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As filed with the Securities and Exchange Commission on February 15, 1996
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS
(Exact name of Registrant as specified in its charter)
Ohio 34-6513657
(State of organization) (I.R.S. Employer Identification Number)
55 PUBLIC SQUARE
SUITE 1900
CLEVELAND, OHIO 44113-1937
(216) 781-4030
(Address, including zip code, and
telephone number, including area code,
of Registrant's principal executive
offices)
PAUL F. LEVIN
55 PUBLIC SQUARE
SUITE 1900
CLEVELAND, OHIO 44113-1937
(216) 781-4030
(Name, address, including zip
code, and telephone number,
including area code, of agent
for service)
COPY TO:
Edward J. Schneidman
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box:[x]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.[ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of a prospectus is expected to be made pursuant to Rule 434,
please check the following box:[ ]
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CALCULATION OF REGISTRATION FEE
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Proposed Proposed
maximum maximum
Amount to offering aggregate Amount of
Title of each class of be price per offering registration
securities to be registered registered(1) unit(3) price(3) fee(5)
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<S> <C> <C> <C> <C>
Debt Securities, Shares of Beneficial $200,000,000(2) 100% $200,000,000(4) $68,966
Interest, $1 par value per share,
Preferred Shares of Beneficial
Interest, Debt Securities Warrants,
Preferred Shares Warrants and Shares
Warrants
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<FN>
(1) Includes such indeterminate number of Shares of Beneficial Interest as may be issued upon exercise of Securities Warrants and
such indeterminate amount of Shares of Beneficial Interest as may be issued in exchange for, or upon conversion of, Debt
Securities or Preferred Shares of Beneficial Interest.
(2) Or the equivalent thereof in one or more foreign currencies or composite currencies, including European Currency Units, or if
any Debt Securities or Debt Securities Warrants are issued at an original issue discount, such greater amount as shall
result.
(3) Estimate solely for purposes of calculating the registration fee.
(4) No separate consideration will be received for Shares of Beneficial Interest that are issued in exchange for, or upon
conversion of, Debt Securities or Preferred Shares of Beneficial Interest.
(5) Calculated on the basis of 1/29th of 1% of the proposed maximum aggregate offering price.
</TABLE>
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The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securites has been filed with the
Securities and Exchange Commission. These securites may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any State.
PROSPECTUS
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SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED FEBRUARY 15, 1996
FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS
$200,000,000
DEBT SECURITIES, PREFERRED SHARES,
SHARES AND SECURITIES WARRANTS
First Union Real Estate Equity and Mortgage Investments ("First
Union") may from time to time offer and sell in one or more series (i) its
unsecured senior debt securities (the "Debt Securities"); (ii) Preferred Shares
of Beneficial Interest (the "Preferred Shares"); (iii) Shares of Beneficial
Interest, par value $1.00 per share (the "Shares"); or (iv) warrants to
purchase Debt Securities (the "Debt Securities Warrants"), warrants to purchase
Preferred Shares (the "Preferred Shares Warrants") and warrants to purchase
Shares (the "Shares Warrants"), with an aggregate public offering price of up
to $200,000,000, on terms to be determined by market conditions at the time of
offering. The Debt Securities Warrants, the Preferred Shares Warrants and the
Shares Warrants shall be referred to herein collectively as the "Securities
Warrants." The Debt Securities, Preferred Shares, Shares, and Securities
Warrants (collectively, the "Offered Securities") may be offered separately or
together, in separate series, in amounts and at prices and terms to be set
forth in an accompanying supplement to this Prospectus (each, a "Prospectus
Supplement").
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered will be set forth in the applicable Prospectus
Supplement and will include, where applicable: (i) in the case of Debt
Securities, the specific title, aggregate principal amount, currency, form
(which may be registered or bearer, or certificated or global), authorized
denominations, maturity, rate (or manner of calculation thereof) and time of
payment of interest, terms for redemption at the option of First Union or
repayment at the option of the Holder, any sinking fund provisions and any
conversion provisions, and any initial public offering price, along with any
other relevant specific terms; (ii) in the case of Preferred Shares, the
specific title and stated value, any dividend, liquidation, redemption,
conversion, voting and other rights, and any initial public offering price,
along with any other relevant specific terms; (iii) in the case of Shares, any
initial public offering price, along with any other relevant specific terms;
and (iv) in the case of Securities Warrants, the duration, offering price,
exercise price and detachability, if applicable, along with any other relevant
specific terms. In addition, such specific terms may include limitations on
direct or indirect beneficial ownership and restrictions on transfer of the
Offered Securities, in each case as may be appropriate to preserve the status
of First Union as a real estate investment trust ("REIT") for federal income
tax purposes.
The applicable Prospectus Supplement will also contain information,
where applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Offered
Securities covered by such Prospectus Supplement.
The Offered Securities may be offered directly by First Union, or
through agents designated from time to time by First Union, or to or through
underwriters or dealers, which may include affiliates of the First Union, or
through a combination of the foregoing. If any agents, dealers or underwriters
are involved in the sale of any of the Offered Securities, their names, and any
applicable purchase price, fee, commission or discount arrangement between or
among them, will be set forth, or will be calculable from the information set
forth, in the applicable Prospectus Supplement. See "Plan of Distribution."
No Offered Securities may be sold without delivery of the applicable Prospectus
Supplement describing the method and terms of the offering of such series of
Offered Securities.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
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The date of this Prospectus is February , 1996
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AVAILABLE INFORMATION
First Union is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities
and Exchange Commission (the "Commission"). Reports, proxy material and other
information concerning First Union can be inspected and copied at the offices
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 or at its
regional offices, Citicorp Center, 500 West Madison Street, Chicago, Illinois
60661 and Seven World Trade Center, New York, New York 10048. Copies of such
material can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. First
Union's outstanding Shares are listed on the New York Stock Exchange (the
"NYSE") under the symbol "FUR", and all such reports, proxy material and other
information filed by First Union with the NYSE may be inspected at the offices
of the NYSE at 20 Broad Street, New York, New York 10005.
First Union has filed with the Commission a registration statement on
Form S-3 (together with all amendments and exhibits, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the securities offered hereby. This prospectus
("Prospectus"), which constitutes a part of the Registration Statement, does
not contain all the information set forth in the Registration Statement,
certain items of which are contained in exhibits to the Registration Statement
as permitted by the rules and regulations of the Commission. Statements made
in this Prospectus as to the content of any contract, agreement or other
document referred to are not necessarily complete. With respect to each such
contract, agreement or other document filed or incorporated by reference as an
exhibit to the Registration Statement, reference is made to the exhibit for a
more complete description of the matter involved, and each such statement shall
be deemed qualified in its entirety by such reference.
INCORPORATION BY REFERENCE
The following documents filed by First Union with the Commission
pursuant to the Exchange Act are incorporated by reference in this Prospectus:
(1) First Union's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994;
(2) First Union's Quarterly Reports on Form 10-Q for the quarters
ended September 30, 1995, June 30, 1995 and March 31, 1995 and
on Form 10-Q/A for the quarter ended September 30, 1995;
(3) First Union's Current Report on Form 8-K dated December 22,
1995; and
(4) Description of First Union's Share Purchase Rights included in
the Registration Statement on Form 8-A dated March 30, 1990.
All documents filed by First Union pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering made hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein, or in any other subsequently filed document which
is or is deemed to be incorporated by reference herein, modifies or supersedes
any such statement. Any such statement so modified or superseded will not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
First Union will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the request of such
person, a copy of any of the foregoing documents incorporated herein by
reference (other than the exhibits to such documents unless such exhibits are
specifically incorporated by reference into such documents). Requests should
be directed to First Union Real Estate Equity and Mortgage Investments, 55
Public Square, Suite 1900, Cleveland, Ohio 44113-1937, Attention: Treasurer,
telephone (216) 781-4030.
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FIRST UNION
First Union is a real estate investment trust ("REIT") which
specializes in the ownership of regional enclosed shopping malls and
multi-family apartment complexes in the Southeast, Midwest and Northwest United
States. First Union intends to de-emphasize ownership of office buildings and
to divest them as opportunities present themselves. First Union has, for the
past 34 years, qualified as a REIT for federal income tax purposes and, as
such, is not subject to federal corporate income tax so long as certain
requirements are met, primarily the distribution to shareholders of at least
95% of its taxable income.
First Union's portfolio is diversified by geographical locations,
tenant mix and rental markets. As of September 30, 1995, First Union owned or
leased (under long term ground leases under which First Union is lessee) 16
shopping malls and centers, seven office buildings, eight apartment complexes,
an investment in land under the Huntington Building in Cleveland, Ohio, an
1,100-car parking garage and a 300-car parking facility.
First Union leases space to approximately 1,200 commercial tenants
including well-known shopping mall retailers such as JC Penney, Kmart, Sears,
Montgomery Ward, Wal-Mart and The Limited, and significant office building
occupants such as The Cleveland Electric Illuminating Co., Pittsburgh National
Bank, the City of Cleveland and the State of Oklahoma. First Union is also
landlord to apartment dwellers for nearly 2,300 units.
First Union is a self-administered REIT which employs a full-time
salaried staff. First Union presently net leases 33 of its properties to First
Union Management, Inc. (the "Management Company"), which operates these
properties for its own account as a separate taxable entity. The Management
Company is 100% beneficially owned by First Union's shareholders. For
financial reporting purposes, the financial statements of the Management
Company are combined with those of First Union.
First Union was formed as an Ohio business trust in 1961. First
Union's executive offices are located at 55 Public Square, Suite 1900,
Cleveland, Ohio 44113-1937 and its telephone number is (216) 781-4030.
USE OF PROCEEDS
Unless otherwise described in the Prospectus Supplement which
accompanies this Prospectus, First Union intends to use the net proceeds from
the sale of the Offered Securities for general corporate purposes, which may
include acquisition and development of shopping malls and apartment
communities, investment in co-investment ventures, improvement of the
properties in the portfolio and repayment of secured or unsecured indebtedness.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and
provisions of the Debt Securities to which this Prospectus and any applicable
Prospectus Supplement may relate. The Debt Securities will be issued under one
or more indentures (each an "Indenture") between First Union and a trustee (the
"Indenture Trustee"), each to be dated as of a date prior to the issuance of
the Debt Securities to which it relates. A form of the Indenture has been
filed as an exhibit to the Registration Statement of which this Prospectus is a
part, is incorporated herein by reference and is available as described above
under "Available Information." The Indenture is subject to, and governed by,
the Trust Indenture Act of 1939, as amended (the "TIA"). The statements made
hereunder relating to the Indenture and the Debt Securities to be issued
thereunder are summaries of certain provisions thereof, do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all provisions of the Indenture and such Debt Securities. All section
references appearing herein are to sections of the Indenture, and capitalized
terms used but not defined herein shall have the respective meanings set forth
in the Indenture.
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GENERAL
The Debt Securities will be direct, unsecured and unsubordinated
obligations of First Union and will rank equally with all other unsecured and
unsubordinated indebtedness of First Union. The Indenture provides that the
Debt Securities may be issued without limit as to aggregate principal amount,
in one or more series, in each case as established from time to time in or
pursuant to authority granted by a resolution of the Board of Trustees of First
Union (the "Board of Trustees") or as established in one or more indentures
supplemental to the Indenture. All Debt Securities of one series need not be
issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the Holders of the Debt Securities of such
series, for issuances of additional Debt Securities of such series (Section
301).
