not, in any event, make any ruling, finding or award that does
not conform to the terms of this Agreement.
Either party may make an application to the arbitrators
seeking injunctive relief to maintain the status quo until such time as the
arbitration award is rendered or the controversy is otherwise resolved. For
purposes of the foregoing, the term "status quo" shall mean with respect to a
Prospective Co-Investor, the continued enjoyment of its Co- Investment Right
conferred hereunder with respect to future Target Investments following the
development of a controversy as to the Company's right to terminate such Co-
Investment Right pursuant to the terms of Section 6.
732653.17
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<PAGE>
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be signed on its behalf as of the date first above written.
CAPITAL TRUST
By: /S/ John R. Klopp
-----------------------------------------
Name: John R. Klopp
Title: Chief Executive Officer
VORNADO REALTY L.P.
By: Vornado Realty Trust, its general partner
By: /s/ Michael D. Fascitelli
----------------------------------
Name: Michael D. Fascitelli
Title: President
EOP OPERATING LIMITED PARTNERSHIP
By: Equity Office Properties Trust, its general
partner
By: /s/ Debra L. Ferruzzi
----------------------------------
Name: Debra L. Ferruzzi
Title: Senior Vice President
GENERAL MOTORS INVESTMENT
MANAGEMENT CORPORATION
By: /s/ Thomas Dobrowski
-----------------------------------------
Name: Thomas Dobrowski
Title: Managing Director
732653.17
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<PAGE>
EXHIBIT A
PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT (this "Agreement") made as of the
____ day of __________ among CAPITAL TRUST, a California business trust (the
"Lender"), having an office at 605 Third Avenue, New York, New York 10016, and
***[VORNADO REALTY L.P., a Delaware limited partnership ("VRLP") having an
address c/o Vornado Realty Trust, Park 80 West, Plaza II, Saddle Brook, New
Jersey 07663]*** ***[EOP OPERATING LIMITED PARTNERSHIP, a Delaware limited
partnership ("EOPLP") having an address at Two North Riverside Plaza, Chicago,
Illinois 60606]*** [and] ***[GENERAL MOTORS INVESTMENT MANAGEMENT CORPORATION, a
Delaware corporation, as agent for one or more employee benefit plans
(collectively, the "GM Pension Plans") sponsored by the General Motors
Corporation for the benefit of its employees or the employees of its affiliates
("GMIM"), having an address at 767 Fifth Avenue, New York, New York 10004]***
([VRLP], [EOPLP] and [GMIM], collectively, the "Co-Investing Participants"; each
a "Co-Investing Participant").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and delivery of
this Agreement, the Lender is making a loan in the ***[maximum]*** principal
amount of $__________ (the "Loan") to ____________, a ________ ________ [type of
entity] (the "Borrower"), with respect to the Premises (as defined in Exhibit A
attached hereto and made a part hereof; all capitalized terms used and not
otherwise defined in this Agreement having the respective meanings given to such
terms in Exhibit A) and the Improvements located thereon, which Loan is
evidenced by the Note and is secured by, inter alia, the Mortgage1 and the other
Security Documents;
***[WHEREAS, the full $__________ of the Loan is being
advanced by the Lender to the Borrower]***; and
WHEREAS, the Lender desires to sell and assign to the
Co-Investing Participants, and the Co-Investing Participants desire to purchase
from the Lender, undivided
- --------
1 Note: This Agreement to be modified appropriately for non-mortgage loans.
736730.10
<PAGE>
participation interests in the outstanding principal balance of the Loan on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the Lender and the Co-Investing Participants mutually agree as
follows:
1. Purchase of Undivided Interests. As of the date hereof, the
Lender shall sell and assign to each Co-Investing Participant, and each
Co-Investing Participant shall purchase and assume from the Lender, a respective
undivided participation interest in the outstanding principal balance of the
Loan and the Loan Documents, in the amount and percentage and otherwise in
accordance with the terms and provisions set forth with respect to such Co-
Investing Participant on Exhibit B attached hereto and made a part hereof, and
the Lender shall, subject to the provisions of paragraph 9 of this Agreement,
retain an undivided interest in the outstanding principal balance of the Loan
and the Loan Documents in the amount and percentage and otherwise in accordance
with the terms and provisions set forth with respect to Lender on Exhibit B. As
of the date hereof, each Co-Investing Participant shall transfer to the Lender
by Federal funds wire or in other immediately available New York City funds in
United States dollars an amount equal to its respective undivided interest in
the outstanding principal balance of the Loan as set forth on Exhibit B.
2. Obligations of the Lender. The Lender shall, in its
capacity as lead lender and servicer and until each Co-Investing Participant's
undivided interest in the Loan has been paid in full, (i) hold the Loan
Documents and the collateral for the Loan for the benefit of itself and the
Co-Investing Participants (it being understood and agreed that each party to
this Agreement shall be deemed to have an interest therein in proportion to its
undivided interest in the Loan), (ii) receive all payments in respect of
interest, principal and other sums on account of or with respect to the Loan,
(iii) promptly remit to each Co-Investing Participant its pro rata share of
interest, principal and other sums received by the Lender on account of or with
respect to the Loan in accordance with the provisions of this Agreement by wire
or ACH transfer in immediately available funds pursuant to the respective wiring
or ACH instructions delivered in connection with each Co-Investing Participant's
acquisition of its interest in the Loan (as such instructions may be modified in
writing from time to time by such Co-Investing Participant), and (iv) use due
diligence to recover from the Borrower all expenses incurred which are
reimbursable from the Borrower and promptly remit to each Co-Investing
Participant its pro rata share thereof. Except as specifically provided to the
contrary in Exhibit B to this Agreement and except in the case of amounts
payable by the Borrower pursuant to the provisions of the Loan Documents
regarding reserve requirements and capital adequacy, the Lender's and the
Co-Investing Participants' respective shares of principal, interest and other
sums (if any) actually received by the Lender on account of or with respect to
the Loan shall be calculated on the basis of the Lender's and the Co-Investing
Participants' respective undivided percentage interests in the Loan from time to
time. In addition, (a) not less frequently than once per month, the Lender shall
provide to each Co-Investing Participant a periodic loan status report, either
prepared by the Lender or obtained by the Lender from Midland Loan
736730.10
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Services, Inc. or any other loan servicer which may be unanimously agreed upon
in writing by the parties to this Agreement (Midland Loan Services, Inc. or such
other servicer, the "Loan Servicer"), which loan status report shall include
without limitation a record of any and all loan payments and other activity, and
(b) upon request, the Lender shall promptly furnish any Co-Investing Participant
with such information or documentation regarding the Loan as may be reasonably
required by such Co-Investing Participant for tax or regulatory compliance, in
connection with any internal audit requirements applicable to such Co-Investing
Participant or for similar purposes, provided in each case that the information
or documentation requested is within the possession of the Lender or the Loan
Servicer. Except as specifically provided to the contrary in paragraph 4 of this
Agreement, the Lender shall not without the prior unanimous written consent of
the Co-Investing Participants (i) waive, modify or amend in any respect
whatsoever the interest rate provisions set forth in the Loan Documents, (ii)
increase the maximum principal amount of the Loan other than as a result of
protective advances in situations which are, in the Lender's opinion in the
exercise of commercially reasonable judgement, of an emergency nature, including
without limitation advances for the payment of taxes or insurance premiums,
provided that in any event such increases shall be subject to the limitations
set forth on Exhibit B, (iii) extend the maturity date of the Loan, other than
in accordance with any mandatory provisions of the Loan Documents relating
thereto, (iv) make or consent to any materially adverse amendment, modification
or waiver of any of the terms, covenants, provisions or conditions of the Loan
Documents, (v) waive, compromise or settle any material claim against the
Borrower or any guarantor or other person or entity (a "Guarantor") liable for
payment of the Loan in whole or in part or for the observance and performance by
the Borrower of any of the terms, covenants, provisions and conditions of the
Loan Documents, or release the Borrower or any Guarantor from any material
obligation or liability under the Loan Documents, (vi) waive any material
default under the Loan Documents, or (vii) substitute, release, reconvey or
change, in whole or in part, any collateral or security interest held under the
Loan Documents other than in accordance with any mandatory provisions of the
Loan Documents or agree to subordinate or otherwise adversely affect the
priority of the lien held by the Lender on the Premises, the Improvements or any
other security for the Loan. The Lender, in its capacity as lead lender and
servicer, may, without obtaining the prior consent of the Co-Investing
Participants, (i) extend for reasonable periods of time the time for the
observance or performance by the Borrower or any Guarantor of the terms and
conditions of the Loan Documents, provided that such extension in the reasonable
judgment of the Lender will not have a materially adverse effect on the Loan,
the Borrower's or any Guarantor's performance of its obligations under the Loan
Documents or the collateral for the Loan, and further provided that no such
extension in the case of any scheduled payment of principal and/or interest on
the Loan shall be for a period in excess of ten (10) Business Days (hereinafter
defined) beyond the expiration of any applicable grace period with respect
thereto without the prior unanimous written consent of the Co-Investing
Participants, (ii) agree or consent to any non-material amendment, modification
or waiver of the terms, covenants, provisions or conditions of the Loan
Documents (it being understood and agreed that the Lender shall not agree,
except pursuant to the immediately preceding clause (i), to modify any economic
terms of the Loan without the unanimous written consent of the Co-
736730.10
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<PAGE>
Investing Participants), (iii) waive, compromise or settle any non-material
claim against the Borrower or any Guarantor, or release the Borrower or any
Guarantor from any non-material obligation or liability under the Loan Documents
(non-material claims, for the purposes of this clause (iii), being defined as
any single claim not in excess of $10,000 or any claims in the aggregate not in
excess of $25,000 over the term of the Loan), (iv) waive any non-material
default under the Loan Documents (it being understood and agreed that the Lender
shall not agree, except pursuant to the immediately preceding clause (i), to
waive any monetary default under the Loan without the unanimous written consent
of the Co-Investing Participants), (v) release, reconvey or change, in whole or
in part, any collateral or security interest held under the Loan Documents which
is required to be released or reconveyed in accordance with the express
provisions of the Loan Documents, and (vi) subject to the provisions of the
preceding sentence, do or perform any act or thing which in the reasonable
judgment of the Lender is necessary to enable the Lender to discharge and
perform its duties under this Agreement or which in the reasonable judgment of
the Lender is necessary or required to preserve and protect the liens and
security interests created by the Loan Documents and the priority thereby and
the collateral for the Loan and the interests of the Lender and the Co-
Investing Participants therein. Notwithstanding the foregoing, in no event shall
the Lender (a) take any action that would to the Lender's knowledge result in
unrelated business taxable income to the Co-Investing Participants, unless
otherwise agreed by the unanimous written consent of the Co-Investing
Participants or (b) take or omit to take any action in violation of applicable
law or the provisions of the Loan Documents or (unless otherwise agreed by
unanimous consent of the Co-Investing Participants) the provisions of this
Agreement. Each Co-Investing Participant shall from time to time, upon request
of the Lender, but subject to the immediately following provisions of this
paragraph, execute and deliver such documents and instruments as may be
reasonably necessary to enable the Lender to effectively administer and service
the Loan in its capacity as lead lender and servicer and in the manner
contemplated by the provisions of this Agreement. Prior to taking any action in
connection with the Loan in the name of any Co-Investing Participant or
Co-Investing Participants in any state, the Lender shall notify such
Co-Investing Participant or Co-Investing Participants in writing. Each such
Co-Investing Participant shall have the right to advise the Lender, within five
(5) days of receipt of such notice, that it is likely that the laws of the state
in which said action is to be taken either prohibit such action if taken in the
name of such Co-Investing Participant or that such Co-Investing Participant
would be adversely affected under the "doing business" or tax laws of such
state, or any federal or state regulatory laws, if such action is taken in its
name. Upon receipt of any such notice from a Co-Investing Participant, the
Lender shall, in lieu of taking the action in question in the name of such
Co-Investing Participant, take action in the name of such Person or Persons, as
agent of or in trust for such Co-Investing Participant, as shall be requested by
such Co-Investing Participant, it being understood and agreed that all costs and
expenses incurred by the Lender in complying with the foregoing provisions of
this sentence at the request of a particular Co-Investing Participant shall be
borne by such Co- Investing Participant and shall be reimbursed to the Lender
upon demand, provided that Lender has furnished to such Co-Investing Participant
evidence reasonably satisfactory to such Co-Investing Participant,
substantiating such expenditures. Such Person or Persons shall
736730.10
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<PAGE>
acknowledge in writing that such action is being taken by it in the name of such
Co-Investing Participant in question. Each Co-Investing Participant hereby
acknowledges that the Lender has made no representations or warranties with
respect to the Loan, other than as expressly set forth in this Agreement, and
that the Lender shall have no responsibility for (i) the collectibility of the
Loan, (ii) the validity, enforceability or legal effect of any of the Loan
Documents or the Title Insurance Policy, if any, described in Exhibit A attached
hereto, or any survey furnished or to be furnished to the Lender in connection
with the Loan, (iii) the validity, sufficiency or effectiveness of the lien
created or to be created by the Loan Documents, or (iv) the financial condition
of the Borrower or any Guarantor or the accuracy of any information supplied by
or to be supplied in connection with the Borrower, any Guarantor, the Premises,
the Improvements or otherwise with respect to the Loan or the collateral for the
Loan. Each Co-Investing Participant assumes all risk of loss in connection with
its respective undivided interest in the Loan to the full extent of its
respective undivided percentage interest therein. The Lender assumes all risk of
loss in connection with its undivided interest in the Loan to the full extent of
its undivided percentage interest therein. The Lender, in its capacity as lead
lender and servicer, shall retain all rights under the Loan Documents with
respect to enforcement, collection and administration of the Loan and the
security for the Loan, which rights of the Lender shall be subject to the
provisions of paragraph 4 of this Agreement. At all times and until such time as
the Loan has been paid in full, the Lender shall act as lead lender and shall
service the Loan on behalf of itself and the Co-Investing Participants in
accordance with the provisions of this Agreement. The Lender shall exercise the
same care in handling the Loan and the security therefor as the Lender exercises
with respect to loans which are held solely by the Lender for its own account
(without regard to any other loan by the Lender to the Borrower which is
subordinate in priority to the Loan or any obligation of the Borrower to the
Lender other than in connection with the Loan), and the Lender, in its capacity
as lead lender and servicer, shall have no responsibility to the Co-Investing
Participants, other than to exercise such standard of care and, in any event,
the Lender shall have no liability with respect to any Co-Investing
Participant's undivided interest in the Loan, except for any liability arising
from Lender's gross negligence, bad faith or willful misconduct. For purposes of
this Agreement, the term "Business Day" shall mean any day on which the Lender
and commercial banks are open for business in New York City.