<TABLE>
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Reference is made to the Prospectus Supplement relating to the Debt Securities offered thereby for the specific terms of
such Debt Securities, including:
<S> <C>
1. the title of such Debt Securities;
2. the aggregate principal amount of such Debt Securities and any limit on such aggregate principal amount;
3. the date or dates, or the method for determining such date or dates, on which the principal of such Debt
Securities will be payable and the amount of principal payable thereon;
4. the rate or rates (which may be fixed or variable), or the method by which such rate or rates shall be determined,
at which such Debt Securities will bear interest, if any;
5. the date or dates, or the method for determining such date or dates, from which any such interest will accrue, the
Interest Payment Dates on which any such interest will be payable, the Regular Record Dates for such Interest
Payment Dates, or the method by which such dates shall be determined, the Person to whom, and the manner in which,
such interest shall be payable, and the basis upon which interest shall be calculated if other than that of a
360-day year comprised of twelve 30-day months;
6. the place or places where the principal of (and premium or Make-Whole Amount (as defined), if any) and interest
and Additional Amounts, if any, on such Debt Securities will be payable, where such Debt Securities may be
surrendered for registration of transfer or exchange and where notices or demands to or upon First Union in respect
of such Debt Securities and the Indenture may be served;
7. the period or periods within which, the price or prices (including the premium or Make-Whole Amount, if any) at
which, the currency or currencies, currency unit or units or composite currency or currencies in which and the
other terms and conditions upon which such Debt Securities may be redeemed, as a whole or in part, at the option of
First Union, if First Union is to have such an option;
8. the obligation, if any, of First Union to redeem, repay or purchase such Debt Securities pursuant to any sinking
fund or analogous provision or at the option of a Holder thereof, and the period or periods within which, the date
or dates upon which, the price or prices at which, the currency or currencies, currency unit or units or composite
currency or currencies in which, and the other terms and conditions upon which such Debt Securities shall be
redeemed, repaid or purchased, as a whole or in part, pursuant to such obligation;
</TABLE>
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<TABLE>
<S> <C>
9. the percentage of the principal amount at which such Debt Securities will be issued and, if other than the full principal
amount thereof, the portion of the principal amount thereof payable upon declaration of acceleration of the maturity
thereof, or (if applicable) the portion of the principal amount of such Debt Securities which is convertible into Shares,
Preferred Shares or Debt Securities of another series, or the method by which any such portion shall be determined;
10. if other than U.S. dollars, the currency or currencies in which such Debt Securities are denominated and payable, which
may be a foreign currency or units of two or more foreign currencies or a composite currency or currencies, and the terms
and conditions relating thereto;
11. whether the amount of payments of principal of (and premium or Make-Whole Amount, if any) or interest, if any, on such Debt
Securities may be determined with reference to an index, formula or other method (which index, formula or method may, but
need not be, based on a currency, currencies, currency unit or units or composite currency or currencies) and the manner in
which such amounts shall be determined;
12. whether the principal of (and premium or Make-Whole Amount, if any) or interest or Additional Amounts, if any, on such Debt
Securities are to be payable, at the election of First Union or a Holder, in a currency or currencies, currency unit or
units or composite currency or currencies, other than that in which such Debt Securities are denominated or stated to be
payable, the period or periods within which, and the terms and conditions upon which, such election may be made, and the
time and manner of, and identity of the exchange rate agent with responsibility for, determining the exchange rate between
the currency or currencies in which such Debt Securities are denominated or stated to be payable and the currency or
currencies in which such Debt Securities are to be so payable;
13. any additions to, modifications of or deletions from the terms of such Debt Securities with respect to the Events of Default
or covenants set forth in the Indenture;
14. whether such Debt Securities will be issued in certificated or book-entry form;
15. whether such Debt Securities will be in registered or bearer form and, if in registered form, the denominations thereof if
other than $1,000 and any integral multiple thereof and, if in bearer form, the denominations thereof if other than $5,000
and terms and conditions relating thereto;
16. the applicability, if any, of the defeasance and covenant defeasance provisions of Article Fourteen of the Indenture to such
Debt Securities and any provisions in modification thereof, in addition thereto or in lieu thereof;
17. if such Debt Securities are to be issued upon the exercise of Debt Securities Warrants, the time, manner and place for such
Debt Securities to be authenticated and delivered;
18. the terms, if any, upon which Debt Securities may be convertible into Shares, Preferred Shares or Debt Securities of another
series of First Union and the terms and conditions upon which such conversion will be effected, including, without
limitation, the initial conversion price or rate and the conversion period;
19. if convertible, in connection with the preservation of First Union's status as a REIT, any applicable limitations on the
ownership or transferability of the Shares, Preferred Shares or other shares of beneficial interest of First Union into
which such Debt Securities are convertible;
</TABLE>
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<TABLE>
<S> <C>
20. whether and under what circumstances First Union will pay Additional
Amounts as contemplated in the Indenture on such Debt Securities in
respect of any tax, assessment or governmental charge and, if so,
whether First Union will have the option to redeem such Debt
Securities rather than pay such Additional Amounts; and
21. any other terms of such Debt Securities not inconsistent with the
provisions of the Indenture (Section 301).
</TABLE>
The Debt Securities may provide for less than the entire principal
amount thereof to be payable upon declaration of acceleration of the maturity
thereof or bear no interest or bear interest at a rate which at the time of
issuance is below market rates ("Original Issue Discount Securities"). All
material U.S. federal income tax, accounting and other considerations
applicable to Original Issue Discount Securities will be described in the
applicable Prospectus Supplement.
Under the Indenture, First Union will have the ability, in addition to
the ability to issue Debt Securities with terms different from those of Debt
Securities previously issued, without the consent of the Holders, to reopen a
previous issue of a series of Debt Securities and issue additional Debt
Securities of such series.
Except as set forth in the Indenture or in one or more indentures
supplemental thereto, the Indenture will not contain any other provisions that
would limit the ability of First Union to incur indebtedness or that would
afford Holders of Debt Securities protection in the event of a highly leveraged
or similar transaction involving First Union or in the event of a change of
control. However, First Union's By- Laws (the "By-Laws") contain restrictions
on ownership and transfers of the Shares which are designed to preserve First
Union's status as a REIT and, therefore, may act to prevent or hinder a change
of control. See "Description of Shares of Beneficial Interest -- Restriction
on Size of Holdings." Reference is made to the applicable Prospectus Supplement
for information with respect to any deletions from, modifications of or
additions to the Events of Default or covenants of First Union that are
described below, including any addition of a covenant or other provision
providing event risk or similar protection.
DENOMINATIONS
Unless otherwise described in the applicable Prospectus Supplement,
the Debt Securities of any series, other than Debt Securities issued in global
form (which may be in any denomination), will be issuable in denominations of
$1,000 and integral multiples thereof (Section 302).
PRINCIPAL AND INTEREST
Unless otherwise specified in the applicable Prospectus Supplement,
the principal of (and premium or Make-Whole Amount, if any) and interest on any
series of Debt Securities will be payable at the corporate trust office of the
Indenture Trustee, provided that, at the option of First Union, payment of
interest may be made by check mailed to the address of the Person entitled
thereto as it appears in the Security Register or by wire transfer of funds to
such Person at an account maintained within the United States (Sections 301,
305, 306, 307 and 1002).
If any date for the payment of principal or interest falls on a day
that is not a Business Day, the required payment shall be made on the next
Business Day as if it were made on the date such payment was due and no
interest shall accrue on the amount so payable for the period from and after
such date for the payment of principal or interest, as the case may be, through
and including such next Business Day (Section 113). "Business Day" means any
day, other than a Saturday or Sunday, that is neither a legal holiday nor a day
on which banks in the applicable place of payment are required or authorized by
law, regulation or executive order to close. Any interest not punctually paid
or duly provided for on any Interest Payment Date with respect to a Debt
Security ("Defaulted Interest") will forthwith cease to be payable to the
Holder on the applicable Regular Record Date and either may be paid to the
person in whose name such Debt Security is registered at the close of business
on a special record
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date (the "Special Record Date") for the payment of such Defaulted Interest to
be fixed by the Indenture Trustee, notice of which shall be given to the Holder
of such Debt Security not less than 10 days prior to such Special Record Date,
or may be paid at any time in any other lawful manner, all as more completely
described in the Indenture (Section 307).
REGISTRATION AND TRANSFER
Subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series will be exchangeable for
other Debt Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations upon surrender of such
Debt Securities at the corporate trust office of the Indenture Trustee. In
addition, subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series may be surrendered for
conversion or registration of transfer thereof at the corporate trust office of
the Indenture Trustee. Every Debt Security surrendered for conversion or
registration of transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer. No service charge will be made for any
registration of transfer or exchange of any Debt Securities, but First Union
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith (Section 305). First Union may designate
a transfer agent or transfer agents (in addition to the Indenture Trustee) with
respect to any series of Debt Securities. If First Union has designated such a
transfer agent or transfer agents, First Union may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that First Union will be
required to maintain a transfer agent in each Place of Payments for such
series. First Union may at any time designate additional transfer agents with
respect to any series of Debt Securities (Section 1002).
Neither First Union nor the Indenture Trustee shall be required to (i)
issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of the business 15 days before any
selection of Debt Securities of that series to be redeemed and ending at the
close of business on the day of mailing of the relevant notice of redemption;
(ii) register the transfer of or exchange any Debt Security, or portion
thereof, called for redemption, except the unredeemed portion of any Debt
Security being redeemed in part; or (iii) issue, register the transfer of or
exchange any Debt Security which has been surrendered for repayment at the
option of the Holder, except the portion, if any, of such Debt Security not to
be so repaid (Section 305).
MERGER, CONSOLIDATION OR SALE
First Union, without the consent of the Holders of any of the Debt
Securities, may consolidate with, or sell, lease or convey all or substantially
all of its assets to, or merge with or into, any other entity, provided that
(a) either First Union shall be the continuing entity or, the successor entity
(if other than First Union) formed by or resulting from any such consolidation
or merger or which shall have received the transfer of such assets is a Person
organized and existing under the laws of the United States or any state thereof
and shall expressly assume payment of the principal of (and premium or
Make-Whole Amount, if any) and interest (including Additional Amounts, if any)
on all of the Debt Securities and the due and punctual performance and
observance of all of the covenants and conditions contained in the Indenture;
(b) immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of First Union or any Subsidiary as a
result thereof as having been incurred by First Union or such Subsidiary at the
time of such transaction, no Event of Default under the Indenture, and no event
which, after notice or the lapse of time, or both, would become such an Event
of Default, shall have occurred and be continuing; and (c) an officer's
certificate and legal opinion covering such conditions shall be delivered to
the Indenture Trustee (Sections 801 and 803).
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CERTAIN COVENANTS
Existence. Except as permitted under "Merger, Consolidation or Sale,"
First Union will do or cause to be done all things necessary to preserve and
keep in full force and effect the existence, rights (charter and statutory) and
franchises of First Union and its Subsidiaries; provided, however, that First
Union shall not be required to preserve any right or franchise if the Board of
Trustees determines that the preservation thereof is no longer desirable in the
conduct of the business of First Union and its Subsidiaries as a whole and that
the loss thereof is not disadvantageous in any material respect to the Holders
of the Debt Securities (Section 1005).
Maintenance of Properties. First Union will cause all of its
properties used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of First Union may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that First Union and its
Subsidiaries shall not be prevented from selling or otherwise disposing for
value its properties in the ordinary course of business (Section 1006).
Insurance. First Union will, and will cause each of its Subsidiaries
to, keep all of its insurable properties insured against loss or damage at
least equal to their full insurable value with financially sound and reputable
insurance companies (Section 1007).
Payment of Taxes and Other Claims. First Union will pay or discharge
or cause to be paid or discharged, before the same shall become delinquent, (i)
all taxes, assessments and governmental charges levied or imposed upon it or
any Subsidiary or upon the income, profits or property of First Union or any
Subsidiary; and (ii) all lawful claims for labor, materials and supplies which,
if unpaid, might by law become a lien upon the property of First Union or any
Subsidiary; provided, however, that First Union shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings (Section 1008).
Provision of Financial Information. Whether or not First Union is
subject to Section 13 or 15(d) of the Exchange Act, First Union will, to the
extent permitted under the Exchange Act, file with the Commission the annual
reports, quarterly reports and other documents which First Union would have
been required to file with the Commission pursuant to such Section 13 or 15(d)
(the "Financial Statements") if First Union were so subject, such documents to
be filed with the Commission on or prior to the respective dates (the "Required
Filing Dates") by which First Union would have been required so to file such
documents if First Union were so subject. First Union will also in any event
(x) within 15 days of each Required Filing Date (i) transmit by mail to all
holders of Debt Securities, as their names and addresses appear in the Security
Register, without cost to such holders, copies of the annual reports and
quarterly reports which First Union would have been required to file with the
Commission pursuant to Section 13 or 15(d) if First Union were subject to such
sections, and (ii) file with the Indenture Trustee copies of the annual
reports, quarterly reports and other documents which First Union would have
been required to file with the Commission pursuant to Section 13 or 15(d) of
the Exchange Act if First Union were subject to such Sections; and (y) if
filing such documents by First Union with the Commission is not permitted under
the Exchange Act, promptly upon written request and payment of the reasonable
cost of duplication and delivery, supply copies of such documents to any
prospective Holder (Section 1009).
ADDITIONAL COVENANTS AND/OR MODIFICATIONS TO THE COVENANTS DESCRIBED ABOVE
Any additional covenants of First Union and/or modifications to the
covenants described above with respect to any Debt Securities or series
thereof, including any covenants relating to limitations on incurrence of
indebtedness or other financial covenants, will be set forth in the applicable
Indenture or in an indenture supplement thereto and described in the Prospectus
Supplement relating thereto.
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EVENTS OF DEFAULT, NOTICE AND WAIVER
The Indenture provides that the following events are "Events of
Default" with respect to any series of Debt Securities issued thereunder: (a)
default which continues for 30 days in the payment of any installment of
interest or Additional Amounts payable on any Debt Security of such series; (b)
default in the payment of the principal of (or premium or Make-Whole Amount, if
any, on) any Debt Security of such series at its Maturity; (c) default in
making any sinking fund payment as required for any Debt Security of such
series; (d) default in the performance of any other covenant of First Union
contained in the Indenture (other than a covenant added to the Indenture solely
for the benefit of a series of Debt Securities issued thereunder other than
such series), continued for 60 days after written notice as provided in the
Indenture; (e) default in the payment of an aggregate principal amount
exceeding $10,000,000 of any evidence of indebtedness of First Union or any
mortgage, indenture or other instrument under which such indebtedness is issued
or by which such indebtedness is secured, such default having occurred after
the expiration of any applicable grace period and having resulted in the
acceleration of the maturity of such indebtedness, but only if such
indebtedness is not discharged or such acceleration is not rescinded or
annulled; (f) the entry by a court of competent jurisdiction of one or more
judgments, orders or decrees against First Union or any of its Subsidiaries in
an aggregate amount (excluding amounts fully covered by insurance) in excess of
$10,000,000 and such judgments, orders or decrees remain undischarged, unstayed
or unsatisfied in an aggregate amount (excluding amounts fully covered by
insurance) in excess of $10,000,000) for a period of 30 consecutive days; (g)
certain events of bankruptcy, insolvency or reorganization, or court
appointment of a receiver, liquidator or trustee of First Union or any
Significant Subsidiary or for all or substantially all of the property of First
Union or any Significant Subsidiary; and (h) any other Event of Default
provided with respect to a particular series of Debt Securities (Section 501).