3. Expenses. From and after the date hereof, the Lender and
the Co-Investing Participants shall share, in accordance with their respective
undivided percentage interests in the Loan, any expenses and costs reasonably
sustained or incurred in connection with the Loan as set forth below in this
paragraph. Each Co-Investing Participant shall promptly upon request by the
Lender pay to the Lender such Co-Investing Participant's pro rata share of any
reasonable out-of-pocket expenses and costs actually incurred by the Lender and
documented in connection with the Loan, to the extent any such expenses or costs
are not paid or covered by the Borrower, excluding any expenses and costs
incurred by the Lender in connection with any dispute with any Co-Investing
Participant but including without limitation any and all loan servicing fees
payable to the Loan Servicer in connection with the servicing and administration
of the Loan (the "Servicing Charges"), provided that the Lender shall require
the Loan
736730.10
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<PAGE>
Servicer to service and administer the Loan in compliance with the terms,
provisions and conditions of this Agreement and all of the material terms,
provisions and conditions of the Loan Servicer's agreement or agreements with
Lender applicable to the Loan. The Lender shall promptly upon request by any
Co-Investing Participant pay to such Co-Investing Participant its pro rata share
of any reasonable out-of-pocket expenses and costs actually incurred by such
Co-Investing Participant in connection with the Loan, to the extent any such
expenses or costs are not paid or covered by the Borrower (excluding any
expenses and costs incurred by such Co-Investing Participant in connection with
any dispute with the Lender), it being agreed, however, that no Co-Investing
Participant shall seek reimbursement for any such out-of-pocket expenses or
costs if the same were incurred without obtaining the prior consent of the
Lender. Notwithstanding anything to the contrary contained herein, each of the
Lender and the Co-Investing Participants agrees for itself that it shall be
responsible for the payment of the day-to-day expenses incurred by it in
connection with its own administration and servicing of its respective undivided
interest in the Loan. No provision of this Agreement shall be deemed to limit or
modify the Lender's right to reimbursement by each Co-Investing Participant for
its pro rata share of the Servicing Charges, to the extent that such Servicing
Charges are incurred in accordance with the foregoing provisions of this
paragraph.
4. Default by the Borrower. The Lender shall promptly, after
the Lender's having knowledge thereof, inform the Co-Investing Participants in
writing of any material default under the Loan Documents and of all material
facts relating to such default or relating to any other aspect of the Loan which
facts are likely to have a materially adverse effect on the value of the
security for the Loan or on the ability of the Borrower or any Guarantor to
perform its obligations under the Loan Documents and shall keep the Co-Investing
Participants informed and up to date with respect to such default and such facts
and any actions taken by the Lender, in its capacity as lead lender and
servicer, in connection therewith, in written notices delivered on a reasonably
timely basis in connection with the material developments relating thereto. Upon
the occurrence of a material default under the Loan Documents, and within 10
days after written notification to the Co-Investing Participants by the Lender
of such default or within such shorter period of time after notification as may
be deemed advisable by the Lender, the Lender and the Co-Investing Participants
shall consult to determine a mutually acceptable course of action to take with
respect to such default and then to pursue such course of action without delay
and with due diligence. Notwithstanding any contrary or inconsistent provision
of this paragraph, no Co-Investing Participant shall be obligated or required
hereunder to approve or disapprove of the actual taking of title to the Premises
and the Improvements by the Lender and the Co-Investing Participants (whether at
a foreclosure sale, the consummation of a deed in lieu of foreclosure
transaction or otherwise) unless and until the Lender has furnished such
Co-Investing Participant with a recent appraisal and an updated environmental
report concerning the Premises and the Improvements. No action whatsoever shall
be taken by the Lender in response to any such default unless the Lender and the
Co- Investing Participants unanimously agree upon a mutually acceptable course
of action to pursue. If foreclosure is the action taken, then after payment of
all reasonable costs and expenses of foreclosure and collection, the Lender
shall promptly remit to each Co-Investing
736730.10
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<PAGE>
Participant its pro rata share of all net proceeds received by the Lender as a
consequence of such foreclosure proceeding, including, without limitation, net
proceeds of foreclosure sale, net income from operation of the Premises and the
Improvements pending liquidation, and net proceeds of any resale of the Premises
and the Improvements. If the Premises and the Improvements are acquired through
foreclosure, deed in lieu of foreclosure or otherwise, the Lender and the
Co-Investing Participants shall have undivided interests in the Premises and the
Improvements equal to their respective undivided percentage interests in the
Loan and title shall be taken in the name of the Lender (or a subsidiary
thereof) and the Co-Investing Participants (or their respective nominees or
affiliates, as applicable). If such title is taken, the Lender and the
Co-Investing Participants respectively waive any statutory or common law right
of partition or any other similar rights or remedies, and the Lender and the
Co-Investing Participants agree to consult as to the best manner in which to
proceed with respect to the operation, management, maintenance, development and
disposition of the Premises and the Improvements. No action whatsoever shall be
taken by the Lender with respect to the operation, management, maintenance,
development and disposition of the Premises and the Improvements in response to
any such default unless the Lender and the Co-Investing Participants unanimously
agree upon a mutually acceptable course of action to pursue. The Lender shall,
subject to the provisions of this paragraph, retain in its capacity as lead
lender and servicer, all rights with respect to the operation, management and
maintenance of the Premises and the Improvements pending the disposition thereof
in accordance with the provisions of this paragraph. The Co-Investing
Participants shall promptly execute and deliver to the Lender all documents and
instruments which may be reasonably requested or required by the Lender to
enable the Lender to operate, manage and maintain the Premises and the
Improvements and to effect a disposition thereof in accordance with the
provisions of this paragraph. Without limiting the generality of the foregoing
provisions, the Lender and the Co- Investing Participants shall undertake
promptly upon any such taking of title, and shall thereafter diligently and
expeditiously and in good faith negotiate, execute and deliver a partnership,
operating, joint venture or other similar agreement setting forth the respective
rights and obligations of the Lender and the Co-Investing Participants with
respect to the Premises and the Improvements, which rights and obligations shall
be substantially equivalent to the rights set forth in this Agreement. All
reasonable out-of-pocket expenses actually incurred in connection with any
action taken pursuant to the provisions of this paragraph shall be shared by the
Lender and the Co-Investing Participants on a pro rata basis. The Lender and the
Co-Investing Participants shall share in accordance with their respective
undivided percentage interests in the Loan any losses, expenses, costs or
liabilities (including, without limitation, reasonable attorneys' fees)
sustained or incurred by the Lender or any Co-Investing Participant as a result
of any action taken or not taken by the Lender in accordance with the provisions
of this paragraph.
5. Approval of Documents. Each Co-Investing Participant
represents and warrants for itself that it has examined and approved (i) the
Note, the Mortgage and the other Security Documents, as the case may be, and
such other of the Loan Documents as such Co- Investing Participant has deemed
necessary or appropriate, (ii) the state of title to the Premises
736730.10
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<PAGE>
reflected in the Title Insurance Policy, if any, described in Exhibit A attached
hereto to the extent such Co-Investing Participant has deemed necessary or
appropriate, (iii) the title insurance arrangements with respect to the
Mortgage, if any, inclusive of the identity of the co- insuring and reinsuring
title insurance companies, if any, and their respective levels and amounts of
liability thereunder to the extent such Co-Investing Participant has deemed
necessary or appropriate and (iv) other due diligence items regarding the Loan
and the Premises and the Improvements to the extent such Co-Investing
Participant has deemed necessary or appropriate.
6. Files and Records. The Lender shall keep and maintain at
its offices, or the offices of its loan servicer, complete and accurate files
and records of all matters pertaining to the Loan, which files and records shall
be available for inspection and copying by the Co-Investing Participants and
their respective employees and agents during normal business hours upon
reasonable prior notice to the Lender. The Lender shall promptly upon request of
any Co-Investing Participant deliver to such Co-Investing Participant such
information with respect to the Loan, the Borrower, the Premises, the
Improvements, or any Guarantor which may reasonably be requested by such
Co-Investing Participant and which is otherwise within the Lender's reasonable
ability to provide.
7. Other Security. So far as each Co-Investing Participant's
undivided interest in the Loan is concerned, the security for the advances made
pursuant to the Loan Documents shall include only that security specifically
listed or described in the Loan Documents, together with any permitted
substitutions therefor, and any additional security specifically pledged to
secure the advances made pursuant to the Loan Documents. No Co-Investing
Participant shall have any interest in any property or guaranty taken as
security for any other loans made by the Lender to the Borrower (other than any
such loans in which such Co-Investing Partiticipant otherwise owns an interest)
or in any other property or guaranty now or hereafter in the Lender's possession
or control which may be or become security for the undivided interest in the
Loan held by the Lender by reason of the general description contained in such
guaranty or in any general loan and collateral agreement or collateral note held
by the Lender or by reason of applicable law now or hereafter in effect or
otherwise, provided, however, that if any such property, guaranty or the
proceeds thereof shall be applied in reduction of the Loan, then each
Co-Investing Participant shall be entitled to receive its pro rata share of such
application. Neither the Lender nor any other Co-Investing Participant shall
have any interest in any property or guaranty taken as security for any other
loans made by a particular Co-Investing Participant to the Borrower (other than
any such loans in which the Lender of such other Co-Investing Partiticipant
otherwise owns an interest) or in other property or guaranty now or hereafter in
such Co-Investing Participant's possession or control which may be or become
security for the undivided interest in the Loan held by such Co-Investing
Participant by reason of the general description contained in such guaranty or
in any general loan and collateral agreement or collateral note held by such
Co-Investing Participant or by reason of applicable law now or hereafter in
effect or otherwise, provided, however, that if any such property, guaranty or
the proceeds thereof shall be applied in reduction of any portion of the Loan,
736730.10
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<PAGE>
including, without limitation, any application in reduction of such Co-Investing
Participant's undivided interest in the Loan, then the Lender and each other
Co-Investing Participant shall be entitled to receive its pro rata share of such
application.
8. Amounts Received by Co-Investing Participants. Each
Co-Investing Participant agrees that if at any time it shall receive from any
sources whatsoever any payment on account of the Loan in excess of its pro rata
share thereof, it will promptly remit to the Lender the amount of such excess,
and Lender shall retain its share of such excess and shall promptly remit to the
other Co-Investing Participants their respective shares in such excess, in each
case pro rata in accordance with the respective undivided percentage interests
of the Lender and such other Co-Investing Participants in the Loan and the Loan
Documents or as otherwise provided on Exhibit B. The Lender agrees that if at
any time it shall receive from any sources whatsoever any payment on account of
the Loan in excess of its pro rata share thereof, it will promptly remit to the
Co-Investing Participants the amount of such excess, pro rata in accordance with
the Co-Investing Participants' respective undivided percentage interests in the
Loan and the Loan Documents or as otherwise provided on Exhibit B.