If an Event of Default under the Indenture with respect to Debt
Securities of any series at the time Outstanding occurs and is continuing, then
in every such case, unless the principal of all of the Outstanding Debt
Securities of such series shall already have become due and payable, the
Indenture Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Debt Securities of that series may declare the principal (or,
if the Debt Securities of that series are Original Issue Discount Securities or
Indexed Securities, such portion of the principal as may be specified in the
terms thereof) of, and the Make-Whole Amount, if any, on, all of the Debt
Securities of that series to be due and payable immediately by written notice
thereof to First Union (and to the Indenture Trustee if given by the Holders).
However, at any time after such a declaration of acceleration with respect to
Debt Securities of such series has been made, but before a judgment or decree
for payment of the money due has been obtained by the Indenture Trustee, the
Holders of not less than a majority in principal amount of the Outstanding Debt
Securities of such series may rescind and annual such declaration and its
consequences if (a) First Union shall have deposited with the Indenture Trustee
all required payments of the principal of (and premium or Make-Whole Amount, if
any) and interest, and any Additional Amounts, on the Debt Securities of such
series plus certain fees, expenses, disbursements and advances of the Indenture
Trustee and (b) all Events of Default, other than the non-payment of
accelerated principal of (or premium or the Make-Whole Amount, if any) or
interest, with respect to Debt Securities of such series have been cured or
waived as provided in the Indenture (Section 502). The Indenture also provides
that the Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series may waive any past default with
respect to such series and its consequences, except a default (x) in the
payment of the principal of (or premium or Make-Whole Amount, if any) or
interest or Additional Amounts payable on any Debt Security of such series or
(y) in respect to a covenant or provision contained in the Indenture that
cannot be modified or amended without the consent of the Holder of each
Outstanding Debt Security affected thereby (Section 513).
The Indenture Trustee is required to give notice to the Holders of
Debt Securities within 90 days of a default under the Indenture; provided,
however, that the Indenture Trustee may withhold notice to the Holders of any
series of Debt Securities of any default with respect to such series (except a
default in the payment of the principal of (or premium or Make-Whole Amount, if
any) or interest or Additional Amounts payable on any Debt Security of such
series or in the payment of any sinking fund installment in respect of any Debt
Security of such
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<PAGE> 11
series) if the Responsible Officers of the Indenture Trustee consider such
withholding to be in the interest of such Holders (Section 601).
The Indenture provides that no Holders of Debt Securities of any
series may institute any proceedings, judicial or otherwise, with respect to
the Indenture or for any remedy thereunder; except in the case of failure of
the Indenture Trustee, for 60 days, to act after it has received a written
request to institute proceedings in respect of an Event of Default from the
Holders of not less than 25% in principal amount of the Outstanding Debt
Securities of such series, as well as an offer of reasonable indemnity (Section
507). This provision will not prevent, however, any Holder of Debt Securities
from instituting suit for the enforcement of payment of the principal of (and
premium or Make-Whole Amount, if any), interest on and Additional Amounts
payable with respect to, such Debt Securities at the respective due dates
thereof (Section 508).
Subject to provisions in the Indenture relating to its duties in case
of default, the Indenture Trustee is under no obligation to exercise any of its
rights or powers under the Indenture at the request or direction of any Holders
of any series of Debt Securities then outstanding under the Indenture, unless
such Holders shall have offered to the Indenture Trustee reasonable security or
indemnity (Section 602). The Holders of not less than a majority in principal
amount of the Outstanding Debt Securities of any series shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Indenture Trustee, or of exercising any trust or power
conferred upon the Indenture Trustee. However, the Indenture Trustee may
refuse to follow any direction which is in conflict with any law or the
Indenture, which may involve the Indenture Trustee in personal liability or
which may be unduly prejudicial to the Holders of Debt Securities of such
series not joining therein (Section 512).
Within 120 days after the close of each fiscal year, First Union must
deliver to the Indenture Trustee a certificate, signed by one of several
specified officers, stating whether or not such officer has knowledge of any
default under the Indenture and, if so, specifying each such default and the
nature and status thereof (Section 1010).
MODIFICATION OF THE INDENTURE
Modifications and amendments of the Indenture may be made with the
consent of the Holders of not less than a majority in principal amount of all
Outstanding Debt Securities which are affected by such modification or
amendment; provided, however, that no such modification or amendment may,
without the consent of the Holder of each such Debt Security affected thereby,
(a) change the Stated Maturity of the principal of (or premium or Make-Whole
Amount, if any), or any installment of principal of or interest or Additional
Amounts payable on, any such Debt Security; (b) reduce the principal amount of,
or the rate or amount of interest on, or any premium or Make-Whole Amount
payable on redemption of, or any Additional Amounts payable with respect to,
any such Debt Security, or reduce the amount of principal of an Original Issue
Discount Security or Make-Whole Amount, if any, that would be due and payable
upon declaration of acceleration of the maturity thereof or would be provable
in bankruptcy, or adversely affect any right of repayment of the Holder of any
such Debt Security; (c) change the Place of Payment, or the currency or
currencies, for payment of principal of (and premium or Make-Whole Amount, if
any), or interest on, or any Additional Amounts payable with respect to, any
such Debt Security; (d) impair the right to institute suit for the enforcement
of any payment on or with respect to any such Debt Security; (e) reduce the
above-stated percentage of Outstanding Debt Securities of any series necessary
to modify or amend the Indenture, to waive compliance with certain provisions
thereof or certain defaults and consequences thereunder or to reduce the quorum
or voting requirements set forth in the Indenture; or (f) modify any of the
foregoing provisions or any of the provisions relating to the waiver of certain
past defaults or certain covenants, except to increase the required percentage
to effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the Holder of such Debt Security
(Section 902).
The Holders of not less than a majority in principal amount of each
series of Outstanding Debt Securities have the right to waive compliance by
First Union with certain covenants in the Indenture (Section 1012).
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Modifications and amendments of the Indenture may be made by First
Union and the Indenture Trustee without the consent of any Holder of Debt
Securities for any of the following purposes: (i) to evidence the succession
of another Person to First Union as obligor under the Indenture; (ii) to add to
the covenants of First Union for the benefit of the Holders of all or any
series of Debt Securities or to surrender any right or power conferred upon
First Union in the Indenture; (iii) to add Events of Default for the benefit of
the Holders of all or any series of Securities; (iv) to add or change any
provisions of the Indenture to facilitate the issuance of, or to liberalize
certain terms of, Debt Securities in bearer form, or to permit or facilitate
the issuance of Debt Securities in uncertificated form, provided that such
action shall not adversely affect the interests of the Holders of the Debt
Securities of any series in any material respect; (v) to change or eliminate
any provisions of the Indenture, provided that any such change or elimination
shall become effective only when there are no Debt Securities Outstanding of
any series created prior thereto which are entitled to the benefit of such
provision; (vi) to secure the Debt Securities; (vii) to establish the form or
terms of Debt Securities of any series and related coupons, including the
provisions and procedures, if applicable, for the conversion of such Debt
Securities into Shares, Preferred Shares or Debt Securities of another series
of First Union; (viii) to provide for the acceptance of appointment by a
successor Indenture Trustee or facilitate the administration of the trusts
under the Indenture by more than one Indenture Trustee; (ix) to cure any
ambiguity in the Indenture, correct or supplement any provision in the
Indenture which may be defective or inconsistent or make any other changes with
respect to matters or questions arising under the Indenture, provided that such
action shall not adversely affect the interests of Holders of Debt Securities
of any series in any material respect; (x) to close the Indenture with respect
to the authentication and delivery of additional series of Debt Securities or
to qualify, or maintain qualification of, the Indenture under the TIA; or (xi)
to supplement any of the provisions of the Indenture to the extent necessary to
permit or facilitate defeasance and discharge of any series of such Debt
Securities, provided that such action shall not adversely affect the interests
of the Holders of the Debt Securities of any series in any material respect
(Section 901).
The Indenture provides that in determining whether the Holders of the
requisite principal amount of Outstanding Debt Securities of a series have
given any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of Holders of Debt
Securities, (i) the principal amount of an Original Issue Discount Security
that shall be deemed to be outstanding shall be the amount of the principal
thereof that would be due and payable as of the date of such determination upon
declaration of acceleration of the maturity thereof; (ii) the principal amount
of a Debt Security denominated in a Foreign Currency that shall be deemed
outstanding shall be the U.S. dollar equivalent, determined on the issue date
for such Debt Security, of the principal amount (or, in the case of an Original
Issue Discount Security, the U.S. dollar equivalent on the issue date of such
Debt Security of the amount determined as provided in (i) above); (iii) the
principal amount of an Indexed Security that shall be deemed outstanding shall
be the principal face amount of such Indexed Security at original issuance,
unless otherwise provided with respect to such Indexed Security pursuant to
Section 301 of the Indenture; and (iv) Debt Securities owned by First Union or
any other obligor upon the Debt Securities or any Affiliate of First Union or
of such other obligor shall be disregarded (Section 101).
The Indenture contains provisions for convening meetings of the
Holders of Debt Securities of a series (Section 1501). A meeting may be called
at any time by the Indenture Trustee, and also, upon request, by First Union or
the Holders of at least 10% in principal amount of the Outstanding Debt
Securities of such series, in any such case upon notice given as provided in
the Indenture (Section 1502). Except for any consent that must be given by the
Holder of each Debt Security affected by certain modifications and amendments
of the Indenture, any resolution presented at a meeting or adjourned meeting
duly reconvened at which a quorum is present may be adopted by the affirmative
vote of the Holders of a majority in principal amount of the Outstanding Debt
Securities of that series; provided, however, that, except as referred to
above, any resolution with respect to any request, demand, authorization,
direction, notice, consent, waiver or other action that may be made, given or
taken by the Holders of a specified percentage, which is less than a majority,
in principal amount of the Outstanding Debt Securities of a series may be
adopted at a meeting or adjourned meeting duly reconvened at which a quorum is
present by the affirmative vote of the Holders of such specified percentage in
principal amount of the Outstanding Debt Securities of that series. Any
resolution passed or decision taken at any meeting of Holders of Debt
Securities
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of any series duly held in accordance with the Indenture will be binding on all
Holders of Debt Securities of that series. The quorum at any meeting called to
adopt a resolution, and at any reconvened meeting, will be Persons holding or
representing a majority in principal amount of the Outstanding Debt Securities
of a series; provided, however, that if any action is to be taken at such
meeting with respect to a consent or waiver which may be given by the Holders
of not less than a specified percentage in principal amount of the Outstanding
Debt Securities of a series, the Persons holding or representing such specified
percentage in principal amount of the Outstanding Debt Securities of such
series will constitute a quorum (Section 1504).
Notwithstanding the foregoing provisions, if any action is to be taken
at a meeting of Holders of Debt Securities of any series with respect to any
request, demand, authorization, direction, notice, consent, waiver or other
action that the Indenture expressly provides may be made, given or taken by the
Holders of a specified percentage in principal amount of all Outstanding Debt
Securities affected thereby, or of the Holders of such series and one or more
additional series: (i) there shall be no minimum quorum requirement for such
meeting; and (ii) the principal amount of the Outstanding Debt Securities of
such series that vote in favor of such request, demand, authorization,
direction, notice, consent, waiver or other action shall be taken into account
in determining whether such request, demand, authorization, direction, notice,
consent, waiver or other action has been made, given or taken under the
Indenture (Section 1504).
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by the Indenture to be given or taken by a specified
percentage in principal amount of the Holders of any or all series of Debt
Securities may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such specified percentage of Holders in
person or by agent duly appointed in writing; and, except as otherwise
expressly provided in the Indenture, such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee. Proof
of execution of any instrument or of a writing appointing any such agent shall
be sufficient for any purpose of the Indenture and (subject to Article Six of
the Indenture) conclusive in favor of the Indenture Trustee and First Union, if
made in the manner specified above (Section 1507).
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
First Union may discharge certain obligations to Holders of any series
of Debt Securities that have not already been delivered to the Indenture
Trustee for cancellation and that either have become due and payable or will
become due and payable within one year (or scheduled for redemption within one
year) by irrevocably depositing with the Indenture Trustee, in trust, funds in
such currency or currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are payable in an amount sufficient to
pay the entire indebtedness on such Debt Securities in respect of principal
(and premium or Make-Whole Amount, if any) and interest and Additional Amounts
payable to the date of such deposit (if such Debt Securities have become due
and payable) or to the Stated Maturity or Redemption Date, as the case may be
(Section 1401, 1402, 1403 and 1404).