9. Assignments and Subparticipations. (a) The Lender shall,
subject to the terms of this paragraph hereinafter set forth, have the right
after the date of this Agreement to (i) pledge the entire Loan and Loan
Documents, subject to the express right of the Co-Investing Participants'
undivided interests in the Loan, to a third party lender in connection with any
financing provided to the Lender, and such third party lender shall be permitted
to exercise its remedies against the Lender and shall, at such third party
lender's option, succeed to the interest of the Lender and be entitled to all of
the rights and benefits of the Lender under the Loan and the Loan Documents,
subject, however to the provisions of subparagraph (e) below (and any and all
other applicable provisions of this Agreement), (ii) subject to the provisions
of subparagraph (c) below (and any and all other applicable provisions of this
Agreement), sell, in whole but not in part, its undivided interest in the Loan,
and (iii) subject to the provisions of subparagraph (d) below (and any and all
other applicable provisions of this Agreement), sell one or more
subparticipation interests in the Lender's undivided interest in the Loan to any
domestic or foreign banks, insurance companies, pension funds, trusts or other
institutional lenders or other persons, parties or investors (including, but not
limited to, grantor trusts, owner trusts, special purpose corporations, REMICs,
real estate investment trusts or other similar or comparable investment
vehicles) selected by the Lender and on terms satisfactory to the Lender,
provided that if the Lender elects to subparticipate its interest in the Loan,
(x) the Lender and affiliates or subsidiaries of the Lender (specifically
excluding EOPLP and its affiliates) shall at all times and until the Loan is
paid in full retain an aggregate undivided interest in the Loan, which interest
will not be subparticipated, in an amount not less than 20% of the outstanding
principal balance of the Loan from time to time (the calculation of which
retained amount shall be made without regard to any interest of the Lender in
the Loan which has been pledged to a third party lender as provided in this
Agreement), (y) the Lender shall remain the lead lender and servicer of the Loan
as provided in this Agreement and (z) the Lender shall under no circumstance
sell, transfer, assign, alienate or delegate to any
736730.10
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subparticipant any of the voting, consent or approval rights of the Lender with
respect to the Loan, the Premises or the Improvements, the sale of undivided
participation interests or subparticipations in the Loan, or any other matters
provided for in this Agreement, and any purported assignment of such voting,
consent or approval rights shall be void and not binding on the Co-Investing
Participants. If the Lender elects to subparticipate its undivided interest in
the Loan, no Co-Investing Participant shall in any event have any obligation to
look to any person, party or entity (including, without limitation, any such
bank, insurance company, pension fund, trust, other institutional lender,
person, party or investor or affiliate or subsidiary of the Lender to whom the
Lender has sold and assigned a participation interest in the Lender's undivided
interest in the Loan from time to time) other than the Lender for the observance
and performance by the Lender of its obligations under this Agreement including,
without limitation, those set forth in paragraph 3 of this Agreement.
(b) Each Co-Investing Participant shall, subject to the terms
of this paragraph herein set forth, have the right after the date of this
Agreement to (i) subject to the provisions of subparagraph (c) below, sell, in
whole but not in part, its undivided interest in the Loan and (ii) subject to
the provisions of subparagraph (d) below, sell one or more subparticipation
interests in such Co-Investing Participant's undivided interest in the Loan to
any domestic or foreign banks, insurance companies, pension funds, trusts or
other institutional lenders or other persons, parties or investors (including,
but not limited to, grantor trusts, owner trusts, special purpose corporations,
REMICs, real estate investment trusts or other similar or comparable investment
vehicles) selected by such Co-Investing Participant and on terms satisfactory to
such Co-Investing Participant, provided the Lender shall have the right to
approve any proposed subparticipation by such Co-Investing Participant and the
form of agreement between such Co-Investing Participant and each subparticipant
(which approval will not be unreasonably withheld), and provided further that if
such Co-Investing Participant elects to subparticipate its interest in the Loan,
(x) such Co-Investing Participant and affiliates or subsidiaries of the
Co-Investing Participant shall at all times and until the Loan is paid in full
retain an aggregate undivided interest in the Loan, which interest will not be
subparticipated, in an amount greater than 50% of the undivided participation
interest in the Loan held by such Co-Investing Participant on the date hereof
(as such amount may be proportionately increased in connection with any approved
future advances under the Loan) and (y) such Co-Investing Participant shall
under no circumstance sell, transfer, assign, alienate or delegate to any
subparticipant any of the voting, consent or approval rights of such
Co-Investing Participant with respect to the Loan, the Premises or the
Improvements, the sale of undivided participation interests or subparticipations
in the Loan, or any other matters provided for in this Agreement, and any
purported assignment of such voting, consent or approval rights shall be void
and not binding on the Lender or the other Co-Investing Participants. If any
Co-Investing Participant elects to subparticipate its undivided interest in the
Loan, neither the Lender nor any other Co-Investing Participant shall in any
event have any obligation to look to any person, party or entity (including,
without limitation, any such bank, insurance company, pension fund, trust, other
institutional lender, person, party or investor or affiliate or subsidiary of
such Co-Investing Participant to whom such Co-Investing Participant has sold and
assigned a
736730.10
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<PAGE>
participation interest in such Co-Investing Participant's retained undivided
interest in the Loan from time to time) other than such Co-Investing Participant
for the observance and performance by such Co-Investing Participant of its
obligations under this Agreement, including, without limitation, those set forth
in paragraph 3 of this Agreement.
(c) Any and each sale or transfer by the Lender or any
Co-Investing Participant of its undivided interest in the Loan shall be subject
to the terms and provisions set forth in this subparagraph (c).
(i) If any party to this Agreement (an "Offeror")
desires to sell or transfer its undivided interest in the Loan, such
Offeror shall give written notice (the "Sale Notice") to the other
parties to this Agreement (each an "Offeree"; collectively, the
"Offerees") of its desire to do so and of the price and other terms
under which the Offeror proposes to dispose of its undivided interest
in the Loan, which Sale Notice shall constitute an offer on the part of
the Offeror to sell to the Offerees the Offeror's undivided
participation interest in the Loan, upon the terms and conditions set
forth in such notice. Within ten (10) days after the giving of the Sale
Notice by the Offeror, any one or more of the Offerees may give written
notice (a "Response Notice") to the Lender, as agent and servicer,
stating (x) that such Offeree or Offerees commit to purchase the
Offeror's undivided interest in the Loan at the aggregate price and
under the terms specified in the Sale Notice or (y) that such Offeree
or Offerees elect to exercise their right of inclusion in such sale
pursuant to clause (iii) below. Any Offeree that shall not have
delivered a Response Notice within such 10-day period shall be deemed
to have rejected the Offeror's offer to sell its undivided interest in
the Loan to such Offeree, and the Offeror shall be free to sell its
undivided interest in the Loan to one or more other Offerees that have
delivered Response Notices electing to purchase all or a portion of
such undivided interest in the Loan or to any other Person, subject to
the terms, provisions and conditions set forth below in this paragraph
(including, without limitation, clauses (iii), (v) and (vii) hereof).
The Lender shall promptly notify the Offeror of any and all Response
Notices and the respective contents thereof. If no Offeree has
delivered a Response Notice to the Lender within such 10-day period,
the Offeror shall be free to sell or transfer its undivided interest in
the Loan to any Permitted Institutional Transferee, subject to the
terms, provisions and conditions set forth below in this paragraph
(including, without limitation, clauses (iii) and (v) hereof). The
Offeror's undivided interest in the Loan, if it is the subject of
Response Notices by more than one Offeree, shall be purchased and paid
for by and divided among such Offerees in proportion to their
respective percentage interests in the Loan, or as otherwise agreed
among the Offerees that have committed to purchase the Offeree's
undivided participation interest in the Loan as provided above in this
clause (i). For purposes of this Agreement, the term "Permitted
Institutional Transferee" shall mean an insurance company, bank,
investment bank, savings and loan association, real estate investment
trust ("REIT"), Real Estate Mortgage Investment Conduit ("REMIC"),
trust company, commercial credit corporation, pension plan, pension
fund
736730.10
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<PAGE>
or pension fund advisory firm, mutual fund or other investment company,
governmental plan or entity, "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act of 1933, as amended
(other than a broker/dealer), or an institution substantially similar
to any of the foregoing, or any entity wholly owned by any one or more
of such institutions, in each case having not less than one billion
dollars in assets and not less than $250,000,000 in equity.
(ii) Notwithstanding any provision to the contrary
contained in clause (i) above, if, after the Offerees have declined, or
have been deemed to have declined, the offer to purchase the Offeror's
undivided participation interest in the Loan in accordance with clause
(i) above, the proposed sale price of the Offeror's undivided interest
to a third party shall be less than 90% of the price specified in the
applicable Sale Notice, then the Offeror shall again offer to sell its
undivided interest in the Loan to the Offerees, in accordance with the
provisions of clause (i) above, before the Offeror may complete any
such sale. Furthermore, the Offeror's undivided interest in the Loan
shall again be subject to the provisions of clause (i) of this
paragraph if, within ninety (90) days after the giving of the
applicable Sale Notice, the Offeror shall not have completed the
disposition of its undivided interest in the Loan as contemplated by
such Sale Notice.
(iii) If and only if the Offeror is the Lender, any
Co-Investing Participant not electing to purchase all or any portion of
the Lender's undivided interest in the Loan pursuant to clause (i)
above, may elect in the alternative, in a Response Notice delivered in
accordance with the provisions of clause (i) above, to cause the Lender
to offer to a third party purchaser such Co-Investing Participant's
undivided interest in the Loan, together with the Lender' s undivided
interest therein. It shall be a condition of the sale by the Lender of
its undivided interest in the Loan to a third party that each
Co-Investing Participant that so elects shall have the right to have
its undivided participation interest in the Loan purchased by the
purchaser of the Lender's undivided participation interest in the Loan,
at the same price (adjusted proportionately in accordance with such
Co-Investing Participant's percentage interest in the Loan, as compared
with the Lender's) and on the same terms and conditions as specified in
the Sale Notice.
(iv) If any one or more Offerees irrevocably commit to
purchase the Offeror's undivided participation interest in the Loan in
a Response Notice or Notices as contemplated by clause (i) above, the
closing of such purchase shall take place at the principal place of
business of the Offeror (or its attorneys) at 10:00 A.M. (New York City
time) on the twentieth (20th) day following the date on which the
Offeror delivered the Sale Notice, or if such day is not a Business
Day, then the next day that is a Business Day. If any Offeree that has
elected to purchase all or (in the event that more than one Offeree
executes and delivers a Response Notice exercising such Offeree's right
to purchase) a portion of the Offeror's undivided participation
interest in the Loan
736730.10
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<PAGE>
in accordance with the provisions of this paragraph fails to purchase
such participation interest pursuant to the provisions hereof, then
such Offeree shall be in default under this Agreement, and the Offeror
shall be entitled to exercise any and all rights and remedies available
to it against such Offeree.
(v) No party to this Agreement shall be permitted to sell or
transfer less than all of its undivided interests in the Loan (except
for a sale of subparticipation interests as expressly provided in this
paragraph). Any attempted transfer of any party's undivided
participation interest in the Loan in violation of the terms of this
paragraph shall be ineffective to vest in any transferee any interest
in the Loan. Anything contained in this paragraph to the contrary
notwithstanding, any purchaser or other transferee of an undivided
participation interest in the Loan pursuant to this paragraph which
purchaser or transferee is not the Lender or a Co-Investing Partcipant
shall agree in writing in advance with the parties hereto to be bound
by and comply with all applicable provisions of this Agreement and to
assume in writing, upon the consummation of such purchase or transfer,
the obligations of the transferor under this Agreement and shall
thenceforth be deemed to be a Co-Investing Participant for all purposes
of this Agreement.
(vi) Notwithstanding the foregoing, the provisions of clauses
(i) through (v) above shall not apply to transfers or proposed
transfers of undivided participation interests in the Loan (u) by EOPLP
to (1) any entity (other than Capital Trust) in which EOPLP holds,
directly or indirectly, an economic interest of greater than 50% (an
"EOPLP Entity") or (2) any EOP-sponsored "Paper Clip" enterprise or any
Affiliate or subsidiary thereof (it being understood and agreed that
EOPLP and each EOPLP Entity shall have the right to transfer its
undivided participation interest in the Loan to EOPLP or any other
EOPLP Entity), (v) by GMIM to (1) one or more GM Pension Plans or (2)
any entity in which GMIM holds, directly or indirectly, an economic
interest of greater than 50% (a "GMIM Entity") (it being understood and
agreed that GMIM and each GMIM Entity shall have the right to transfer
its undivided participation interest in the Loan to GMIM or any other
GMIM Entity), (w) by VRLP to (1) any entity in which VRLP holds,
directly or indirectly, an economic interest of greater than 50% (a
"VRLP Entity") or (2) Vornado Operating Inc. or any Affiliate or
subsidiary of Vornado Operating Inc. (it being understood and agreed
that VRLP and each VRLP Entity shall have the right to transfer its
undivided participation interest in the Loan to VRLP or any other VRLP
Entity) or (x) by the Lender to any Affiliate of the Lender, other than
an Affiliate of Capital Trust the affairs of which are managed and
controlled, directly or indirectly, by Samuel Zell or (y) by the Lender
or any Co-Investing Participant to a Loan Pledgee (hereinafter defined)
as contemplated by the provisions of subparagraph (e) below or (z) with
respect to any undivided participation interest in the Loan acquired by
a Loan Pledgee through the exercise of its remedies against the Lender
or any Co-Investing Participant, by such Loan Pledgee to any other
individual, corporation, partnership, business trust, trust,
unincorporated association or
736730.10
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<PAGE>
other entity, or a governmental entity of any country (each a
"Person"). For purposes of this Agreement, the term "Affiliate" shall
have the meaning given to such term in Rule 405 under the Securities
Act of 1933, as amended.