The Indenture provides that, if the provisions of Article Fourteen are
made applicable to the Debt Securities of or within any series pursuant to
Section 301 of the Indenture, First Union may elect either (a) to defease and
be discharged from any and all obligations with respect to such Debt Securities
(except for the obligation to pay Additional Amounts, if any, upon the
occurrence of certain events of tax, assessment or governmental charge with
respect to payments on such Debt Securities and the obligations to register the
transfer or exchange of such Debt Securities, to replace temporary or
mutilated, destroyed, lost or stolen Debt Securities, to maintain an office or
agency in respect of such Debt Securities and to hold moneys for payment in
trust) ("defeasance") (Section 1402) or (b) to be released from its obligations
with respect to such Debt Securities under Section 1004 to 1009, inclusive, of
the Indenture (being the restrictions described under "--Certain Covenants")
and, if provided pursuant to Section 301 of the Indenture, its obligations with
respect to any other covenant, and any omission to comply with such obligations
shall not constitute a default or an Event of Default with respect to such Debt
Securities ("covenant defeasance") (Section 1403), in either case upon the
irrevocable deposit by First Union with the Indenture Trustee, in trust, of an
amount, in such currency or currencies, currency unit or units or composite
currency or currencies
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in which such Debt Securities are payable at Stated Maturity, or Governmental
Obligations (as defined below), or both, applicable to such Debt Securities
which through the scheduled payment of principal and interest in accordance
with their terms will provide money in an amount sufficient to pay the
principal of (and premium or Make-Whole Amount, if any) and interest on such
Debt Securities, and any mandatory sinking fund or analogous payments thereon,
on the scheduled due dates therefor. (Section 1404)
Such a trust may only be established if, among other things, First
Union has delivered to the Indenture Trustee an Opinion of Counsel (as
specified in the Indenture) to the effect that the Holders of such Debt
Securities will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of such defeasance or covenant defeasance and will be
subject to U.S. federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance or covenant
defeasance had not occurred, and such Opinion of Counsel, in the case of
defeasance, must refer to and be based upon a ruling of the Internal Revenue
Service or a change in applicable United States federal income tax law
occurring after the date of the Indenture (Section 1404).
"Government Obligations" means securities which are (i) direct
obligations of the United States of America or the government which issued the
Foreign Currency in which the Debt Securities of a particular series are
payable, for the payment of which its full faith and credit is pledged, or (ii)
obligations of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which issued
the Foreign Currency in which the Debt Securities of such series are payable,
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other government, which, in
either case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank or trust
company as custodian with respect to any such Government Obligation or a
specific payment of interest on or principal of any such Government Obligation
held by such custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the Government
Obligation or the specific payment of interest on or principal of the
Government Obligation evidenced by such depository receipt (Section 101).
Unless otherwise provided in the applicable Prospectus Supplement, if
after First Union has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any
series, (a) the Holder of a Debt Security of such series is entitled to, and
does, elect pursuant to Section 301 of the Indenture or the terms of such Debt
Security to receive payment in a currency, currency unit or composite currency
other than that in which such deposit has been made in respect of such Debt
Security, or (b) a Conversion Event (as defined below) occurs in respect of the
currency, currency unit or composite currency in which such deposit has been
made, the indebtedness represented by such Debt Security shall be deemed to
have been, and will be, fully discharged and satisfied through the payment of
the principal of (and premium or Make-Whole Amount, if any) and interest on
such Debt Security as they become due out of the proceeds yielded by converting
the amount so deposited in respect of such Debt Security into the currency,
currency unit or composite currency in which such Debt Security becomes payable
as a result of such election or such cessation of usage based on the applicable
market exchange rate (Section 1405). "Conversion Event" means the cessation of
use of (i) a currency (other than the ECU or other currency unit) both by the
government of the country which issued such currency and for the settlement of
transactions by a central bank or other public institutions of or within the
international banking community, (ii) the ECU both within the European Monetary
System and for the settlement of transactions by public institutions of or
within the European Communities or (iii) any currency unit or composite
currency other than the ECU for the purposes for which it was established.
In the event First Union effects covenant defeasance with respect to
any Debt Securities and such Debt Securities are declared due and payable
because of the occurrence of any Event of Default other than the Event of
Default described in clause (d) under "--Events of Default, Notice and Waiver"
with respect to Sections 1004 to 1010, inclusive, of the Indenture (which
Sections would no longer be applicable to such Debt Securities) or
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described in clause (f) under "--Events of Default, Notice and Waiver" with
respect to any other covenant as to which there has been covenant defeasance,
the amount in such currency, currency unit or composite currency in which such
Debt Securities are payable, and Government Obligations on deposit with the
Indenture Trustee, will be sufficient to pay amounts due on such Debt
Securities at the time of their Stated Maturity but may not be sufficient to
pay amounts due on such Debt Securities at the time of the acceleration
resulting from such Event of Default. However, First Union would remain liable
to make payment of such amounts due at the time of acceleration.
The applicable Prospectus Supplement may further describe the
provisions, if any, permitting such defeasance or covenant defeasance,
including any modifications to the provisions described above, with respect to
the Debt Securities of or within a particular series.
CONVERSION RIGHTS
The terms and conditions, if any, upon which the Debt Securities are
convertible into Shares, Preferred Shares or Debt Securities of another series
will be set forth in the applicable Prospectus Supplement relating thereto.
Such terms will include whether such Debt Securities are convertible into
Shares, Preferred Shares or Debt Securities of another series, the conversion
price (or manner of calculation thereof), the conversion period, provisions as
to whether conversion will be at the option of the Holders or First Union, the
events requiring an adjustment of the conversion price and provisions affecting
conversion in the event of the redemption of such Debt Securities. To protect
First Union's status as a REIT, a Holder may not convert any Debt Security, and
such Debt Security shall not be convertible by any Holder, if as a result of
such conversion any person would then be deemed to own, directly or indirectly,
more than 9.8% of the Shares.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in
the form of one or more global securities ("Global Securities") that will be
deposited with, or on behalf of, a depository (the "Depository") identified in
the applicable Prospectus Supplement relating to such series. Global
Securities, if any, are expected to be deposited with The Depository Trust
Company, as Depository. Global Securities may be issued in fully registered
form and may be issued in either temporary or permanent form. Unless and until
it is exchanged in whole or in part for the individual Debt Securities
represented thereby, a Global Security may not be transferred except as a whole
by the Depository for such Global Security to a nominee of such Depository or
by a nominee of such Depository to such Depository or another nominee of such
Depository or by the Depository or any nominee of such Depository to a
successor Depository or any nominee of such successor.
The specific terms of the depository arrangement with respect to a
series of Debt Securities will be described in the applicable Prospectus
Supplement relating to such series. Unless otherwise indicated in the
applicable Prospectus Supplement, First Union anticipates that the following
provisions will apply to depository arrangements.
Upon the issuance of a Global Security, the Depository for such Global
Security or its nominee will credit on its book-entry registration and transfer
system the respective principal amounts of the individual Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depository ("Participants"). Such accounts shall be
designated by the underwriters, dealers or agents with respect to such Debt
Securities or by First Union if such Debt Securities are offered and sold
directly by First Union. Ownership of beneficial interests in a Global Security
will be limited to Participants or persons that may hold interests through
Participants. Ownership of beneficial interests in such Global Security will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by the applicable Depository or its nominee (with respect to
beneficial interests of Participants) and records of Participants (with respect
to beneficial interests of persons who hold through Participants). The laws of
some states require that certain purchasers of securities take
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<PAGE> 16
physical delivery of such securities in definitive form. Such limits and laws
may impair the ability to own, pledge or transfer beneficial interest in a
Global Security.
So long as the Depository for a Global Security or its nominee is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Except as provided below or in the applicable Prospectus Supplement,
owners of beneficial interest in a Global Security will not be entitled to have
any of the individual Debt Securities of the series represented by such Global
Security registered in their names, will not receive or be entitled to receive
physical delivery of any such Debt Securities of such series in definitive form
and will not be considered the owners or holders thereof under the Indenture.
Payments of principal of, any premium or Make-Whole Amount and any
interest on, or any Additional Amounts payable with respect to, individual Debt
Securities represented by a Global Security registered in the name of a
Depository or its nominee will be made to the Depository or its nominee, as the
case may be, as the registered owner of the Global Security representing such
Debt Securities. None of First Union, the Indenture Trustee, any Paying Agent
or the Security Registrar for such Debt Securities will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in the Global Security for such Debt
Securities or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
First Union expects that the Depository for a series of Debt
Securities or its nominee, upon receipt of any payment of principal, premium,
Make-Whole Amount or interest in respect of a permanent Global Security
representing any of such Debt Securities, immediately will credit Participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of such Global Security for such Debt
Securities as shown on the records of such Depository or its nominee. First
Union also expects that payments by Participants to owners of beneficial
interests in such Global Security held through such Participants will be
governed by standing instructions and customary practices, as is the case with
securities held for the account of customers in bearer form or registered in
"street name." Such payments will be the responsibility of such Participants.
If a Depository for a series of Debt Securities is at any time
unwilling, unable or ineligible to continue as depository and a successor
depository is not appointed by First Union within 90 days, First Union will
issue individual Debt Securities of such series in exchange for the Global
Security representing such series of Debt Securities. In addition, First Union
may, at any time and in its sole discretion, subject to any limitations
described in the applicable Prospectus Supplement relating to such Debt
Securities, determine not to have any Debt Securities of such series
represented by one or more Global Securities and, in such event, will issue
individual Debt Securities of such series in exchange for the Global Security
or Securities representing such series of Debt Securities. Individual Debt
Securities of such series so issued will be issued in denominations, unless
otherwise specified by First Union, of $1,000 and integral multiples thereof.
NO PERSONAL LIABILITY
No past, present or future Trustee, officer, employee or shareholder,
as such, of First Union or any successor thereof shall have any liability for
any obligations of First Union under the Debt Securities or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder of Debt Securities by accepting such Debt
Securities waives and releases all such liability. The waiver and release are
part of the consideration for the issue of Debt Securities (Section 111).
INDENTURE TRUSTEE
The Indenture provides that there may be more than one Indenture
Trustee thereunder, each with respect to one or more series of Debt Securities.
Any Indenture Trustee under the Indenture may resign or be removed
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<PAGE> 17
with respect to one or more series of Debt Securities, and a successor
Indenture Trustee may be appointed to act with respect to such series. In the
event that two or more Persons are acting as Indenture Trustee with respect to
different series of Debt Securities, each such Indenture Trustee shall be a
Indenture Trustee of a trust under the Indenture separate and apart from the
trust administered by any other Indenture Trustee (Section 610), and, except as
otherwise indicated herein, any action described herein to be taken by the
Indenture Trustee may be taken by each such Indenture Trustee with respect to,
and only with respect to, the one or more series of Debt Securities for which
it is Indenture Trustee under the Indenture. (Section 609)
DESCRIPTION OF SHARES OF BENEFICIAL INTEREST
GENERAL
The following description sets forth certain general terms and
provisions of the Shares to which any Prospectus Supplement may relate,
including a Prospectus Supplement which provides for Shares issuable pursuant
to subscription offerings or rights offerings, upon conversion or exchange of
Preferred Shares or Debt Securities or upon the exercise of Shares Warrants.
The statements below describing the Shares are in all respects subject to and
qualified in their entirety by reference to the applicable provisions of First
Union's Declaration of Trust (the "Declaration of Trust") and By-Laws.
The number of Shares which First Union is authorized to issue is
unlimited. All Shares are entitled to participate equally in any distributions
thereon declared by First Union. Subject to the provisions of the By-Laws
regarding Excess Shares (as defined below), each outstanding Share entitles the
Holder thereof to one vote on all matters voted on by shareholders (as
described below), including the election of Trustees. Shareholders have no
pre-emptive rights. The outstanding Shares are fully paid and non-assessable
and have equal liquidation rights. The Shares are fully transferable except
that their issuance and transfer may be regulated or restricted by First Union
in order to assure qualification by First Union for taxation as a REIT. See
"Restriction on Size of Holdings." The Shares are not redeemable at the option
of First Union or of any shareholder. The Board of Trustees are authorized
without shareholder approval to borrow money and issue obligations and equity
securities which may or may not be convertible into Shares and warrants, rights
or options to purchase Shares; and to issue other securities of any class or
classes which may or may not have preferences or restrictions not applicable to
the Shares. The issuance of additional Shares or such conversion rights,
warrants or options may have the effect of diluting the interest of
shareholders. Annual meetings of the shareholders are held on the second
Tuesday of the fourth month following the close of each fiscal year at such
place as the Trustees may from time to time determine. Special meetings may be
called at any time and place when ordered by a majority of the Trustees, or
upon written request of the holders of not less than one-quarter of the
outstanding Shares.
SHAREHOLDER LIABILITY
The Declaration of Trust provides that no shareholder shall be
personally liable in connection with the property or the affairs of First
Union, and that all persons shall look solely to property of First Union for
satisfaction of claims of any nature arising in connection with affairs of
First Union.
Under present Ohio law, no personal liability will attach to
shareholders of First Union, but with respect to tort claims, contract claims
where liability of shareholders is not expressly negated, claims for taxes and
certain statutory liabilities, the shareholders may in some jurisdictions other
than Ohio be held personally liable to the extent that such claims are not
satisfied by First Union, in which event the shareholders would, in the absence
of negligence or misconduct on their part, be entitled to reimbursement from
the general assets of First Union. First Union carries insurance which the
Trustees consider adequate to cover any probable tort claims. To the extent
the assets and insurance of First Union should be insufficient to reimburse a
shareholder who has been required to pay a claim against First Union, the
shareholder would suffer a loss. The statements in this paragraph and the next
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<PAGE> 18
preceding paragraph also apply to holders of the Preferred Shares, although any
possible liability of such holders would be further reduced by the greater
limitations on their voting power.
REIT QUALIFICATION
Under regulations of the Internal Revenue Service, the Trustees must
have continuing exclusive authority over the management of First Union and the
conduct of its affairs, free from any control by the shareholders, other than
the right to elect or remove Trustees, to terminate the Declaration of Trust,
to ratify amendments to the Declaration of Trust, and certain other permitted
rights, if First Union is to continue to qualify as a REIT under the applicable
sections of the Internal Revenue Code of 1986, as amended (the "Code"). If
First Union is to have limited liability for its shareholders under Ohio law,
it is also required that the Trustees have absolute control over the management
of First Union free from any control by the shareholders, other than the right
to elect Trustees or to approve certain actions of the Trustees. Consequently,
the only voting power presently granted to the shareholders is the right by a
majority vote (i) to elect Trustees, (ii) when approved by a majority of the
Trustees, to approve or disapprove the transfer of the assets of First Union to
a corporation, and to approve or disapprove amendments to the Declaration of
Trust or termination of the Declaration of Trust, and (iii) when removal is
proposed by all other Trustees, to approve or disapprove removal of any
Trustee. First Union has no fixed duration and will continue indefinitely,
unless terminated as provided in the Declaration of Trust.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Shares is National City Bank.
The Shares are listed on the NYSE under the symbol "FUR."
RESTRICTION ON SIZE OF HOLDINGS
The By-Laws restrict beneficial ownership of First Union's outstanding
capital stock by a single person, or persons acting as a group, to 9.8% (the
"Share Ownership Limit") of the Shares. Beneficial ownership of the Shares
includes Shares which a person may acquire upon conversion or exercise of any
securities of First Union that are convertible into or exercisable for Shares.
The purposes of these provisions are to assist in protecting and preserving
First Union's REIT status and to protect the interest of shareholders in
takeover transactions by preventing the acquisition of a substantial block of
shares unless the acquiror makes a cash tender offer for all outstanding
shares. For First Union to qualify as a REIT under the Code, not more than 50%
in value of its outstanding capital stock may be owned by five or fewer
individuals at any time during the last half of First Union's taxable year.
The provision permits five persons each to acquire up to a maximum of 9.8% of
the Shares, or an aggregate of 49% of the outstanding, and thus, assists the
Trustees in protecting and preserving REIT status for tax purposes.
Shares owned by a person or group of persons in excess of 9.8% of
First Union's outstanding Shares ("Excess Shares") shall not be entitled to any
voting rights; shall not be considered outstanding for quorums or voting
purposes; and shall not be entitled to dividends, interest or any other
distribution with respect to the securities.
TRUSTEE LIABILITY
The Declaration of Trust provides that Trustees shall not be
individually liable for any obligation or liability incurred by or on behalf of
First Union or by Trustees for the benefit and on behalf of First Union. Under
the Declaration of Trust and Ohio law respecting REITs, Trustees are not liable
to First Union or the shareholders for any act or omission except for acts or
omissions which constitute bad faith, willful misfeasance, gross negligence or
reckless disregard of duties to First Union and its shareholders.
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<PAGE> 19
BENEFICIAL OWNERSHIP OF THE MANAGEMENT COMPANY
All of the shares of the Management Company are owned in trust for the
benefit of First Union's shareholders pursuant to a declaration of trust dated
November 10, 1971 (the "Management Company Declaration of Trust"). The
Management Company Declaration of Trust provides that the net income of the
trust estate shall be paid from time to time to the First Union shareholders in
proportion to the number of shares of First Union held by them. Upon
termination of the trust, each shareholder of First Union is entitled to a
proportionate share of the net proceeds received upon the sale of the assets of
the trust estate. The trustees of the trust may require, as a condition to the
receipt of any payment of the net income or of the net proceeds upon
termination, that a shareholder demonstrate that the shares of First Union
owned by him, together with any shares the ownership of which is attributed to
him by the Code, does not exceed 5% of the then outstanding shares of First
Union. The Management Company Declaration of Trust provides that the trust
shall terminate upon the termination of First Union. The trustees of the trust
are selected by the Trustees of First Union. See "Federal Income Tax
Considerations - Taxation of First Union - Stapled Stock."
SHAREHOLDER RIGHTS PLAN
In March 1990, the Board of Trustees declared a dividend with respect
to each Share consisting of one right to purchase one Share at an exercise
price of $50 per right. If a person or group, excluding certain affiliated
entities of First Union, acquires 15% or more of the outstanding Shares (except
in a tender offer or exchange offer approved by the Board of Trustees), is
declared to be an "adverse person" by the Board of Trustees or engages in
certain self-dealing transactions with the First Union ("flip-in events"), each
right, other than rights owned by a 15% owner or an "adverse person", entitle
the holder to purchase one Share for its par value (currently $1 per share).
If First Union is acquired in a merger or other business combination
("flip-over events"), each right entitles the holder to purchase, for $1,
shares of the acquiring company having a market value equal to the market value
of one Share.
The rights may be redeemed by First Union at a price of $0.01 per
right at any time prior to the earlier of a "flip-in" or "flip-over" event or
the expiration of the rights on March 30, 2000.
DESCRIPTION OF PREFERRED SHARES OF BENEFICIAL INTEREST
GENERAL
Subject to limitations prescribed by Ohio law and the Declaration of
Trust, the Board of Trustees is authorized to issue, without the approval of
the shareholders, Preferred Shares in series and to establish from time to time
the number of Preferred Shares to be included in such series and to fix the
designation and any preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption of the shares of each series. All Preferred Shares
issued will be duly authorized and fully paid. The Prospectus Supplement
relating to the Preferred Shares will set forth whether or not the holders of
the Preferred Shares will be entitled to the benefit of the Management Company
Declaration of Trust. See "Description of Shares of Beneficial Interest -
Beneficial Ownership of the Management Company."
<TABLE>
<CAPTION>
Reference is made to the Prospectus Supplement relating to the Preferred Shares offered thereby for the specific terms of
such Preferred Shares, including:
<S> <C>
(1) The title and stated value of such Preferred Shares;
(2) The number of shares of such Preferred Shares offered, the liquidation preference per share and the offering price
of such Preferred Shares;
</TABLE>
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<PAGE> 20
<TABLE>
<S> <C>
(3) The dividend rate(s), period(s) and/or payment date(s) or method(s) of calculation thereof applicable to such
Preferred Shares;
(4) The date from which dividends on such Preferred Shares shall cumulate, if applicable;
(5) The procedures for any auction and remarketing, if any, for such Preferred Shares;
(6) The provision for a sinking fund, if any, for such Preferred Shares;
(7) The provision for redemption, if applicable, of such Preferred Shares;
(8) Any listing of such Preferred Shares on any securities exchange;
(9) The terms and conditions, if applicable, upon which such Preferred Shares will be convertible into Shares,
including the conversion price (or manner of calculation thereof);
(10) Whether interests in such Preferred Shares will be represented by Global Securities;
(11) Any other specific terms, preferences, rights, limitations or restrictions of such Preferred Shares;
(12) A discussion of federal income tax considerations applicable to such Preferred Shares;
(13) The relative ranking and preferences of such Preferred Shares as to dividend rights and rights upon liquidation,
dissolution or winding up of the affairs of First Union;
(14) Any limitations on issuance of any series of Preferred Shares ranking senior to or on a parity with such series of
Preferred Shares as to dividend rights and rights upon liquidation, dissolution or winding up of the affairs of
First Union; and
(15) Any limitations on direct or beneficial ownership and restrictions on transfer of Preferred Shares, in each case
as may be appropriate to preserve the status of First Union as a REIT.
</TABLE>
To protect First Union's status as a REIT, restrictions on ownership
of Preferred Shares similar to the restrictions on ownership of Shares will be
imposed and enforced. See "Description of Shares of Beneficial Interest --
Restrictions on Size of Holdings".
RANK
Unless otherwise specified in the Prospectus Supplement, the Preferred
Shares will, with respect to dividend rights and rights upon liquidation,
dissolution or winding up of First Union, rank (i) senior to all classes or
series of Shares and to all equity securities ranking junior to such Preferred
Shares; (ii) on a parity with all equity securities issued by First Union the
terms of which specifically provide that such equity securities rank on a
parity with the Preferred Shares; and (iii) junior to all equity securities
issued by First Union the terms of which specifically provide that such equity
securities rank senior to the Preferred Shares. The rights of the holders of
each series of the Preferred Shares will be subordinate to those of First
Union's general creditors.
DIVIDENDS
Holders of each series of Preferred Shares shall be entitled to
receive, when, as and if declared by the Board of Trustees, out of assets of
First Union legally available for payment, cash dividends at such rates and on
such dates as will be set forth in the applicable Prospectus Supplement. Such
rate may be fixed or variable or both.
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<PAGE> 21
Each such dividend shall be payable to holders of record as they appear on the
share transfer books of First Union on such record dates as shall be fixed by
the Board of Trustees.
Dividends on any series of the Preferred Shares may be cumulative or
non-cumulative, as provided in the applicable Prospectus Supplement.
Dividends, if cumulative, will be cumulative from and after the date set forth
in the applicable Prospectus Supplement. If the Board of Trustees fails to
declare a dividend payable on a dividend payment date on any series of the
Preferred Shares for which dividends are noncumulative, then the holders of
such series of the Preferred Shares will have no right to receive a dividend in
respect of the dividend period ending on such dividend payment date, and First
Union will have no obligation to pay the dividend accrued for such period,
whether or not dividends on such series are declared payable on any future
dividend payment date.
If Preferred Shares of any series are outstanding, no full dividends
shall be declared or paid or set apart for payment on the Preferred Shares of
any other series ranking, as to dividends, on a parity with or junior to the
Preferred Shares of such series for any period unless (i) if such series of
Preferred Shares has a cumulative dividend, full cumulative dividends have been
or contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for such payment on the Preferred Shares of such
series for all past dividend periods and the then current dividend period or
(ii) if such series of Preferred Shares does not have a cumulative dividend,
full dividends for the then current dividend period have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for such payment on the Preferred Shares of such
series. When dividends are not paid in full (or a sum sufficient for such full
payment is not so set apart) upon the Preferred Shares of any series and the
shares of any other series of Preferred Shares ranking on a parity as to
dividends with the Preferred Shares of such series, all dividends declared upon
Preferred Shares of such series and any other series of Preferred Shares
ranking on a parity as to dividends with such Preferred Shares shall be
declared pro rata so that the amount of dividends declared per share on the
Preferred Shares of such series and such other series of Preferred Shares shall
in all cases bear to each other the same ratio that accrued dividends per share
on the Preferred Shares of such series (which shall not include any cumulation
in respect of unpaid dividends for prior dividend periods if such series of
Preferred Shares does not have a cumulative dividend) and such other series of
Preferred Shares bear to each other. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or payments on
Preferred Shares of such series which may be in arrears.
Except as provided in the immediately preceding paragraph, unless (i)
if such series of Preferred Shares has a cumulative dividend, full cumulative
dividends on the Preferred Shares of such series have been or contemporaneously
are declared and paid or declared and a sum sufficient of the payment thereof
set apart for payment for all past dividend periods and the then current
dividend period and (ii) if such series of Preferred Shares does not have a
cumulative dividend, full dividends on the Preferred Shares of such series have
been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for payment for the then current
dividend period, no dividends (other than in Shares or other shares of
beneficial interest ranking junior to the Preferred Shares of such series as to
dividends and upon liquidation) shall be declared or paid or set aside for
payment or other distribution shall be declared or made upon the Shares or any
other shares of beneficial interest of First Union ranking junior to or on a
parity with the Preferred Shares of such series as to dividends or upon
liquidation, nor shall any Shares or any other shares of beneficial interest of
First Union ranking junior to or on a parity with the Preferred Shares of such
series as to dividends or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for
a sinking fund for the redemption of any such shares) by First Union (except by
conversion into or exchange for other shares of beneficial interest of First
Union ranking junior to the Preferred Shares of such series as to dividends and
upon liquidation).
Any dividend payment made on a series of Preferred Shares shall first
be credited against the earliest accrued but unpaid dividend due with respect
to shares of such series which remains payable.
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<PAGE> 22
REDEMPTION
If so provided in the applicable Prospectus Supplement, the Preferred
Shares will be subject to mandatory redemption or redemption at the option of
First Union, as a whole or in part, in each case upon the terms, at the times
and at the redemption prices set forth in such Prospectus Supplement.
The Prospectus Supplement relating to a series of Preferred Shares
that is subject to mandatory redemption will specify the number of such
Preferred Shares that shall be redeemed by First Union in each year commencing
after a date to be specified, at a redemption price per share to be specified,
together with an amount equal to all accrued and unpaid dividends thereon
(which shall not, if such Preferred Shares do not have a cumulative dividend,
include any cumulation in respect of unpaid dividends for prior dividend
periods) to the date of redemption. The redemption price may be payable in
cash or other property, as specified in the applicable Prospectus Supplement.
If the redemption price for Preferred Shares of any series is payable only from
the net proceeds of the issuance of shares of beneficial interest of First
Union, the terms of such Preferred Shares may provide that, if no such shares
of beneficial interest shall have been issued or to the extent the net proceeds
from any issuance are insufficient to pay in full the aggregate redemption
price then due, such Preferred Shares shall automatically and mandatorily be
converted into shares of the applicable shares of beneficial interest of First
Union pursuant to conversion provisions specified in the applicable Prospectus
Supplement.