(vii) Notwithstanding any contrary or inconsistent provision
contained in this Agreement, neither the Lender nor any of the
Co-Investing Participants nor any of the respective successors or
assigns of the foregoing (including without limitation any Loan Pledgee
that acquires an undivided participation interest in the Loan as a
result of such Loan Pledgee's realizing on its security interest
therein and any transferee of any Loan Pledgee) shall transfer its
respective interest in the Loan to any Person that is not a Permitted
Institutional Transferee under any circumstances, except for (x) a
transfer in accordance with the provisions of paragraphs 9(c)(i)
through 9(c)(iv) of this Agreement to a Co-Investing Participant or to
the Lender (as the case may be) pursuant to the exercise of its right
of first offer to purchase such interest in the Loan as set forth
hereinabove or (y) a transfer pursuant to and in accordance with the
express provisions of paragraph 9(c)(vi) of this Agreement.
(d) Any and each sale of a subparticipation interest in the
Loan by any party hereto shall be subject to the following provisions of this
subparagraph (d).
(i) Any sale by the Lender of a subparticipation in
its respective undivided interest in the Loan as provided in
subparagraph (a) above shall be subject to the Co-Investment Right of
each Co-Investing Participant. For purposes of this clause (i), the
term "Co-Investment Right" shall have the meaning given to such term in
the Co-Investment Agreement, modified as necessary to reflect an
offering by the Lender to the Co-Investing Participants of a
subparticipation interest in the Lender's undivided interest in the
Loan, rather than a co-investment in the applicable Target Investment
(as such term is defined in the Loan Agreement).
(ii) Any sale by a Co-Investment Participant of a
subparticipation in its respective undivided interest in the Loan as
provided in subparagraph (b) above shall be subject to the
Co-Investment Right of each of the Lender and the other Co-Investing
Participants. For purposes of this clause (ii), the term "Co-Investment
Right" shall have the meaning given to such term in the Co-Investment
Agreement, modified as necessary to reflect an offering by a
Co-Investing Participant to Lender and the other Co-Investing
Participants (rather than by Lender to the Co-Investing Participants)
of a subparticipation interest in such Co-Investment Participant's
undivided interest in the Loan, rather than a co-investment in the
applicable Target Investment.
(iii) Each subparticipation agreement entered into
between, on one hand, the Lender or any Co-Investing Participant (as
the case may be) and, on the other hand, the purchaser or purchasers of
a subparticipation in such party's undivided interest in the Loan shall
incorporate the requirements of paragraph 9(d) of this Agreement
736730.10
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<PAGE>
relating to the rights of subparticipants. As a condition precedent to
the delivery of any such subparticipation agreement by a Co-Investing
Participant or the Lender (as the case may be), the terms and
provisions of such agreement shall be subject to the approval of the
other parties to this Agreement, which approval shall not be withheld,
conditioned or delayed provided that such other parties shall be
reasonably satisfied that the terms and provisions of such
subparticipation agreement do not derogate the rights of such other
parties to this Agreement or otherwise contravene the material terms
and provisions of this Agreement.
(iv) Notwithstanding any contrary or inconsistent
provision contained in this Agreement, neither the Lender nor any of
the Co-Investing Participants shall under any circumstances sell or
transfer a subparticipation interest in the Loan to any Person that is
not a Permitted Institutional Transferee.
In no event shall the provisions of this subparagraph (d) be deemed to apply to
any pledge by the Lender or any Co-Investing Participant of any of interest in
the Loan to a Loan Pledgee as contemplated by the provisions of subparagraph (e)
below. Any attempted transfer of a subparticipation interest in the Loan in
violation of the terms and provisions of this paragraph shall be ineffective to
vest in any transferee any direct or indirect interest in the Loan.
(e) Notwithstanding anything contained in this Agreement to
the contrary:
(i) Each Co-Investing Participant hereby consents to
the pledge by the Lender to (x) German American Capital Corporation, a
Maryland corporation, or an affiliate thereof ("GACC"), (y) Morgan
Stanley Mortgage Capital Inc. or Morgan Stanley & Co. International
Limited or an affiliate thereof (collectively, "Morgan Stanley") or (z)
any other entity which has extended a credit facility to the Lender, as
the case may be (GACC, Morgan Stanley, or any entity described in the
foregoing clause (z), a "Lender Loan Pledgee"), of all right, title and
interest of the Lender in and to the Loan and the Loan Documents
(subject to the Co-Investing Participants' respective undivided
interests therein), as security for one or more advances by the
applicable Lender Loan Pledgee to the Lender under any such credit
facility.
(ii) The Lender and each of the Co-Investing
Participants hereby consent to the pledge by any Co-Investing
Participant to any entity which has extended a credit facility to such
Co-Investing Participant or any of its Affiliates (any entity described
in the foregoing provisions of this clause, a "Participant Loan
Pledgee"; a Participant Loan Pledgee or Lender Loan Pledgee, as the
case may be, shall hereinafter be referred to from time to time as a
"Loan Pledgee"), of all right, title and interest of such Co-Investing
Participant in and to the Loan and the Loan Documents (subject to the
Lender's and the Co-Investing Participants' respective undivided
interests therein), as security for one or more advances by the
applicable Participant Loan Pledgee to such
736730.10
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<PAGE>
Co-Investing Participant (or Affiliate of a Co-Investing Participant)
under any such credit facility.
(iii) The Lender and the Co-Investing Participants
other than the Pledgor (as hereinafter defined), and any one or more of
the foregoing, shall have the right, in the event that all of the
undivided interest in the Loan of the Lender or any Co-Investing
Participant (the Lender or any such Co-Investing Participant, as the
case may be, the "Pledgor") is transferred or conveyed to a Loan
Pledgee as a result of a default under a credit facility secured by a
pledge of such interest, to purchase such undivided interest in the
Loan for an aggregate purchase price equal to the amount of the
Pledgor's undivided interest in the outstanding principal balance of
the Loan, plus all interest and other sums due to the Pledgor with
respect to such portion of the outstanding principal balance of the
Loan, all as of the date of the closing of such purchase. Such right
shall be exercisable by the Lender and the Co-Investing Participants
(other than the Pledgor) as follows. Not later than sixty (60) days
from and after the date of such transfer to the Loan Pledgee, the
Lender and all of the Co-Investing Participants desiring to purchase
such undivided interest in the Loan (excluding the Pledgor) shall
confer and shall thereafter execute and deliver to such Loan Pledgee a
notice (the "Pledgee Buyout Notice"). The execution and delivery of a
Pledgee Buyout Notice shall create a binding obligation of the
signatories thereto to purchase the undivided interest in the Loan of
the Loan Pledgee in accordance with the provisions of this
subparagraph. Such undivided interest in the Loan, if it is the subject
of a Pledgee Buyout Notice executed and delivered by more than one
party, shall be purchased by such parties and paid for and divided
among such parties in proportion to their respective percentage
interests in the Loan, or as otherwise agreed among such parties. The
closing date of any such purchase from the Loan Pledgee shall be a date
unanimously agreed upon by the Loan Pledgee and the Lender (if it has
executed and delivered the Pledgee Buyout Notice) and all of the
Co-Investing Participants that have elected to purchase from the Loan
Pledgee such undivided interest in the Loan in accordance with the
provisions of this subparagraph (e)(iii), but in any event no later
than thirty (30) days from and after the last day of the 60-day period
described above in this subparagraph. If neither the Lender nor any
Co-Investing Participant delivers a Pledgee Buyout Notice within such
60-day period, then the Lender and all of the Co-Investing Participants
(excluding the Pledgor) shall be deemed to have waived the right to
purchase set forth herein, and the Loan Pledgee shall retain its
undivided interest in the Loan and the Loan Documents, together with
all of the rights and benefits and obligations that had, prior to such
realization by the Loan Pledgee of its security interests therein,
inured to and bound the Pledgor under and pursuant to the terms and
provisions of this Agreement.
10. Withholding Taxes. In the event the Lender or the Borrower
shall be required by law to deduct and withhold Taxes (as hereinafter defined)
from interest, fees or other amounts payable to any Co-Investing Participant
with respect to the Loan as a result of
736730.10
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<PAGE>
such Co-Investing Participant constituting a Non-Exempt Person (as hereinafter
defined), the Lender, in its capacity as lead lender and servicer, shall be
entitled to do so with respect to such Co-Investing Participant's interest in
such payment (all withheld amounts being deemed paid to such Co-Investing
Participant), provided the Lender shall furnish such Co-Investing Participant a
statement setting forth the amount of Taxes withheld, the applicable rate and
other information which may reasonably be requested for the purposes of
assisting such Co-Investing Participant to seek any allowable credits or
deductions for the Taxes so withheld in each jurisdiction in which such
Co-Investing Participant is subject to tax. A "Non-Exempt Person" is any Person
other than a Person that is either (i) a United States Person (as such term is
defined in Section 7701(a)(30) of the United States Internal Revenue Code of
1986, as amended), or (ii) has on file with the Lender for the year involved
such duly executed form(s) or statement(s) which may, from time to time, be
prescribed by law and which, pursuant to applicable provisions of (a) an income
tax treaty between the United States and the country of residence of such
Person, (b) the United States Internal Revenue Code of 1986, as amended, and as
such may hereafter be amended, or (c) any applicable rules or regulations in
effect under (a) or (b) above, permit the Lender to make such payments free of
any obligation or liability for withholding. For the purposes of this paragraph,
"Taxes" shall mean any income or other taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature, now or hereafter imposed by any
jurisdiction or by any department, agency, state or other political subdivision
thereof or therein. Each Co-Investing Participant for itself agrees to indemnify
the Lender and the Borrower against and to hold the Lender and the Borrower
harmless from any Taxes, interests, penalties and reasonable counsel fees
arising from any failure of the Lender or the Borrower to withhold Taxes from
payments made to such Co-Investing Participant in reliance upon any
representation, certificate, statement, document or instrument made or provided
by such Co-Investing Participant to the Lender or the Borrower in connection
with the obligation of the Lender or the Borrower to withhold Taxes from
payments made to such Co-Investing Participant, it being expressly understood
and agreed that (i) the Lender and the Borrower shall be absolutely and
unconditionally entitled to accept any such representation, certificate,
statement, document or instrument as being true and correct in all respects and
to fully rely thereon without any obligation or responsibility to investigate or
to make any inquiries with respect to the accuracy, veracity, conclusory
correctness, or validity of the same, and (ii) each Co-Investing Participant
upon request of the Lender shall, at its sole cost and expense, defend any claim
relating to the foregoing indemnification by counsel selected by such
Co-Investing Participant and reasonably satisfactory to the Lender. Each
Co-Investing Participant for itself represents to the Lender (and agrees that
the Borrower may rely upon such representation) that it is not a Non-Exempt
Person. Contemporaneously with the execution of this Agreement, and from time to
time as necessary during the term of this Agreement, each Co-Investing
Participant shall deliver to the Lender evidence reasonably satisfactory to the
Lender substantiating that it is not a Non-Exempt Person and such other evidence
as the Lender or the Borrower may reasonably request to establish that neither
the Lender nor the Borrower is obligated under applicable law to withhold Taxes
on sums paid to it with respect to the Loan or otherwise.
736730.10
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<PAGE>
11. Reserve Requirements and Capital Adequacy. The Lender and
the Co-Investing Participants agree that no proceeds realized on a foreclosure
of the Mortgage or other Security Documents or otherwise with respect to the
collateral held under the Loan Documents or any portion thereof or any sums
received after the Debt (as hereinafter defined) has been declared due and
payable shall be applied towards the payment of additional amounts due pursuant
to the provisions of the Loan Documents regarding reserve requirements or
capital adequacy, unless and until all other sums constituting part of the Debt
have been paid in full, and any sums available for application towards
additional amounts due under such provisions after the payment in full of the
balance of the Debt shall be applied to the respective additional amounts due to
the parties to whom such additional amounts are due in accordance with the
provisions of the Note or any other Loan Documents on a proportionate basis,
calculated in accordance with the respective additional amounts which are due.
Any additional amounts charged to the Borrower pursuant to the terms and
provisions of the Note or any other Loan Documents which amounts are paid by the
Borrower prior to the Debt being declared due and payable shall be distributed
to the parties to whom such additional amounts are payable in accordance with
the applicable provision of the Note or other Loan Documents. If any
Co-Investing Participant shall be entitled to receive additional amounts from
the Borrower in accordance with the provisions of the Note or the other Loan
Documents regarding reserve requirements or capital adequacy, such Co-Investing
Participant (i) shall certify to the Lender in a timely manner the additional
amounts due to it and the manner of calculation of such additional amounts,
which certification may be relied upon by the Lender, and (ii) shall indemnify
and agree to hold the Lender harmless from and against any loss, liability, cost
or expense of any nature whatsoever which the Lender or any other Co-Investing
Participant may incur as the result of any demand which is made on the Borrower
for the payment of such additional amounts or as a result of the payment of any
such additional amounts by the Borrower. The Lender shall not have the
obligation to request the Borrower to pay any additional amounts pursuant to the
Note or other Loan Documents regarding reserve requirements or capital adequacy
insofar as such additional amounts pertain to any person or party to whom any
Co-Investing Participant has assigned or subparticipated its undivided interest
in the Loan pursuant to the provisions of this Agreement, and the Borrower shall
not have the obligation to pay any such additional amounts pertaining to the
capital adequacy or reserve requirements applicable to such person or party,
unless the Lender shall agree to the contrary in its sole and absolute
discretion. The Lender reserves the right, but in no event shall have any
obligation, to purchase, or to arrange for the purchase of by another foreign or
domestic bank, insurance company, pension fund, trust or other institutional
Lender, the undivided interest in the Loan and the Loan Documents held by any
Co-Investing Participant who requests the payment of additional amounts pursuant
to the Note with respect to any period of time during which the Lender is not
also requesting payment for its own account of comparable amounts for a purchase
price equal to the funded principal amount of such Co-Investing Participant's
undivided interest in the Loan plus interest accrued and unpaid thereon and
other sums due with respect thereto, which right of purchase may be enforced by
the Lender in an action for specific performance and shall remain in effect for
so long as such Co-Investing Participant is requesting payment of such
additional amounts. The term "Debt" as
736730.10
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<PAGE>
used in this paragraph shall mean all principal, interest or other sums of any
nature whatsoever which may or shall become due and payable in accordance with
the provisions of the Note, the Mortgage, the Security Documents and the other
Loan Documents.