Notwithstanding the foregoing, unless (i) if such series of Preferred
Shares has a cumulative dividend, full cumulative dividends on all Preferred
Shares of any series have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof set apart for payment for
all past dividend periods and the then current dividend period and (ii) if such
series of Preferred Shares does not have a cumulative dividend, full dividends
on all Preferred Shares of any series have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof set
apart for payment for the then current dividend period, no Preferred Shares of
any series shall be redeemed unless all outstanding Preferred Shares of such
series are simultaneously redeemed; provided, however, that the foregoing shall
not prevent the purchase or acquisition of Preferred Shares of such series
pursuant to a purchase or exchange offer made on the same terms to holders of
all outstanding Preferred Shares of such series, and, unless (i) if such series
of Preferred Shares has a cumulative dividend, full cumulative dividends on all
Preferred Shares of any series have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for
payment for all past dividend periods and the then current dividend period and
(ii) if such series of Preferred Shares does not have a cumulative dividend,
full dividends on all Preferred Shares of any series have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for payment for the then current dividend period,
First Union shall not purchase or otherwise acquire directly or indirectly any
shares of Preferred Shares of such series (except by conversion into or
exchange for shares of beneficial interest of First Union ranking junior to the
Preferred Shares of such series as to dividends and upon liquidation).
If fewer than all of the outstanding Preferred Shares of any series
are to be redeemed, the number of shares to be redeemed will be determined by
First Union and such shares may be redeemed pro rata from the holders of record
of Preferred Shares of such series in proportion to the number of Preferred
Shares of such series held by such holders (with adjustments to avoid
redemption of fractional shares), by lot in a manner determined by First Union
or by any other method as may be determined by First Union in its sole
discretion to be equitable.
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of record of Preferred Shares
of any series to be redeemed at the address shown on the share transfer books
of First Union. Each notice shall state: (i) the redemption date; (ii) the
number of shares and series of the Preferred Shares to be redeemed; (iii) the
redemption price; (iv) the place or places where certificates for such
Preferred Shares are to be surrendered for payment of the redemption price; (v)
that dividends on the Preferred Shares to be redeemed will cease to accrue on
such redemption date; and (vi) the date upon which the holder's conversion
rights, if any, as to such Preferred Shares shall terminate. If fewer than all
the Preferred Shares of any
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<PAGE> 23
series are to be redeemed, the notice mailed to each such holder thereof shall
also specify the number of Preferred Shares to be redeemed from each such
holder. If notice of redemption of any Preferred Shares has been given and if
the funds necessary for such redemption have been set aside by First Union in
trust for the benefit of the holders of any Preferred Shares so called for
redemption, then from and after the redemption date dividends will cease to
accrue on such Preferred Shares, and all rights of the holders of such shares
will terminate, except the right to receive the redemption price.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of First Union, then, before any distribution or payment
shall be made to the holders of any Shares or any other class or series of
shares of beneficial interest of First Union ranking junior to the Preferred
Shares in the distribution of assets upon any liquidation, dissolution or
winding up of First Union, the holders of each series of Preferred Shares shall
be entitled to receive out of assets of First Union legally available for
distribution to shareholders, liquidating distributions in the amount of the
liquidation preference per share (set forth in the applicable Prospectus
Supplement), plus an amount equal to all dividends accrued and unpaid thereon
(which shall not include any cumulation in respect of unpaid dividends for
prior dividend periods if such Preferred Shares do not have a cumulative
dividend). After payment of the full amount of the liquidating distributions
to which they are entitled, the holders of Preferred Shares will have no right
or claim to any of the remaining assets of First Union. In the event that,
upon any such voluntary or involuntary liquidation, dissolution or winding up,
the available assets of First Union are insufficient to pay the amount of the
liquidating distributions on all outstanding Preferred Shares and the
corresponding amounts payable on all shares of other classes or series of
shares of beneficial interest of First Union ranking on a parity with the
Preferred Shares in the distribution of assets, then the holders of the
Preferred Shares and all other such classes or series of shares of beneficial
interest shall share ratably in any such distribution of assets in proportion
to the full liquidating distributions to which they would otherwise be
respectively entitled.
If liquidating distributions shall have been made in full to all
holders of the Preferred Shares, the remaining assets of First Union shall be
distributed among the holders of any other classes or series of shares of
beneficial interest ranking junior to the Preferred Shares upon liquidation,
dissolution or winding up of First Union, according to their respective rights
and preferences and in each case according to their respective number of
shares. For such purposes, the consolidation or merger of First Union with or
into any other entity, or the sale, lease or conveyance of all or substantially
all of the property or business of First Union, shall not be deemed to
constitute a liquidation, dissolution or winding up of First Union.
VOTING RIGHTS
Holders of the Preferred Shares of a particular series will not have
any voting rights, except as set forth below or in the applicable Prospectus
Supplement or as otherwise required by applicable law. The following is a
summary of the voting rights that, unless provided otherwise in the applicable
Prospectus Supplement, will apply to each series of Preferred Shares.
If six quarterly dividends (whether or not consecutive) payable on the
Preferred Shares of such series, or any other series of Preferred Shares
ranking on a parity with such series of Preferred Shares with respect in each
case to the payment of dividends, amounts upon liquidation, dissolution and
winding up ("Parity Shares"), are in arrears, whether or not earned or
declared, the number of Trustees then constituting the Board of Trustees will
be increased by two, and the holders of Preferred Shares of such series, voting
together as a class with the holders of Parity Shares of any other series (any
such other series, the "Voting Preferred Shares"), will have the right to elect
two additional Trustees to serve on the Board of Trustees at any annual meeting
of shareholders or a properly called special meeting of the holders of
Preferred Shares of such series and such Voting Preferred Shares and at each
subsequent annual meeting of shareholders until all such dividends and
dividends for the current quarterly period on the Preferred Shares of such
series and such other Voting Preferred Shares have been paid or declared and
set
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<PAGE> 24
aside for payment. Such voting rights will terminate when all such accrued and
unpaid dividends have been declared and paid or set aside for payment. The
term of office of all Trustees so elected will terminate with the termination
of such voting rights.
The approval of two-thirds of the outstanding Preferred Shares of such
series and all other series of Voting Preferred Shares similarly affected,
voting as a single class, is required in order to (i) amend the Declaration of
Trust to affect materially and adversely the rights, preferences or voting
power of the holders of the Preferred Shares of such series or the Voting
Preferred Shares, (ii) enter into a share exchange that affects the Preferred
Shares of such series, consolidate with or merge into another entity, or permit
another entity to consolidate with or merge into First Union, unless in each
such case each Preferred Share of such series remains outstanding without a
material and adverse change to its terms and rights or is converted into or
exchanged for convertible preferred shares of the surviving entity having
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms or conditions of
redemption thereof identical to that of a Preferred Share of such series
(except for changes that do not materially and adversely affect the holders of
the Preferred Shares of such series) of (iii) authorize, reclassify, create, or
increase the authorized amount of any class of shares having rights senior to
the Preferred Shares of such series with respect to the payment of dividends or
amounts upon liquidation, dissolution or winding up. However, First Union may
create additional classes of Parity Shares and Preferred Shares of any other
series ranking junior to such series of Preferred Shares with respect in each
case to the payment of dividends, amounts upon liquidation, dissolution and
winding up ("Junior Shares") and issue additional series of Parity Shares and
Junior Shares without the consent of any holder of Preferred Shares of such
series.
Except as provided above and as required by law, the holders of
Preferred Shares of each series will not be entitled to vote on any merger or
consolidation involving First Union or a sale of all or substantially all of
the assets of First Union.
With respect to any matter as to which the Preferred Shares of any
series is entitled to vote, holders of the Preferred Shares of such series and
any Voting Preferred Shares will be entitled to cast the number of votes set
forth in the respective Prospectus Supplement with respect to that series of
Preferred Shares and Voting Preferred Shares. As a result of the provisions
requiring the holders of shares of a series of the Preferred Shares to vote
together as a class with the holders of shares of one or more series of Parity
Shares, it is possible that the holders of such Parity Shares could approve
action that would adversely affect such series of Preferred Shares, including
the creation of a class of shares of beneficial interest ranking prior to such
series of Preferred Shares as to dividends, voting or distributions of assets.
CONVERSION RIGHTS
The terms and conditions, if any, upon which Preferred Shares of any
series are convertible into Shares will be set forth in the applicable
Prospectus Supplement relating thereto. Such terms will include the number of
Shares into which the Preferred Shares are convertible, the conversion price
(or manner of calculation thereof), the conversion period, provisions as to
whether conversion will be at the option of the holders of the Preferred Shares
or First Union, the events requiring an adjustment of the conversion price and
provisions affecting conversion in the event of the redemption of such
Preferred Shares.
TRANSFER AGENT AND REGISTRAR
The name and address of the transfer agent and registrar for any
series of Preferred Shares will be set forth in the applicable Prospectus
Supplement.
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DESCRIPTION OF SECURITIES WARRANTS
First Union may issue Securities Warrants for the purchase of Debt
Securities, Preferred Shares or Shares. Securities Warrants may be issued
independently or together with any other Offered Securities offered by any
Prospectus Supplement and may be attached to or separate from such Offered
Securities. Each series of Securities Warrants will be issued under a separate
warrant agreement (each, a "Warrant Agreement") to be entered into between
First Union and a warrant agent specified in the applicable Prospectus
Supplement (the "Warrant Agent"). The Warrant Agent will act solely as an
agent of First Union in connection with the Securities Warrants of such series
and will not assume any obligation or relationship of agency or trust for or
with any holders or beneficial owners of Securities Warrants. The following
summaries of certain provisions of the Securities Warrant Agreement and the
Securities Warrants do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all the provisions of the
Securities Warrant Agreement and the Securities Warrant certificates relating
to each series of Securities Warrants which will be filed with the Commission
at or prior to the time of the issuance of such series of Securities Warrants.
If Securities Warrants are offered, the applicable Prospectus
Supplement will describe the terms of such Securities Warrants, including, in
the case of Securities Warrants for the purchase of Debt Securities, the
following where applicable: (i) the offering price; (ii) the denominations and
terms of the series of Debt Securities purchasable upon exercise of such
Securities Warrants; (iii) the designation and terms of any series of Debt
Securities with which such Securities Warrants are being offered and the number
of such Securities Warrants being offered with such Debt Securities; (iv) the
date, if any, on and after which such Securities Warrants and the related
series of Debt Securities will be transferable separately; (v) the principal
amount of the series of Debt Securities purchasable upon exercise of each such
Securities Warrant and the price at which such principal amount of Debt
Securities of such series may be purchased upon such exercise; (vi) the date on
which the right to exercise such Securities Warrants shall commence and the
date on which such right shall expire (the "Expiration Date"); (vii) whether
the Securities Warrants will be issued in registered or bearer form; (viii) any
special United States federal income tax consequences; (ix) the terms, if any,
on which First Union may accelerate the date by which the Securities Warrants
must be exercised; and (x) any other material terms of such Securities
Warrants.
In the case of Securities Warrants for the purchase of Preferred
Shares or Shares, the applicable Prospectus Supplement will describe the terms
of such Securities Warrants, including the following where applicable: (i) the
offering price; (ii) the aggregate number of shares purchasable upon exercise
of such Securities Warrants, the exercise price, and in the case of Securities
Warrants for Preferred Shares, the designation, aggregate number and terms of
the series of Preferred Shares purchasable upon exercise of such Securities
Warrants; (iii) the designation and terms of any series of Preferred Shares
with which such Securities Warrants are being offered and the number of such
Securities Warrants being offered with such Preferred Shares; (iv) the date, if
any, on and after which such Securities Warrants and the related series of
Preferred Shares or Shares will be transferable separately; (v) the date on
which the right to exercise such Securities Warrants shall commence and the
Expiration Date; (vi) any special United States federal income tax
consequences; and (vii) any other material terms of such Securities Warrants.
Securities Warrant certificates may be exchanged for new Securities
Warrant certificates of different denominations, may (if in registered form) be
presented for registration of transfer, and may be exercised at the corporate
trust office of the Securities Warrant Agent or any other office indicated in
the applicable Prospectus Supplement. Prior to the exercise of any Securities
Warrant to purchase Debt Securities, holders of such Securities Warrants will
not have any of the rights of holders of the Debt Securities purchasable upon
such exercise, including the right to receive payments of principal, premium,
if any, or interest, if any, on such Debt Securities or to enforce covenants in
the applicable indenture. Prior to the exercise of any Securities Warrants to
purchase Preferred Shares or Shares, holders of such Securities Warrants will
not have any rights of holders of such Preferred Shares or Shares, including
the right to receive payments of dividends, if any, on such Preferred Shares or
Shares, or to exercise any applicable right to vote.
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To protect First Union's status as a REIT, restrictions on ownership
of Securities Warrants similar to the restrictions on ownership of Shares will
be imposed and enforced. See "Description of Shares of Beneficial Interest --
Restrictions on Size of Holdings."
EXERCISE OF SECURITIES WARRANTS
Each Securities Warrant will entitle the holder thereof to purchase
such principal amount of Debt Securities or number of shares of Preferred
Shares or Shares, as the case may be, at such exercise price as shall in each
case be set forth in, or calculable from, the Prospectus Supplement relating to
the offered Securities Warrants. After the close of business on the Expiration
Date (or such later date to which such Expiration Date may be extended by First
Union), unexercised Securities Warrants will become void.