12. Entire Agreement. This Agreement (together with the
Exhibits attached hereto) contains, and is intended as, a complete statement of
all the terms of the arrangements between the parties with respect to the
matters provided for, and supersedes any previous agreements and understandings
between the parties with respect to those matters.
13. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with the laws of the State of New York,
without regard to its principles of conflicts of law.
14. Notices. All notices or other communications under this
Agreement shall be sufficient if in writing and delivered by hand or sent by
telecopy, or sent, postage prepaid by registered, certified or express mail, or
by recognized overnight air courier service and shall be deemed given when so
delivered by hand or telecopied, or if mailed or sent by overnight courier
service, on the third (3rd) Business Day after mailing (one Business Day in the
case of express mail or overnight courier service) to the parties at the
following addresses:
If to the Lender:
Capital Trust
605 Third Avenue - 26th Floor
New York, New York 10016
Attention: Loan Administration
Peter Ginsberg, Esq.
John Felletter
Facsimile: (212) 655-0044
with a copy to:
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attention: John A. Cahill, Esq.
Facsimile: (212) 856-7801
If to VRLP to:
Vornado Realty L.P.
c/o Vornado Realty Trust
Park 80 West, Plaza II
736730.10
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<PAGE>
Saddle Brook, New Jersey 07663
Attention: Wendy Silverstein
Facsimile: (201) 587-0600
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004-2498
Attention: Alan J. Sinsheimer, Esq.
Facsimile: (212) 558-3588
If to EOPLP to:
EOP Operating Limited Partnership
Two North Riverside Plaza
Chicago, Illinois 60606
Attention: Stanley M. Stevens, Esq.
Richard D. Kincaid
Facsimile: (312) 559-5009
with a copy to:
Rosenberg & Liebentritt, P.C.
Two North Riverside Plaza, Suite 1600
Chicago, Illinois 60606
Attention: Jonathan D. Wasserman, Esq.
Facsimile: (312) 454-0335
If to GMIM:
General Motors Investment Management Corporation
767 Fifth Avenue
New York, New York 10004
Attention: Jamie Behar
Facsimile: (212) 418-3651
736730.10
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<PAGE>
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Gerald S. Backman, Esq.
Facsimile: (212) 310-8007
or at such other address as the addressee may have furnished in writing to the
sender as provided herein.
15. Undivided Interests Not Securities. The undivided interest
in the Loan sold by the Lender to the Co-Investing Participants shall not be
deemed to be securities within the meaning of the Securities Act of l933, as
amended, or the Securities Exchange Act of l934, as amended. No representations
with respect to the Loan, the Borrower or any Guarantor have been made by the
Lender to the Co-Investing Participants except those, if any, contained herein
and except those representations, if any, heretofore made by the Lender to the
Co-Investing Participants in writing.
16. Parties' Intent. It is the intent and purpose of the
parties hereto that this Agreement represent a sale by the Lender to the
Co-Investing Participants of undivided interests in the Loan and the Loan
Documents and the rights, benefits and obligations arising therefrom. This
Agreement shall not be deemed to represent a pledge of any interest in the Loan
by the Lender to the Co-Investing Participants, or a loan from the Co-Investing
Participants (or any of them) to the Lender.
17. Captions. The titles and headings of the paragraphs of
this Agreement have been inserted for convenience of reference only and are not
intended to summarize or otherwise describe the subject matter of such
paragraphs and shall not be given any consideration in the construction of this
Agreement.
18. Counterparts. This Agreement may be executed in one or
more counterparts by some or all of the parties hereto, each of which
counterparts shall be an original and all of which together shall constitute a
single agreement.
19. Severability. If any term, covenant or provision of this
Agreement shall be held to be invalid, illegal or unenforceable in any respect,
this Agreement shall be construed without such term, covenant or provision.
20. Amendment; Waiver. This Agreement shall not be modified,
amended or terminated, except by an agreement in writing signed by the parties
hereto. Any party may waive compliance by another with respect to any of the
provisions of this Agreement. No
736730.10
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<PAGE>
waiver of any provision hereof shall be construed as a waiver of any other
provision. A waiver must be in writing.
21. Successors and Assigns. This Agreement and all of the
provisions hereof shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns.
22. Due Execution. The Lender and each Co-Investing
Participant respectively represents for itself that this Agreement has been duly
executed and delivered by it and constitutes its binding and enforceable
obligation in accordance with its terms.
23. Trustees. The Co-Investing Participants acknowledge and
agree that the trustees of the Lender shall have no personal liability hereunder
to any Co-Investing Participant and any obligation of the Lender hereunder to
any Co-Investing Participant or Co-Investing Participants shall be satisfied
solely from the assets of the Lender.
[Signatures begin on next page]
736730.10
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<PAGE>
IN WITNESS WHEREOF, the Lender and the Co-Investing
Participants have caused this Agreement to be duly executed as of the day and
year first above written.
LENDER:
CAPITAL TRUST
By:
------------------------------------------
Name:
Title:
CO-INVESTING PARTICIPANT[S]:
VORNADO REALTY L.P.
By: Vornado Realty Trust, its general partner
By:
-------------------------------------
Name:
Title:
EOP OPERATING LIMITED PARTNERSHIP
By: Equity Office Properties Trust, its general partner
By:
-------------------------------------
Name:
Title:
GENERAL MOTORS INVESTMENT MANAGEMENT
CORPORATION
By:
-----------------------------------------
Name:
Title:
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<PAGE>
ADDENDUM
The parties will endeavor in good faith to negotiate a mechanism, or series of
mechanisms, reasonably acceptable to the parties, such that if the parties fail
to reach unanimous consent with respect to any matter on which unanimous consent
by the Co-Investing Participants and the Lender is required, such disagreement
will trigger: (i) a buyout right as between two differing Co-Investing
Participants and (ii) a buyout right as between the Co-Investing Participant (if
there is only one) or the remaining Co-Investing Partcipant (if such
Co-Investing Participant has previously purchased the interest of another,
dissenting Co-Investing Participant) and the Lender.
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<PAGE>
EXHIBIT A
Co-Investment Agreement: That certain Co-Investment Agreement, dated as
of July __, 1998, by and among Capital Trust, Vornado Realty L.P., EOP
Operating Limited Partnership and General Motors Investment Management
Corporation, as agent for the GM Pension Plans.
Improvements:
Loan Documents: Collectively, the Note, the Mortgage, the Security
Documents and all other documents and instruments of any nature
whatsoever now or hereafter executed and delivered in connection with
the Loan, or otherwise relating thereto, as all of the same may be
modified and amended from time to time after the date of this
Agreement.
Mortgage:
Note:
Premises:
Security Documents:
Title Insurance Policy:
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<PAGE>
EXHIBIT B
Loan Reference Name or
Number: ______________________________
Outstanding Principal Balance
of Loan as of __/__/__1: $_____________
Maximum Amount of Increase
in Principal for Protective Advances: ***[$________ per advance; $_________
in the aggregate during the term of the
Loan]***
Interests of Lender and
Co-Investment Participants;
Other Key Features:
Principal Percentage Interest
Name Amount Interest Rate Fees2
- ---- --------- ---------- -------- -----
Lender $ %
[VRLP] $ %
[EOPLP] $ %
[GMIM] $ %
- --------
1 Insert date of Agreement or, if different, date of purchase of participation
interests.
2 Include other material features of participation arrangements for this
particular transaction, as applicable, e.g., the obligations of the
Co-Investing Participants with respect to future advances under the Loan, if
contemplated, increases in the interest rate, etc.
<PAGE>
EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made
as of July 28, 1998 among Capital Trust, a California business trust (the
"Company"), Vornado Realty L.P., a Delaware limited partnership ("VRLP"), EOP
Operating Limited Partnership, a Delaware limited partnership ("EOPLP"), Mellon
Bank N.A., as trustee for General Motors Hourly-Rate Employes Pension Trust, a
New York trust ("Hourly GM Trust"), and Mellon Bank N.A., as trustee for General
Motors Salaried Employes Pension Trust, a New York trust ("Salaried GM Trust"
and together with the Hourly GM Trust, the "GM Trust").
WHEREAS, CT Convertible Trust I, a Delaware statutory business
trust (the "Trust"), has offered to certain investors in a private placement
$150,000,000 aggregate liquidation amount of its 8.25% Step Up Convertible Trust
Preferred Securities (the "Convertible Preferred Securities"), representing
undivided beneficial interests in the assets of the Trust, and proposes to
invest the proceeds from such offering, together with the proceeds of the
issuance and sale by the Trust to the Company of $4,650,000 aggregate
liquidation amount of its 8.25% Step Up Convertible Trust Common Securities (the
"Common Securities"), representing an undivided interest in the assets of the
Trust, in $154,650,000 aggregate principal amount of 8.25% Step Up Convertible
Junior Subordinated Debentures of the Company (the "Debentures"); and
WHEREAS, the Company has agreed to issue the Common Shares (as
defined below) to the Holders (as defined below) upon conversion of the
Securities (as defined below) and to grant to the Holders the registration
rights set forth in Sections 2 and 4 hereof.
NOW, THEREFORE, the parties hereto, in consideration of the
mutual covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, hereby agree as follows:
Section 1. Definitions.
As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"Agent" means the principal placement agent on an agented
placement of Registrable Securities.
"Business Day" shall mean a day other than a Saturday, Sunday
or other day on which banking institutions in New York, New York are permitted
or required by any applicable law to close.
"Commission" shall mean the Securities and Exchange
Commission.
732353.7
<PAGE>
"Common Securities" shall have the meaning set forth in the
Preamble.
"Common Shares" shall mean the Class A common shares of
beneficial interest, $1.00 par value, in the Company.
"Company" shall have the meaning set forth in the Preamble and
also shall include the Company's successors.
"Continuously Effective" means, with respect to a specified
registration statement, that it shall not cease to be effective and current with
respect to applicable disclosure requirements and available for Transfers of
Registrable Securities thereunder, and shall not be subject to any stop order or
injunction, for longer than either (i) any ten (10) consecutive Business Days,
or (ii) an aggregate of fifteen (15) Business Days during the period specified
in the relevant provision of this Agreement.
"Convertible Preferred Securities" shall have the meaning set
forth in the Preamble.
"Debentures" shall have the meaning set forth in the Preamble.
"Demand Registration" shall have the meaning set forth in
Section 2(a) hereof.
"Demanding Holders" shall have the meaning set forth in
Section 2(a) hereof.
"EOPLP" shall have the meaning set forth in the Preamble.
"Evergreen Registration" shall have the meaning set forth in
Section 6 hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
"GM Trust" shall have the meaning set forth in the Preamble.
"Holder" or "Holders" shall mean VRLP, EOPLP and the GM Trust
or transferee of any such Person's Registrable Securities acquiring rights in
accordance with Section 9 hereof whenever such Person owns of record Registrable
Securities, or holds a security convertible into or exercisable or exchangeable
for, Registrable Securities, whether or not such purchase or conversion has
actually been effected and disregarding any legal restrictions upon the exercise
of such rights. If the Company receives conflicting instructions, notices or
elections from two or more persons with respect to the same Registrable
Securities, the Company may act upon the basis of the instructions, notice or
election received from the registered owner of such Registrable Securities.
732353.7
2
<PAGE>
"Indenture" means the Indenture dated as of July 28, 1998
between the Company and Wilmington Trust Company, as trustee.
"Majority Selling Holders" means those Selling Holders whose
Registrable Securities included in such registration represent a majority of the
Registrable Securities of all Selling Holders included therein.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"Person" shall mean an individual, partnership, corporation,
limited liability company, trust, estate, or unincorporated organization, or
other entity, or a government or agency or political subdivision thereof.
"Register," "Registered" and "Registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
ordering by the Commission of effectiveness of such registration statement or
document.
"Registrable Securities" shall mean (i) the Common Shares
issuable upon conversion of the Securities purchased by the Holders on the date
hereof pursuant to that certain Preferred Securities Purchase Agreement, dated
as of the date hereof, among the Company, the Trust, VRLP, EOPLP and the GM
Trust; (ii) any Common Shares or other securities issued as (or issuable upon
the conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange by
the Company generally for, or in replacement by the Company generally of, such
Common Shares; and (iii) any securities issued in exchange for such Common
Shares in any merger, combination or reorganization of the Company; provided,
however, that Registrable Securities shall not include any securities which have
theretofore been registered and sold pursuant to the Securities Act or which
have been sold to the public pursuant to Rule 144 or any similar rules
promulgated by the Commission pursuant to the Securities Act, and, provided
further, the Company shall have no obligation under Section 2 or 4 to register
any Registrable Securities of a Holder if the Company shall deliver to the
Holders requesting such registration an opinion of counsel reasonably
satisfactory to such Holders and their counsel to the effect that the proposed
sale or disposition of all of the Registrable Securities for which registration
was requested does not require registration under the Securities Act for a sale
or disposition in a single public sale, and offers to remove any and all legends
restricting transfer from the certificates evidencing such Registrable
Securities. For purposes of this Agreement, a Person will be deemed to be a
Holder of Registrable Securities whenever such Person has the then-existing
right to acquire such Registrable Securities (by conversion, purchase or
otherwise), whether or not such acquisition has actually been effected.
"Rule 144" and "Rule 145" shall mean Rule 144 and Rule 145
promulgated under the Securities Act.
732353.7
3
<PAGE>
"Securities" shall mean the Convertible Preferred Securities
together with the Debentures.
"Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.
"Selling Holders" means, with respect to a specified
registration pursuant to this Agreement, the Holders whose Registrable
Securities are included in such registration.
"Transfer" means and includes the act of selling, giving,
transferring, creating a trust (voting or otherwise), assigning or otherwise
disposing of (other than pledging, hypothecating or otherwise transferring as
security or any transfer upon any merger or consolidation) (and correlative
words shall have correlative meanings); provided however, that any transfer or
other disposition upon foreclosure or other exercise of remedies of a secured
creditor after an event of default under or with respect to a pledge,
hypothecation or other transfer as security shall constitute a Transfer.
"Trust" shall have the meaning set forth in the Preamble.
"Underwriters' Representative" means the managing underwriter,
or, in the case of a co-managed underwriting, the managing underwriter
designated as the Underwriters' Representative by the co-managers.
"Violation" shall have the meaning set forth in Section
8(a)(i).
"VRLP" shall have the meaning set forth in the Preamble.
Section 2. Demand Registration.
(a) Request for Demand Registration. Subject to Sections 2(b),
2(d) and 2(e) below, at any time, if one or more Holders shall make a written
request to the Company (the "Demanding Holders"), the Company shall cause there
to be filed with the Commission a registration statement meeting the
requirements of the Securities Act (a "Demand Registration"), and each Demanding
Holder shall be entitled to have included therein (subject to, as applicable,
Section 10 hereof) all or such number of such Demanding Holder's Registrable
Securities as the Demanding Holder shall report in writing. Any request made
pursuant to this Section 2(a) shall be addressed to the attention of the
secretary of the Company, and shall specify the number of Registrable Securities
to be registered, the intended methods of disposition thereof and that the
request is for a Demand Registration pursuant to this Section 2(a).
Whenever the Company shall have received a demand pursuant to
Section 2(a) to effect the Demand Registration of any Registrable Securities,
the Company shall promptly
732353.7
4
<PAGE>
give written notice of such proposed registration to all Holders of the
Securities, if any. Any such Holder may, within 20 days after receipt of such
notice, request in writing that all of such Holder's Registrable Securities, or
any portion thereof designated by such Holder, be included in the registration
and such request shall not be considered one of the Demand Registrations under
Section 2(a) hereof to which such Holder is entitled.
(b) Limitations on Demand Registrations.
(i) The Company shall be obligated to effect no more
than three Demand Registrations for each Holder. For purposes
of the preceding sentence, registration shall not be deemed to
have been effected (i) unless a registration statement with
respect thereto has become effective, (ii) if after such
registration statement has become effective, such registration
or the related offer, sale or distribution of Registrable
Securities thereunder is interfered with by any stop order,
injunction or other order or requirement of the Commission or
other governmental agency or court for any reason not
attributable to the Selling Holders and such interference is
not thereafter eliminated, or (iii) if the conditions to
closing specified in the underwriting agreement, if any,
entered into in connection with such registration are not
satisfied or waived, other than by reason of a failure on the
part of the Selling Holders. If the Company shall have
complied with its obligations under this Section 2, a right to
demand a registration pursuant to Section 2(a) shall be deemed
to have been satisfied upon the earlier of (x) the date as of
which all of the Registrable Securities included therein shall
have been disposed of pursuant to a registration statement,
and (y) the date as of which such Demand Registration shall
have been Continuously Effective for a period of not less than
270 days ("Minimum Effective Period"), provided no stop order
or similar order, or proceedings for such an order, is
thereafter entered or initiated.
(ii) Notwithstanding the foregoing, the Demand
Registration rights granted to the Holders in Section 2(a) are
subject to the following limitations: (i) each registration in
respect of a Demand Registration must include Registrable
Securities having an aggregate market value of at least
$5,000,000, which market value shall be determined by
multiplying the number of Registrable Securities to be
included in the Demand Registration by the proposed per share
offering price (provided that the limitation set forth in this
clause (i) shall not be in effect at any time the Holders'
Registrable Securities are not able to be sold under Rule 144
because of the Company's failure to comply with the
information requirements thereunder, unless at such time, the
Company's counsel delivers a written opinion of counsel, which
shall be in a form reasonably satisfactory to such Holders'
counsel, to such Holders to the effect that such Holders'
Registrable Securities may be publicly offered and sold
without registration under the Act); (ii) the Company shall
not be required to
732353.7
5
<PAGE>
cause a registration pursuant to Section 2(a) to be declared
effective within a period of 120 days after the effective date
of any registration statement of the Company effected in
connection with a Demand Registration, provided the Company
has not breached its obligations under Section 2(a); and (iii)
the Company shall not be required to file a registration
statement or to keep a registration statement effective and
current with respect to applicable disclosure requirements if
the negotiation or consummation of a material transaction is
pending or an event has occurred, which negotiation,
transaction or event would require additional disclosure by
the Company in the registration statement of previously
non-public material information which the Company in its good
faith judgment has a bona fide business purpose for keeping
confidential and the nondisclosure of which in the
registration statement might cause the registration statement
to fail to comply with applicable disclosure requirements;
provided, however, that the Company may not delay the filing
of a registration or documents necessary to keep an existing
registration statement effective and current, for such reason
for more than 75 days in any calender year.
(iii) Whenever the Company shall effect a
registration pursuant to this Section 2 in connection with an
underwritten offering by one or more Selling Holders of
Registrable Securities, if the Underwriters' Representative or
Agent advises each such Selling Holder in writing that, in its
opinion, the amount of securities requested to be included in
such offering (whether by Selling Holders or others) exceeds
the amount which can be sold in such offering within a price
range acceptable to the Majority Selling Holders, Registrable
Securities shall be included in such offering and the related
registration to the extent of the amount which can be sold
within such price range, and on a pro rata based on the
estimated gross proceeds from the sale thereof among all the
Selling Holders and all other securities being registered
pursuant to the exercise of Contractual rights comparable to
the rights granted in Section 4 hereof.
(c) Effective Demand Registration. Following receipt of a
request for a Demand Registration, the Company shall:
(i) File the registration statement with the
Commission as promptly as practicable, and shall use the
Company's best efforts to have the registration declared
effective under the Securities Act as soon as reasonably
practicable, in each instance giving due regard to the need to
prepare current financial statements, conduct due diligence
and complete other actions that are reasonably necessary to
effect a registered public offering; and
(ii) Use the Company's best efforts to keep the
relevant registration statement Continuously Effective for no
less than the Minimum Effective Period or until such earlier
date as of which all the Registrable Securities under the
732353.7
6
<PAGE>
registration statement filed pursuant to the Demand
Registration shall have been disposed of in the manner
described in the registration statement. Notwithstanding the
foregoing, if for any reason the effectiveness of a
registration pursuant to this Section 2 is suspended or such
registration statement shall not be current with respect to
applicable disclosure requirements, the Minimum Effective
Period shall be extended by the aggregate number of days of
such suspension or period of non-compliance.
(d) Restrictions on Public Sale by Holders. Notwithstanding
anything herein to the contrary, the Company shall have the right from time to
time to require the Holders not to effect any public sale or public distribution
of any Registrable Securities under a registration statement filed pursuant to a
Demand Registration during the period starting with the date 30 days prior to
the Company's good faith estimate, as certified in writing by an executive
officer of the Company to the Holders, of the proposed date of filing of a
registration statement or a prospectus supplement under an effective primary
shelf registration statement on file pursuant to Rule 415 promulgated under the
Securities Act relating to an underwritten public offering of equity securities
of the Company for the account of the Company, and ending on the date sixty (60)
days following the effective date of such registration or the date of such
prospectus supplement, provided, however, the Company may not restrict the
Holders' ability to publicly sell or distribute Registrable Securities for such
reason more than one time in any calendar year. Notwithstanding the foregoing,
if the Company shall restrict the public sale or distribution in accordance with
the foregoing, the Minimum Effective Period shall be extended by the aggregate
number of days of such period of restriction.
(e) Form of Registration Statement. A registration pursuant to
this Section 2 shall be on such appropriate registration form of the Commission
as shall (i) be selected by the Company and be reasonably acceptable to the
Majority Selling Holders, and (ii) permit the disposition of the Registrable
Securities in accordance with the intended method or methods of disposition
specified in the request pursuant to Section 2(a).
(f) Selection of Underwriters. If any registration pursuant to
Section 2(a) involves an underwritten offering (whether on a "firm," "best
efforts" or "all reasonable efforts" basis or otherwise), or an agented
offering, the Majority Selling Holders shall have the right to select the
underwriter or underwriters and manager or managers to administer such
underwritten offering or the placement agent or agents for such agented
offering; provided, however, that each Person so selected shall be reasonably
acceptable to the Company.
Section 3. Registration Procedures.
(a) Obligations of the Company. Whenever required under
Section 2 to effect a Demand Registration of any Registrable Securities, the
Company shall, as expeditiously as practicable:
732353.7
7
<PAGE>
(i) Prepare and file with the Commission a
registration statement with respect to such Registrable
Securities (which registration statement shall be available
for the Selling Holders' intended method of distribution and
shall comply in all material respects with the requirements of
the applicable form and include all financial statements
required by the Commission to be filed therewith) and use the
Company's best efforts to cause such registration statement to
become effective.
(ii) Notify each Selling Holder when the registration
statement and any post-effective amendments thereto are
declared effective.
(iii) Respond as promptly as practicable to any
comments received by the Commission with respect to the
registration statement and, subject to clause (iii) of Section
2(b)(ii), prepare and file with the Commission such amendments
and supplements to such registration statement and the
prospectus used in connection with such registration statement
or any document incorporated therein by reference or file any
other required document as may be necessary to comply with the
provisions of the Securities Act and rules thereunder with
respect to the disposition of all securities covered by such
registration statement and the instructions applicable to the
registration form used by the Company. If the registration is
for an underwritten offering, the Company shall amend the
registration statement or supplement the prospectus whenever
required by the terms of the underwriting agreement entered
into pursuant to Section 3(a)(vi). In the event that any
Registrable Securities included in a registration statement
subject to, or required by, this Agreement remain unsold at
the end of the period during which the Company is obligated to
use its best efforts to maintain the effectiveness of such
registration statement, the Company may file a post-effective
amendment to the registration statement for the purpose of
removing such securities from registered status.
(iv) Furnish to each Selling Holder of Registrable
Securities, without charge, such numbers of copies of the
registration statement, any pre-effective or post-effective
amendment thereto, the prospectus, including each preliminary
prospectus and any amendments or supplements thereto, in each
case in conformity with the requirements of the Securities Act
and the rules thereunder, and such other related documents as
any such Selling Holder may reasonably request in order to
facilitate the disposition of Registrable Securities owned by
such Selling Holder.
(v) Use the Company's best efforts (i) to register
and qualify the securities covered by such registration
statement under such other securities or Blue Sky laws of such
states or jurisdictions as shall be reasonably requested by
the Underwriters' Representative or Agent (as applicable, or
if inapplicable, any
732353.7
8
<PAGE>
Selling Holder) and to keep such qualification effective
during the period such registration statement is effective,
and (ii) to obtain the withdrawal of any order suspending the
effectiveness of a registration statement, or the lifting of
any suspension of the qualification (or exemption from
qualification) of the offer and transfer of any of the
Registrable Securities in any jurisdiction, at the earliest
possible moment; provided, however, that the Company shall not
be required in connection therewith or as a condition thereto
to qualify to do business, subject itself to taxation in any
such jurisdiction, or to file a general consent to service of
process in any such states or jurisdictions.
(vi) In the event of any underwritten or agented
offering, enter into and perform the Company's obligations
under an underwriting or agency agreement (including
indemnification and contribution obligations of underwriters
or agents and representations and warranties by the Company to
the Selling Holders and the underwriters), in usual and
customary form, with the managing underwriter or underwriters
of or agents for such offering and use reasonable best efforts
to obtain executed lock-up agreements from the officers and
directors of the Company and from the holders of more than 5%
of the Company's equity securities, if requested by the
underwriters. The Company shall also cooperate with the
Majority Selling Holders and the Underwriters' Representative
or Agent for such offering in the marketing of the Registrable
Shares, including making available the Company's officers,
accountants, counsel, premises, books and records for such
purpose, but the Company shall not be required to incur any
material out-of-pocket expense pursuant to this sentence.