Securities Warrants may be exercised by delivering to the Securities
Warrant Agent payment as provided in the applicable Prospectus Supplement of
the amount required to purchase the Debt Securities, Preferred Shares or
Shares, as the case may be, purchasable upon such exercise together with
certain information set forth on the reverse side of the Securities Warrant
certificate. Securities Warrants will be deemed to have been exercised upon
receipt of payment of the exercise price, subject to the receipt within five
(5) business days, of the Securities Warrant certificate evidencing such
Securities Warrants. Upon receipt of such payment and the Securities Warrant
certificate properly completed and duly executed at the corporate trust office
of the Securities Warrant Agent or any other office indicated in the applicable
Prospectus Supplement, First Union will, as soon as practicable, issue and
deliver the Debt Securities, Preferred Shares or Shares, as the case may be,
purchasable upon such exercise. If fewer than all of the Securities Warrants
represented by such Securities Warrant certificate are exercised, a new
Securities Warrant certificate will be issued for the remaining amount of
Securities Warrants.
AMENDMENTS AND SUPPLEMENTS TO WARRANT AGREEMENT
The Warrant Agreements may be amended or supplemented without the
consent of the holders of the Securities Warrants issued thereunder to effect
changes that are not inconsistent with the provisions of the Securities
Warrants and that do not adversely affect the interests of the holders of the
Securities Warrants.
ADJUSTMENTS
Unless otherwise indicated in the applicable Prospectus Supplement,
the exercise price of, and the number of Shares covered by, a Shares Warrant is
subject to adjustment in certain events, including (i) payment of a dividend on
the Shares payable in shares of beneficial interest and share splits,
combinations or reclassification of the Shares; (ii) issuance to all holders of
Shares of rights or warrants to subscribe for or purchase shares of Shares at
less than their current market price (as defined in the Warrant Agreement for
such series of Shares Warrants); and (iii) certain distributions of evidences
of indebtedness or assets (including securities but excluding cash dividends or
distributions paid out of consolidated earnings or retained earnings or
dividends payable in Shares) or of subscription rights and warrants (excluding
those referred to above).
No adjustment in the exercise price of, and the number of Shares
covered by, a Shares Warrant will be made for regular quarterly or other
periodic or recurring cash dividends or distributions or for cash dividends or
distributions to the extent paid from consolidated earnings or retained
earnings. No adjustment will be required unless such adjustment would require
a change of at least 1% in the exercise price then in effect. Except as stated
above, the exercise price of, and the number of Shares covered by, a Shares
Warrant will not be adjusted for the issuance of Shares or any securities
convertible into or exchangeable for Shares, or carrying the right or option to
purchase or otherwise acquire the foregoing, in exchange for cash, other
property or services.
In the event of any (i) consolidation or merger of First Union with or
into any entity (other than a consolidation or a merger that does not result in
any reclassification, conversion, exchange or cancellation of
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outstanding Shares); (ii) sale, transfer, lease or conveyance of all or
substantially all of the assets of First Union; or (iii) reclassification,
capital reorganization or change of the Shares (other than solely a change in
par value or from par value to no par value), then any holder of a Shares
Warrant will be entitled, on or after the occurrence of any such event, to
receive on exercise of such Shares Warrant the kind and amount of shares of
beneficial interest or other securities, cash or other property (or any
combination thereof) that the holder would have received had such holder
exercised such holder's Shares Warrant immediately prior to the occurrence of
such event. If the consideration to be received upon exercise of the Shares
Warrant following any such event consists of common shares of the surviving
entity, then from and after the occurrence of such event, the exercise price of
such Shares Warrant will be subject to the same anti-dilution and other
adjustments described in the second preceding paragraph, applied as if such
common shares were Shares.
FEDERAL INCOME TAX CONSIDERATIONS
The following is a description of the material Federal income tax
consequences to First Union and its shareholders of the treatment of First
Union as a REIT. The discussion is general in nature and not exhaustive of all
possible tax considerations, nor does the discussion give a detailed
description of any state, local, or foreign tax considerations. The discussion
does not discuss all aspects of Federal income tax law that may be relevant to
a prospective shareholder in light of his particular circumstances or to
certain types of shareholders (including insurance companies, financial
institutions, broker-dealers, tax exempt organizations, foreign corporations
and persons who are not citizens or residents of the United States) subject to
special treatment under the federal income tax law nor does the discussion
address special considerations, if any, which may relate to the purchase of
Debt Securities, Preferred Shares or Securities Warrants.
Based upon certain representations of First Union and as described
further below, in the opinion of Mayer, Brown & Platt, counsel to First Union,
First Union's existing legal organization and its method of operation, as
described in this Prospectus and as represented by it, will enable it to
satisfy the requirements for qualification as a REIT. This opinion is based on
certain assumptions relating to the organization and operation of the
Management Company and of any partnerships in which First Union will hold an
interest, and is conditioned upon certain representations made by First Union
as to certain factual matters relating to First Union's and the Management
Company's organization and manner of operation. It is also based on the
assumption that for all of its taxable years (or portion thereof) prior to the
date of this Prospectus, First Union satisfied all of the requirements
necessary for qualifications as a REIT under the Code, and the assumption that
all organizational documents for First Union and the Management Company are
complied with. In addition, this opinion is based on the law existing and in
effect on the date hereof. First Union's qualification and taxation as a REIT
in the future will depend upon First Union's ability to meet on a continuing
basis, through actual operating results, asset composition, distribution levels
and diversity of stock ownership, the various qualification tests imposed under
the Code discussed below. Mayer, Brown & Platt will not review compliance with
these tests on a continuing basis. No assurance can be given that First Union
will satisfy such tests on a continuing basis.
THIS DISCUSSION IS NOT INTENDED AS A SUBSTITUTE FOR CAREFUL TAX
PLANNING, AND EACH PROSPECTIVE INVESTOR IS ADVISED TO CONSULT WITH ITS TAX
ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO IT OF THE PURCHASE,
OWNERSHIP AND SALE OF THE OFFERED SECURITIES, INCLUDING THE FEDERAL, STATE,
LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF SUCH PURCHASE, OWNERSHIP AND SALE,
AND OF POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
If certain detailed conditions imposed by the REIT provisions of the
Code are met, entities, such as First Union, that invest primarily in real
estate and that otherwise would be treated for Federal income tax purposes as
corporations, are generally not taxed at the corporate level on their "REIT
taxable income" that is currently distributed to shareholders. This treatment
substantially eliminates the "double taxation" (i.e., at both the corporate and
shareholder levels) that generally results from the use of corporations.
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If First Union fails to qualify as a REIT in any year, however, it
will be subject to Federal income taxation as if it were a domestic
corporation, and its shareholders will be taxed in the same manner as
shareholders of ordinary corporations. In this event, First Union could be
subject to potentially significant tax liabilities, and therefore the amount of
cash available for distribution to its shareholders would be reduced or
eliminated.
First Union has properly elected and continued to elect REIT status for
all taxable years since its filing of a REIT election, and the Board of
Trustees believes that First Union has operated and expects that First Union
will continue to operate in a manner that will permit First Union to elect REIT
status in each taxable year thereafter. There can be no assurance, however,
that this belief or expectation will be fulfilled, since qualification as a
REIT depends on First Union continuing to satisfy numerous asset, income and
distribution tests described below, which in turn will be dependent in part on
First Union's operating results.
TAXATION OF FIRST UNION
General. In any year in which First Union qualifies as a REIT, it
will not, in general, be subject to Federal income tax on that portion of its
REIT taxable income or capital gain which is distributed to shareholders. First
Union may, however, be subject to tax at normal corporate rates upon any
taxable income or capital gain not distributed.
Notwithstanding its qualification as a REIT, First Union may also be
subject to taxation in certain other circumstances. If First Union should fail
to satisfy either the 75% or the 95% gross income test (as discussed below),
and nonetheless maintains its qualification as a REIT because certain other
requirements are met, it will be subject to a 100% tax on the greater of the
amount by which First Union fails either the 75% or the 95% test, multiplied by
a fraction intended to reflect First Union's profitability. First Union will
also be subject to a tax of 100% on net income from any "prohibited
transaction" as described below, and if First Union has (i) income from the
sale or other disposition of "foreclosure property" which is held primarily for
sale to customers in the ordinary course of business or (ii) other
non-qualifying income from foreclosure property, it will be subject to tax on
such income from foreclosure property at the highest corporate rate. In
addition, if First Union should fail to distribute during each calendar year at
least the sum of (i) 85% of its REIT ordinary income for such year, (ii) 95% of
its REIT capital gain net income for such year, and (iii) any undistributed
taxable income from prior years, First Union would be subject to a 4% excise
tax on the excess of such required distribution over the amounts actually
distributed. First Union may also be subject to the corporate alternative
minimum tax, as well as tax in certain situations not presently contemplated.
The Management Company will be taxed on its income at regular corporate rates.
First Union uses the calendar year both for Federal income tax purposes and for
financial reporting purposes.
Stapled Stock. First Union and the Management Company are "stapled
entities" as defined in Section 269B of the Code. Section 269B of the Code
defines the term "stapled entities" to mean any group of two or more entities
if more than 50% in value of the beneficial ownership in each of such entities
consists of interests which, by reason of form of ownership, restrictions on
transfers, or other terms or conditions, the transfer of one of such interests
requires the transfer of the other of such interests. Section 269B of the Code
provides that if the shares of a group of entities that include a REIT are
stapled, then such entities shall be treated as one entity for purposes of
applying the REIT provisions of the Code. If Section 269B of the Code were to
apply to First Union and the Management Company, then First Union might not be
able to satisfy the "Gross Income Tests" as described below that are necessary
to qualify as a REIT.
Prior to the enactment of Section 269B of the Code, First Union
received two rulings from the Internal Revenue Service sanctioning the stapling
of First Union and the Management Company. These rulings provided that (i)
even though First Union and the Management Company were "stapled," such
stapling would not preclude First Union from qualifying as a REIT, and (ii)
amounts otherwise qualifying as rents from real property under the REIT rules
would not fail to meet that definition by reason of the fact that First Union
and the Management Company were stapled. The effective date provision for
Section 269B provides that Section 269B of the Code does
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not apply if a group of stapled entities that included a REIT on June 30, 1983
were stapled on that date. First Union believes that because First Union and
the Management Company were stapled on June 30, 1983, Section 269B should not
apply to First Union and the Management Company.
Under the Code, rents from real property do not include amounts
received or accrued, directly or indirectly, from any person if the REIT owns,
directly or indirectly, in the case of a corporation, stock of such corporation
possessing 10% or more of the total combined voting power of all classes of
stock entitled to vote, or 10% or more of the total number of shares of all
classes of stock of such corporation. Under this provision, even though
Section 269B of the Code does not apply to First Union and the Management
Company, if any person were to acquire, directly or indirectly, 10% or more of
the total combined voting power of First Union or 10% or more of the total
number of shares of First Union, then rents received from the Management
Company would not qualify as rents from real property under the REIT rules. In
such a case, First Union would likely not satisfy the "Gross Income Tests"
described below, and accordingly, would not qualify as a REIT.
First Union's By-Laws restrict beneficial ownership of First Union's
outstanding shares by a single person, or persons acting as a group, to 9.8% of
First Union's Shares of Beneficial Interest. Assuming this restriction
precludes any person from owning 10% or more of First Union's Shares of
Beneficial Interest, First Union believes that amounts otherwise qualifying as
rents from real property received from the Management Company will continue to
qualify as rents from real property for REIT purposes.
In order to qualify as a REIT, First Union must meet, among others,
the following requirements:
Share Ownership Tests. First Union's shares of beneficial interest
must be held by a minimum of 100 persons for at least 335 days in each taxable
year (or a proportional number of days in any short taxable year). In
addition, at all times during the second half of each taxable year, no more
than 50% in value of the outstanding shares of beneficial interest of First
Union may be owned, directly or indirectly and by applying certain constructive
ownership rules, by five or fewer individuals, which for this purpose includes
certain tax-exempt entities. However, for purposes of this test, any shares of
beneficial interest held by a qualified domestic pension or other retirement
trust will be treated as held directly by its beneficiaries in proportion to
their actuarial interest in such trust rather than by such trust.
In order to attempt to provide for compliance with the foregoing share
ownership tests, First Union has placed certain restrictions on the transfer of
its shares of beneficial interest to prevent additional concentration of share
ownership. Moreover, to evidence compliance with these requirements, under
Treasury regulations First Union must maintain records which disclose the
actual ownership of its outstanding shares of beneficial interest. In
fulfilling its obligations to maintain records, First Union must and will
demand written statements each year from the record holders of designated
percentages of its shares of beneficial interest disclosing the actual owners
of such shares of beneficial interest (as prescribed by Treasury regulations).
A list of those persons failing or refusing to comply with such demand must be
maintained as a part of First Union's records. A shareholder failing or
refusing to comply with First Union's written demand must submit with his tax
return a similar statement disclosing the actual ownership of his shares and
certain other information. In addition, the By-Laws provide restrictions
regarding the transfer of its shares that are intended to assure continued
satisfaction of the share ownership requirements. See "Description of Shares
of Beneficial Interest -- Restriction on Size of Holdings."