(vii) Promptly notify each Selling Holder of any stop
order issued or threatened to be issued by the Commission in
connection therewith and take all reasonable actions required
to prevent the entry of such stop order or to remove it if
entered.
(viii) Promptly notify each Selling Holder of the
happening of any transaction or event during the period a
registration statement is effective which is of a type
specified in clause (iii) of Section 2(b)(ii) hereof or as a
result of which such registration statement or the related
prospectus contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein
or necessary to make the statements therein in light of the
circumstances under which they were made (in the case of the
prospectus), not misleading.
(ix) Make generally available to the Company's
security holders copies of an earnings statement satisfying
the provisions of Section 11(a) of the Securities Act no later
than 90 days following the end of the 12-month period
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beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of each
registration statement filed pursuant to this Agreement.
(x) Make available for inspection by any Selling
Holder, any underwriter participating in such offering and the
representatives of such Selling Holder and Underwriter (but
not more than one firm of counsel to such Selling Holders),
all financial and other information as shall be reasonably
requested by them, and provide the Selling Holder, any
underwriter participating in such offering and the
representatives of such Selling Holder and Underwriter the
opportunity to discuss the business affairs of the Company
with its principal executives and independent public
accountants who have certified the audited financial
statements included in such registration statement, in each
case all as necessary to enable them to exercise their due
diligence responsibility under the Securities Act; provided,
however, that information that the Company determines, in good
faith, to be confidential and which the Company advises such
Person in writing is confidential shall not be disclosed
unless such Person signs a confidentiality agreement
reasonably satisfactory to the Company or the related Selling
Holder of Registrable Securities agrees to be responsible for
such Person's breach of confidentiality on terms reasonably
satisfactory to the Company.
(xi) Use the Company's best efforts to obtain a
so-called "comfort letter" from its independent public
accountants, and legal opinions of counsel to the Company
addressed to the Selling Holders, in customary form and
covering such matters of the type customarily covered by such
letters, and in a form that shall be reasonably satisfactory
to Majority Selling Holders. The Company shall furnish to each
Selling Holder a signed counterpart of any such comfort letter
or legal opinion. Delivery of any such opinion or comfort
letter shall be subject to the recipient furnishing such
written representations or acknowledgments as are customarily
provided by selling shareholders who receive such comfort
letters or opinions.
(xii) Provide and cause to be maintained a transfer
agent and registrar for all Registrable Securities covered by
such registration statement from and after a date not later
than the effective date of such registration statement.
(xiii) Use all reasonable efforts to cause the
Registrable Securities covered by such registration statement
(i) if such securities are then listed on a securities
exchange or included for quotation in a recognized trading
market, to continue to be so listed or included for a
reasonable period of time after the offering, and (ii) to be
registered with or approved by such other United States or
state governmental agencies or authorities as may be necessary
by virtue of
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the business and operations of the Company to enable the
Selling Holders of Registrable Securities to consummate the
disposition of such Registrable Securities.
(xiv) Use the Company's reasonable efforts to provide
a CUSIP number for the Registrable Securities prior to the
effective date of the first registration statement including
Registrable Securities.
(xv) Take such other actions as are reasonably
required in order to expedite or facilitate the disposition of
Registrable Securities included in each such registration.
(b) Holders' Obligations. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to Sections 2 and 3
hereof with respect to the Registrable Securities of any Selling Holder of
Registrable Securities that such Selling Holder shall furnish to the Company
such information regarding such Selling Holder, the number of the Registrable
Securities owned by it, and the intended method of disposition of such
Registrable Securities as shall be required to effect the registration of such
Selling Holder's Registrable Securities, and to cooperate with the Company in
preparing such registration.
Section 4. Piggyback Registration.
(a) Request for Piggyback Registration. If at any time the
Company proposes to register (including for this purpose a registration effected
by the Company for shareholders of the Company other than the Holders) equity
securities under the Securities Act in connection with the public offering
solely for cash on Form S-1, S-2, S-3 or S-11 (as requested) (or any replacement
or successor forms) other than a registration of securities for a delayed
offering pursuant to Rule 415 promulgated under the Securities Act, the Company
shall promptly give each Holder of Registrable Securities written notice of such
registration (a "Piggyback Registration"). Upon the written request of each
Holder given within 20 days following the date of such notice, the Company shall
cause to be included in such registration statement and use its best efforts to
be registered under the Securities Act and included in any underwriting all the
Registrable Securities that each such Holder shall have requested to be
registered. The Company shall have the absolute right to withdraw or cease to
prepare or file any registration statement for any offering referred to in this
Section 4 without any obligation or liability to any Holder.
(b) Limitations on Piggyback Registrations. The Company shall
not be required to include any Holder's Registrable Securities in any
underwriting unless such Holder accepts the terms of the underwriting as agreed
upon between the Company and the underwriters selected by it, provided that such
Holder shall be entitled to the same pricing terms. If the Underwriters'
Representative or Agent shall advise the Company in writing (with a copy to each
Selling Holder) that, in its opinion, the amount of Registrable Securities
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requested to be included in such registration would materially adversely affect
such offering, or the timing thereof, then the Company will include in such
registration, to the extent of the amount and class which the Company is so
advised can be sold without such material adverse effect in such offering (i)
the securities proposed to be sold by the Company for its own account; (ii) the
Registrable Securities requested to be included in such registration by Holders
pursuant to this Section 4; and (iii) all other securities being registered
pursuant to the exercise of contractual rights comparable to the rights granted
in this Section 4, pro rata based on the estimated gross proceeds from the sale
thereof.
Section 5. Agreements of Selling Holder. In connection with
any registration pursuant to Section 2 or 4 hereof, each Selling Holder agrees,
as applicable:
(i) to execute the underwriting agreement, if any,
agreed to by the Majority Selling Holders or the Company, as
the case may be;
(ii) that it will not offer or sell its Registrable
Securities under the registration statement until it has
received copies of the supplemented or amended Prospectus
contemplated by Section 3(a)(iii) hereof and receives notice
that any post-effective amendment (if required) has become
effective; and
(iii) that upon receipt of any notice from the
Company of the happening of any transaction or event of the
kind described in Section 3(a)(viii) hereof, such Holder will
forthwith discontinue disposition of Registrable Securities
pursuant to a registration statement until the Holder receives
copies of the supplemented or amended Prospectus contemplated
by Section 3(a)(iii) hereof and receives notice that any
post-effective amendment (if required) has become effective,
and, if so directed by the Company, the Holder will deliver to
the Company (at the expense of the Company) all copies in its
possession, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such
Registrable Securities current immediately preceding the time
of receipt of such notice.
Section 6. Limitations or Subsequent Registration Rights. From
and after the date of this Agreement, the Company shall not, without the prior
written consent of the Holders of a majority of the outstanding Registrable
Securities, enter into any agreement with any holder or prospective holder of
any securities of the Company which would allow such holder or prospective
holder (a) to include such securities in any registration filed under Section 2
or 4 hereof, unless under the terms of such agreement, such holder or
prospective holder may include such securities in any such registration only to
the extent that the inclusion of his securities will not reduce the amount of
the Registrable Securities of the Holders which is included, or (b) to make a
demand registration which could result in such registration statement being
declared effective within a period of 120 days of the effective date of any
registration effected in connection with a Demand Registration. From and after
the date of this
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Agreement, if the Company shall enter into any agreement with any holder or
prospective holder of any securities of the Company which would allow such
holder or prospective holder to make a demand registration that the Company
would be obligated to keep Continuously Effective until all securities subject
of such registration have been disposed of (such registration, an "Evergreen
Registration"), the Company thereupon shall be obligated to make an Evergreen
Registration on behalf of and at the request of any Holder and include therein
all Registrable Securities then owned by such Holder, which such registration
shall be subject to and governed by the provisions of Sections 2 and 3 to the
extent a Demand Registration is governed thereby .
Section 7. Expenses of Registration. Expenses in connection
with registrations pursuant to this Agreement shall be allocated and paid as
follows with respect to each Demand Registration or Piggyback Registration; the
Company shall bear and pay all expenses incurred in connection with any
registration, filing, or qualification of Registrable Securities with respect to
such Demand Registrations or Piggyback Registration for each Selling Holder
(which right to payment by the Company may be assigned to any Person to whom
Registrable Securities are Transferred as permitted by Section 9), including all
registration, exchange listing, accounting, filing and NASD fees, all fees and
expenses of complying with securities or Blue Sky laws, all word processing,
duplicating and printing expenses, messenger and delivery expenses, the
reasonable fees and disbursements of counsel for the Company, and of the
Company's independent public accountants, including the expenses of "cold
comfort" letters required by or incident to such performance and compliance,
and, with respect to Demand Registrations, the reasonable fees and disbursements
of one firm of counsel for the Selling Holders of Registrable Securities
(selected by Demanding Holders owning a majority of the Registrable Securities
owned by Demanding Holders to be included in a Demand Registration), but
excluding underwriting discounts and commissions relating to Registrable
Securities (which shall be paid on a pro rata basis by the Selling Holders),
provided, however, that the Company shall not be required to pay for any
expenses of any registration proceeding begun pursuant to Section 2 if the
registration is subsequently withdrawn at the request of the Majority Selling
Holders (in which case all Selling Holders and any other Holders of Registrable
Securities to be included in the registration shall bear such expense pro rata
according to their number of shares requested to be registered), unless Holders
whose Registrable Securities constitute a majority of the Registrable Securities
then outstanding agree that such withdrawn registration shall constitute one of
the Demand Registrations under Section 2(a) hereof.
Section 8. Indemnification; Contribution.
(a) Indemnification by the Company. If any Registrable
Securities are included in a registration statement under this Agreement:
(i) To the extent permitted by applicable law, the
Company shall indemnify and hold harmless each Selling Holder,
each Person, if any, who
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controls such Selling Holder within the meaning of the
Securities Act, and each officer, director, trustee, partner,
and employee of such Selling Holder and such controlling
Person, against any and all losses, claims, damages,
liabilities and expenses (joint or several), including
attorneys' fees and disbursements and expenses of
investigation, incurred by such party pursuant to any actual
or threatened action, suit, proceeding or investigation, or to
which any of the foregoing Persons may become subject under
the Securities Act, the Exchange Act or other federal or state
laws, insofar as such losses, claims, damages, liabilities and
expenses arise out of or are based upon any of the following
statements, omissions or violations (collectively, a
"Violation"):
(A) Any untrue statement or alleged untrue
statement of a material fact contained in such registration
statement, including any preliminary prospectus or final
prospectus contained therein, or any amendments or supplements
thereto or any document incorporated by reference therein;
(B) The omission or alleged omission to
state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading; or
(C) Any violation or alleged violation by
the Company of the federal securities laws any applicable
state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any applicable
state securities law;
provided, however, that the indemnification required by this Section 8(a) shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or expense if such settlement is effected without the consent of the
Company, which consent shall not be unreasonably withheld, nor shall the Company
be liable in any such case for any such loss, claim, damage, liability or
expense to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished to
the Company by the indemnified party expressly for use in connection with such
registration; provided, further, that the indemnity agreement contained in this
Section 8(a) shall not apply to any underwriter to the extent that any such loss
is based on or arises out of an untrue statement or alleged untrue statement of
a material fact, or an omission or alleged omission to state a material fact,
contained in or omitted from any preliminary prospectus if the final prospectus
shall correct such untrue statement or alleged untrue statement, or such
omission or alleged omission, and a copy of the final prospectus has not been
sent or given to such Person at or prior to the confirmation of sale to such
Person if such underwriter was under an obligation to deliver such final
prospectus and failed to do so. The Company shall also indemnify underwriters
participating in the distribution of the Registrable Securities, their officers,
directors, agents and employees and each Person who controls such Persons
(within
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the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) to the same extent as provided above with respect to the indemnification of
the Selling Holders.
(b) Indemnification by Holder. If any of a Selling Holder's
Registrable Securities are included in a registration statement under this
Agreement, to the extent permitted by applicable law, such Selling Holder shall
indemnify and hold harmless the Company, each of its directors, each of its
officers who shall have signed the registration statement, each Person, if any,
who controls the Company within the meaning of the Securities Act, any other
Selling Holder, any controlling Person of any such other Selling Holder and each
officer, director, partner, and employee of such other Selling Holder and such
controlling Person, against any and all losses, claims, damages, liabilities and
expenses (joint and several), including attorneys' fees and disbursements and
expenses of investigation, incurred by such party pursuant to any actual or
threatened action, suit, proceeding or investigation, or to which any of the
foregoing Persons may otherwise become subject under the Securities Act, the
Exchange Act or other federal or state laws, insofar as such losses, claims,
damages, liabilities and expenses arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that such Violation is based
on or arises from written information furnished by such Selling Holder to the
Company expressly for use in connection with such registration; provided,
however, that (x) the indemnification required by this Section 8(b) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or expense if settlement is effected without the consent of the relevant Selling
Holder of Registrable Securities, which consent shall not be unreasonably
withheld, and (y) in no event shall the amount of any indemnity under this
Section 8(b) exceed the gross proceeds from the applicable offering received by
such Selling Holder. In no event shall a Holder be jointly liable with any other
Holder as a result of its indemnification obligations.
(c) Conduct of Indemnification Proceedings. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, suit, proceeding, investigation or threat thereof
made in writing for which such indemnified party may make a claim under this
Section 8, such indemnified party shall deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties. The
failure to deliver written notice to the indemnifying party within a reasonable
time following the commencement of any such action, if not otherwise known by
the Company and materially prejudices or results in forfeiture of substantial
rights or defenses shall relieve such indemnifying party of any liability to the
indemnified party under this Section 8 but shall not relieve the indemnifying
party of any liability that it may have to any indemnified party otherwise than
pursuant to this Section 8. Any fees and expenses incurred by the indemnified
party (including any fees and expenses incurred in connection with investigating
or preparing to defend such action or proceeding) shall be paid to the
indemnified party, as incurred, within thirty (30) days of written notice
thereof to the indemnifying party (regardless of whether it is ultimately
determined that an
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indemnified party is not entitled to indemnification hereunder). Any such
indemnified party shall have the right to employ separate counsel in any such
action, claim or proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be the expenses of such indemnified
party unless (i) the indemnifying party has agreed to pay such fees and
expenses, (ii) the indemnifying party shall have failed to promptly assume the
defense of such action, claim or proceeding, or (iii) the named parties to any
such action, claim or proceeding (including any impleaded parties) include both
such indemnified party and the indemnifying party, and such indemnified party
shall have been advised by counsel that there may be one or more legal defenses
available to it which are different from or in addition to those available to
the indemnifying party and that the assertion of such defenses would create a
conflict of interest such that counsel employed by the indemnifying party could
not faithfully represent the indemnified party (in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such
action, claim or proceeding on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall not, in connection with
any one such action, claim or proceeding or separate but substantially similar
or related actions, claims or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one additional firm of attorneys (together with
appropriate local counsel) at any time for all such indemnified parties, unless
in the reasonable judgment of such indemnified party a conflict of interest may
exist between such indemnified party and any other of such indemnified parties
with respect to such action, claim or proceeding, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels). No indemnifying party shall be liable to an
indemnified party for any settlement of any action, proceeding or claim without
the written consent of the indemnifying party, which consent shall not be
unreasonably withheld.
(d) Contribution. If the indemnification required by this
Section 8 from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to in this Section 8:
(i) The indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses in such proportion as
is appropriate to reflect the relative fault of the
indemnifying party and indemnified parties in connection with
the actions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such
indemnifying party and indemnified parties shall be determined
by reference to, among other things, whether any Violation has
been committed by, or relates to information supplied by, such
indemnifying party or indemnified parties, and the parties'
relative intent, knowledge, access to information and
opportunity to correct or prevent such Violation. The amount
paid or payable by a party as a result of the losses,
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claims, damages, liabilities and expenses referred to above
shall be deemed to include, subject to the limitations set
forth in Section 8(a) and Section 8(b), any legal or other
fees or expenses reasonably incurred by such party in
connection with any investigation or proceeding.
(ii) The parties hereto agree that it would not be
just and equitable if contribution pursuant to this Section
8(d) were determined by pro rata allocation or by any other
method of allocation which does not take into account the
equitable considerations referred to in Section 8(d)(i). No
Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation.
(e) Full Indemnification. If indemnification is available
under this Section 8, the indemnifying parties shall indemnify each indemnified
party to the full extent provided in this Section 8 without regard to the
relative fault of such indemnifying party or indemnified party or any other
equitable consideration referred to in Section 8(d)(i).
(f) Survival. The obligations of the Company and the Selling
Holders of Registrable Securities under this Section 8 shall survive the
completion of any offering of Registrable Securities pursuant to a registration
statement under this agreement, and otherwise.
Section 9. Transfer of Registration Rights. Rights with
respect to Registrable Securities may be Transferred as follows: all rights of a
Holder with respect to Registrable Securities pursuant to this Agreement may be
Transferred by such Holder to any Person in connection with the Transfer of
Registrable Securities to such Person, in all cases, if the transferor or
transferee shall have delivered to the secretary of the Company, reasonably
promptly following the date of the Transfer, written notification of such
Transfer setting forth the name of the transferor, name and address of the
transferee, and the number of Registrable Securities which shall have been so
Transferred.
Section 10. Covenants of the Company. The Company hereby
agrees and covenants as follows:
(a) Exchange Act Filings. The Company shall file as and when
applicable, on a timely basis, all reports required to be filed by it under the
Exchange Act. If the Company is not required to file reports pursuant to the
Exchange Act, upon the request of any Holder of Registrable Securities, the
Company shall make publicly available the information specified in subparagraph
(c)(2) of Rule 144. The Company shall take such further action as may be
reasonably required from time to time and as may be within the reasonable
control of the Company, to enable the Holders to Transfer Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 or any similar rule or regulation hereafter
adopted by the Commission.
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In connection with any sale, transfer or other disposition by
a Holder of any Registrable Securities pursuant to Rule 144, the Company shall
cooperate with such Holder to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not bearing any
Securities Act legend, and enable certificates for such Registrable Securities
to be for such number of shares and registered in such names as the Holder may
reasonably request at least two business days prior to any sale of Registrable
Securities.
(b) Merger, Consolidations and Sale of Assets. The Company
shall not, directly or indirectly, (x) enter into any merger, consolidation or
reorganization in which the Company shall not be the surviving corporation or
(y) Transfer or agree to Transfer all or substantially all the Company's assets,
unless prior to such merger, consolidation, reorganization or asset Transfer,
the surviving corporation or the transferee, respectively, shall have agreed in
writing to assume the obligations of the Company under this Agreement, and for
that purpose references hereunder to "Registrable Securities" shall be deemed to
include the securities which the Holders of Registrable Securities would be
entitled to receive in exchange for Registrable Securities pursuant to any such
merger, consolidation or reorganization.
Section 11. Miscellaneous.
(a) Amendments and Waivers.
(i) The provisions of this Agreement, including the
provisions of this Section 11(a), may not be amended, modified
or supplemented, and waivers or consents to departures from
the provisions hereof may not be given without the written
consent of the Company and the Holders.
(ii) Notice of any amendment, modification or
supplement to this Agreement adopted in accordance with this
Section 11 shall be provided by the Company to the Holders at
least thirty (30) days prior to the effective date of such
amendment, modification or supplement.
(b) Notices. All notices or other communications under this
Agreement shall be sufficient if in writing and delivered by hand or sent by
telecopy, or sent, postage prepaid by registered, certified or express mail, or
by recognized overnight air courier service and shall be deemed given when so
delivered by hand or telecopied, or if mailed or sent by overnight courier
service, on the third Business Day after mailing (one Business Day in the case
of express mail or overnight courier service) to the parties at the following
addresses:
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(i) if to VRLP, to:
Vornado Realty L.P.
c/o Vornado Realty Trust
Park 80 West Plaza II
Saddlebrook, New Jersey 07663
Attention: Joseph Macnow
Executive Vice President, Finance and
Administration
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Alan J. Sinsheimer
and:
(ii) if to EOPLP, to:
EOP Operating Limited Partnership
Two North Riverside Plaza
Chicago, Illinois 60606
To the attention of each of: Stanley M. Stevens
Richard D. Kincaid
with a copy to:
Rosenberg & Liebentritt, P.C.
Two North Riverside Plaza, Suite 1600
Chicago, Illinois 60606
Attention: Jonathan Wasserman
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(iii) if to the GM Trust, to:
Mellon Bank N.A., as trustee for
General Motors Hourly-
Rate Employes Pension Trust
Mellon Bank N.A., as trustee for
General Motors Salaried
Employes Pension Trust
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258-0001
Attention: Bernadette Rist,
Legal Department
with a copy to:
Weil, Gotshal & Manges, LLP
767 Fifth Avenue
New York, New York 10153
Attention: Gerald S. Backman, P.C.
(iv) if to the Company, to:
Capital Trust
605 Third Avenue,
26th Floor,
New York, New York 10016
Attention: John R. Klopp
with a copy to:
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attention: Thomas E. Kruger
or at such other address as the addressee may have furnished in writing to the
sender as provided herein.
(c) Successors, Assigns and Transferees.
(i) This Agreement shall inure to the benefit of and
be binding upon the successors, assigns and transferees of
each of the parties.
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(ii) If any successor, assignee or transferee of the
Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable
Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable
Securities such Person shall be entitled to receive the
benefits hereof and shall be conclusively deemed to have
agreed to be bound by all of the terms and provisions hereof.
(iii) The term "successor, assignee or transferee of
a Holder" shall include any Person that acquires Registrable
Securities by operation of law, including upon the merger or
consolidation, liquidation or dissolution of the Holder.
(d) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(e) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(f) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
(g) Specific Performance. The parties hereto acknowledge that
there would be no adequate remedy at law if any party fails to perform any of
its obligations hereunder, and accordingly agree that each party, in addition to
any other remedy to which it may be entitled at law or in equity, shall be
entitled to compel specific performance of the obligations of any other party
under this Agreement in accordance with the terms and conditions of this
Agreement in any court of the United States or any State thereof having
jurisdiction.
(h) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
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IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement, or caused this Agreement to be duly executed on its behalf, as of the
date first written above.
CAPITAL TRUST
By: /s/ John R. Klopp
----------------------------------------
Name: John R. Klopp
Title: Chief Executive Officer
EOP OPERATING LIMITED PARTNERSHIP
By: Equity Office Properties Trust, its general partner
By: /s/ Debra L. Ferruzzi
-----------------------------------
Name: Debra L. Ferruzzi
Title: Senior Vice President
VORNADO REALTY L.P.
By: Vornado Realty Trust, its general partner
By: /s/ Michael D. Fascitelli
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Name: Michael D. Fascitelli
Title: President
MELLON BANK, N.A., as trustee for
General Motors Hourly-Rate Employes Pension Trust
By: /s/ Bernadette Rist
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Name: Bernadette Rist
Title: Authorized Signatory
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MELLON BANK, N.A., as trustee for
General Motors Salaried Employes Pension Trust
By: /s/ Bernadette Rist
---------------------------------------
Name: Bernadette Rist
Title: Authorized Signatory
732353.7
23
<PAGE>
EXHIBIT 99.1
[N E W S R E L E A S E]
CAPITAL TRUST
Two North Riverside Plaza, Suite 600
Chicago, Illinois 60606
(312) 454-9886
(312) 454-0614 (fax)
CONTACT: Cindy McHugh FOR IMMEDIATE RELEASE
(312) 466-3779 JULY 29, 1998
CAPITAL TRUST COMPLETES $150 MILLION OFFERING
Private Placement with Vornado Realty Trust, Equity Office Properties Trust
& General Motors Investment Management Corporation
NEW YORK, NY - JULY 29, 1998 - Capital Trust (NYSE: CT) today announced
that it has completed the private placement of $150 million aggregate
liquidation amount of 8.25% Step Up Convertible Trust Preferred Securities,
$1,000 liquidation preference per share. Vornado Realty Trust (NYSE: VNO),
Equity Office Properties Trust (NYSE: EOP) and General Motors Investment
Management Corp. (GMIMCo), on behalf of certain General Motors Pension Trusts,
each made a $50 million investment.
The Company received gross proceeds of $150 million, which will
initially be used to pay down borrowings under the Company's credit facilities.
The trust preferred shares are convertible at any time by the holders into the
Company's listed common shares at a conversion price of $11.70, reflecting a 30
percent conversion premium over Capital Trust's common share price at the close
of business on Friday, July 24, 1998. The trust preferred shares have a 20-year
maturity and are non-callable for five years. The annual dividend will be paid
on September 30 and each calendar quarter thereafter; commencing in year seven,
the dividend will step up 75 basis points per annum. In connection with the
investment, the Company has granted the investors the right to participate in
certain strategic lending opportunities, which the Company believes will further
enhance its business.
The Company also announced that Steven Roth, Vornado's Chairman and
CEO, and Thomas Dobrowski, Managing Director, Real Estate and Alternative
Investments, GMIMCo, have been nominated to its Board of Trustees. Following
their appointment, which is expected at the next regularly scheduled Board
Meeting, the Company's Board will be comprised of ten members.
-more-
744236.1
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"The $150 million investment by Vornado, Equity Office and GMIMCo is a
strong endorsement of Capital Trust's business plan and further enhances our
origination network while creating the opportunity for future business ventures
- - we welcome all three parties as strategic partners," said John Klopp, Capital
Trust's Vice Chairman and CEO. "The additional liquidity provided by their
investment will allow us to keep pace with the abundant lending opportunities
currently in our pipeline as we continue to expand our balance sheet and achieve
scale."
Except for historical information contained herein, the statements in
this press release regarding the Company's business, strategy, portfolio
management and results of operations are forward-looking statements that are
dependent upon certain risks and uncertainties, including those related to the
availability of desirable loan and investment opportunities, the ability to
obtain and maintain targeted levels of leverage and changes in interest rates.
Those and other risks and uncertainties are described in the Company's filings
with the Securities and Exchange Commission, including the Company's Annual
Report on Form 10-K (Item 1- Business).
Capital Trust is a fully integrated, self-managed specialty finance
company focused on the commercial real estate industry. Headquartered in New
York, the Company also provides investment banking and advisory services to
owners and operators of commercial real estate through its wholly owned
subsidiary, Victor Capital Group.
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744236.1