Asset Tests. At the close of each quarter of First Union's taxable
year, First Union must satisfy two tests relating to the nature of its assets
(with "assets" being determined in accordance with generally accepted
accounting principles). First, at least 75% of the value of First Union's
total assets must be represented by interests in real property, interests in
mortgages on real property, shares in other REITs, cash, cash items, government
securities and qualified temporary investments. Second, although the remaining
25% of First Union's assets generally may be invested without restriction,
securities in this class may not exceed (i) in the case of securities of any
one
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non-government issuer, 5% of the value of First Union's total assets or (ii)
10% of the outstanding voting securities of any one such issuer.
Gross Income Tests. There are three separate percentage tests
relating to the sources of First Union's gross income which must be satisfied
for each taxable year. For purposes of these tests, where First Union invests
in a partnership, First Union will be treated as receiving its share of the
income and loss of the partnership, and the gross income of the partnership
will retain the same character in the hands of First Union as it has in the
hands of the partnership. The three tests are as follows:
The 75% Test. At least 75% of First Union's gross income for the
taxable year must be "qualifying income." Qualifying income generally includes
(i) rents from real property (except as modified below); (ii) interest on
obligations secured by mortgages on, or interests in, real property; (iii)
gains from the sale or other disposition of interests in real property and real
estate mortgages, other than gain from property held primarily for sale to
customers in the ordinary course of First Union's trade or business ("dealer
property"); (iv) dividends or other distributions on shares in other REITs, as
well as gain from the sale of such shares; (v) abatements and refunds of real
property taxes; (vi) income from the operation, and gain from the sale, of
property acquired at or in lieu of a foreclosure of the mortgage secured by
such property ("foreclosure property"); (vii) commitment fees received for
agreeing to make loans secured by mortgages on real property or to purchase or
lease real property; and (viii) certain qualified temporary investment income
attributable to the investment of new capital received by First Union in
exchange for its shares or specified debt securities during the one-year period
following the receipt of such capital.
Rents received from a tenant will not, however, qualify as rents from
real property in satisfying the 75% test (or the 95% gross income test
described below) if First Union, or an owner of 10% or more of First Union,
directly or constructively owns 10% or more of such tenant. In addition, if
rent attributable to personal property leased in connection with a lease of
real property is greater than 15% of the total rent received under the lease,
then the portion of rent attributable to such personal property will not
qualify as rents from real property. Moreover, an amount received or accrued
will not qualify as rents from real property (or as interest income) for
purposes of the 75% and 95% gross income tests if it is based in whole or in
part on the income or profits of any person, although an amount received or
accrued generally will not be excluded from "rents from real property" solely
by reason of being based on a fixed percentage or percentages of receipts or
sales. Finally, for rents received to qualify as rents from real property for
purposes of the 75% and 95% gross income tests, First Union generally must not
operate or manage the property or furnish or render services to tenants, other
than through an "independent contractor" from whom First Union derives no
income, except that the "independent contractor" requirement does not apply to
the extent that the services provided by First Union are "usually or
customarily rendered" in connection with the rental of space for occupancy
only, or are not otherwise considered "rendered to the occupant for his
convenience."
The 95% Test. In addition to deriving 75% of its gross income from
the sources listed above, at least 95% of First Union's gross income for the
taxable year must be derived from the above-described qualifying income, or
from dividends, interest, or gains from the sale or other disposition of stock
or other securities that are not dealer property. Dividends and interest on
any obligations not collateralized by an interest in real property are included
for purposes of the 95% test, but not for purposes of the 75% test.
For purposes of determining whether First Union complies with the 75%
and the 95% gross income tests, gross income does not include income from
prohibited transactions. A "prohibited transaction" is a sale of dealer
property (excluding foreclosure property); however, it does not include a sale
of property if such property is held by First Union for at least four years and
certain other requirements (relating to the number of properties sold in a
year, their tax bases, and the cost of improvements made thereto) are
satisfied. See "--Taxation of First Union--General."
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First Union believes that, for purposes of both the 75% and the 95%
gross income tests, its investment in the real properties will in major part
give rise to qualifying income in the form of rents, and that gains on sales of
the real properties generally will also constitute qualifying income.
Even if First Union fails to satisfy one or both of the 75% or 95%
gross income tests for any taxable year, it may still qualify as a REIT for
such year if it is entitled to relief under certain provisions of the Code.
These relief provisions will generally be available if: (i) First Union's
failure to comply was due to reasonable cause and not to willful neglect; (ii)
First Union reports the nature and amount of each item of its income included
in the tests on a schedule attached to its tax return; and (iii) any incorrect
information on this schedule is not due to fraud with intent to evade tax. If
these relief provisions apply, however, First Union will nonetheless be subject
to a 100% tax on the greater of the amount by which it fails either the 75% or
95% gross income test, multiplied by a fraction intended to reflect First
Union's profitability.
The 30% Test. First Union must derive less than 30% of its gross
income for each taxable year from the sale or other disposition of (i) real
property held for less than four years (other than foreclosure property and
involuntary conversions); (ii) stock or securities (including an interest rate
swap or cap agreement) held for less than one year; and (iii) property in a
prohibited transaction. First Union does not anticipate that it will have
difficulty in complying with this test. However, if extraordinary
circumstances were to occur that give rise to dispositions of real estate
properties held for less than four years (for example, on account of the
inability to obtain refinancing), the 30% test could become an issue.
Annual Distribution Requirements. In order to qualify as a REIT,
First Union is required to distribute dividends (other than capital gain
dividends) to its shareholders each year in an amount at least equal to (A) the
sum of (i) 95% of First Union's REIT taxable income (computed without regard to
the dividends paid deduction and First Union's net capital gain) and (ii) 95%
of the net income (after tax), if any, from foreclosure property, minus (B) the
sum of certain items of non-cash income. Such distributions must be paid in
the taxable year to which they relate, or in the following taxable year if
declared before First Union timely files its tax return for such year and if
paid on or before the first regular dividend payment after such declaration.
To the extent that First Union does not distribute all of its net capital gain
or distributes at least 95%, but less than 100%, of its REIT taxable income, as
adjusted, it will be subject to tax on the undistributed amount at regular
capital gains or ordinary corporate tax rates, as the case may be.
First Union intends to make timely distributions sufficient to satisfy
the annual distribution requirements described in the first sentence of the
preceding paragraph. It is possible that First Union may not have sufficient
cash or other liquid assets to meet the 95% distribution requirement, due to
timing differences between the actual receipt of income and actual payment of
expenses on the one hand, and the inclusion of such income and deduction of
such expenses in computing First Union's REIT taxable income on the other hand,
or for other reasons. To avoid a problem with the 95% distribution
requirement, First Union will closely monitor the relationship between its REIT
taxable income and cash flow and, if necessary, intends to borrow funds in
order to satisfy the distribution requirement. However, there can be no
assurance that such borrowing would be available at such time.
If First Union fails to meet the 95% distribution requirement as a
result of an adjustment to First Union's tax return by the Internal Revenue
Service, First Union may retroactively cure the failure by paying a "deficiency
dividend" (plus applicable penalties and interest) within a specified period.
Failure to Qualify. If First Union fails to qualify for taxation as a
REIT in any taxable year and the relief provisions do not apply, First Union
will be subject to tax (including any applicable alternative minimum tax) on
its taxable income at regular corporate rates. Distributions to shareholders
in any year in which First Union fails to qualify as a REIT will not be
deductible by First Union, nor generally will they be required to be made under
the Code. In such event, to the extent of current and accumulated earnings and
profits, all distributions to shareholders will be taxable as ordinary income,
and, subject to certain limitations in the Code, corporate
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distributees may be eligible for the dividends received deduction. Unless
entitled to relief under specific statutory provisions, First Union also will
be disqualified from re-electing taxation as a REIT for the four taxable years
following the year during which qualification was lost.
TAXATION OF SHAREHOLDERS
Taxation of Taxable Domestic Shareholders. As long as First Union
qualifies as a REIT, distributions made to First Union's taxable domestic
shareholders out of current or accumulated earnings and profits (and not
designated as capital gain dividends) will be taken into account by them as
ordinary income and will not be eligible for the dividends received deduction
for corporations. Distributions that are designated as capital gain dividends
will be taxed as long-term capital gains (to the extent they do not exceed
First Union's actual net capital gain for the taxable year) without regard to
the period for which the shareholder has held its shares of beneficial interest
of First Union. However, corporate shareholders may be required to treat up to
20% of certain capital gain dividends as ordinary income. To the extent that
First Union makes distributions in excess of current and accumulated earnings
and profits, these distributions are treated first as a tax-free return of
capital to the shareholder, reducing the tax basis of a shareholder's shares by
the amount of such excess distribution (but not below zero), with distributions
in excess of the shareholder's tax basis being taxed as capital gains (if the
shares are held as a capital asset). In addition, any dividend declared by
First Union in October, November or December of any year and payable to a
shareholder of record on a specific date in any such month shall be treated as
both paid by First Union and received by the shareholder on December 31 of such
year, provided that the dividend is actually paid by First Union during January
of the following calendar year. Shareholders may not include in their
individual income tax returns any net operating losses or capital losses of
First Union. Federal income tax rules may also require that certain minimum
tax adjustments and preferences be apportioned to First Union shareholders.
In general, any loss upon a sale or exchange of Shares by a
shareholder who has held such Shares for six months or less (after applying
certain holding period rules) will be treated as a long-term capital loss, to
the extent of distributions from First Union required to be treated by such
shareholder as long-term capital gains.
Backup Withholding. First Union will report to its domestic
shareholders and to the Internal Revenue Service the amount of dividends paid
for each calendar year, and the amount of tax withheld, if any, with respect
thereto. Under the backup withholding rules, a shareholder may be subject to
backup withholding at the rate of 31% with respect to dividends paid unless
such shareholder (i) is a corporation or comes within certain other exempt
categories and, when required, demonstrates this fact or (ii) provides a
taxpayer identification number, certifies as to no loss of exemption from
backup withholding, and otherwise complies with applicable requirements of the
backup withholding rules. A shareholder that does not provide First Union with
its correct taxpayer identification number may also be subject to penalties
imposed by the Internal Revenue Service. Any amount paid as backup withholding
is available as a credit against the shareholder's income tax liability. In
addition, First Union may be required to withhold a portion of capital gain
distributions made to any shareholders who fail to certify their non-foreign
status to First Union. See "Certain United States Tax Considerations for
Non-U.S. Shareholders -- Distributions from First Union-Capital Gain Dividends"
below.
Taxation of Tax-Exempt Shareholders. The Internal Revenue Service has
issued a revenue ruling in which it held that amounts distributed by a REIT to
a tax-exempt employees' pension trust do not constitute unrelated business
taxable income ("UBTI"). Subject to the discussion below regarding a
"pension-held REIT," based upon such ruling and the statutory framework of the
Code, distributions by First Union to a shareholder that is a tax-exempt entity
should not constitute UBTI, provided that the tax-exempt entity has not
financed the acquisition of its shares with "acquisition indebtedness" within
the meaning of the Code, that the shares are not otherwise used in an unrelated
trade or business of the tax-exempt entity, and that First Union, consistent
with its present intent, does not hold a residual interest in a REMIC.
-31-
<PAGE> 33
However, if any pension or other retirement trust that qualifies under
Section 401(a) of the Code ("qualified pension trust") holds more than 10% by
value of the interests in a "pension-held REIT" at any time during a taxable
year, a portion of the dividends paid to the qualified pension trust by such
REIT may constitute UBTI. For these purposes, a "pension-held REIT" is defined
as a REIT if (i) such REIT would not have qualified as a REIT but for the
provisions of the Code which look through such a qualified pension trust in
determining ownership of shares of the REIT and (ii) at least one qualified
pension trust holds more than 25% by value of the interests of such REIT or one
or more qualified pension trusts (each owning more than a 10% interest by value
in the REIT) hold in the aggregate more than 50% by value of the interests in
such REIT.
OTHER TAX CONSIDERATIONS
Possible Legislative or Other Actions Affecting Tax Consequences.
Prospective shareholders should recognize that the present Federal income tax
treatment of investment in First Union may be modified by legislative, judicial
or administrative action at any time and that any such action may affect
investments and commitments previously made. The rules dealing with Federal
income taxation are constantly under review by persons involved in the
legislative process and by the Internal Revenue Service and the Treasury
Department, resulting in revisions of regulations and revised interpretations
of established concepts as well as statutory changes. No assurance can be
given as to the form or content (including with respect to effective dates) of
any tax legislation which may be enacted. Revisions in Federal tax laws and
interpretations thereof could adversely affect the tax consequences of
investment in First Union.
State and Local Taxes. First Union and its shareholders may be
subject to state or local taxation, and First Union may be subject to state or
local tax withholding requirements, in various jurisdictions, including those
in which it or they transact business or resides. The state and local tax
treatment of First Union and its shareholders may not conform to the Federal
income tax consequences discussed above. Consequently, prospective
shareholders should consult their own tax advisors regarding the effect of
state and local tax laws on an investment in shares.
CERTAIN UNITED STATES TAX CONSIDERATIONS
FOR NON-U.S. SHAREHOLDERS
The following is a discussion of certain anticipated U.S. Federal
income and U.S. Federal estate tax consequences of the ownership and
disposition of shares of beneficial interest applicable to Non-U.S.
Shareholders of such shares. A "Non-U.S. Shareholder" is (i) any individual
who is neither a citizen nor resident of the United States, (ii) any
corporation or partnership other than a corporation or partnership created or
organized in the United States or under the laws of the United States or any
state thereof or under the laws of the District of Columbia or (iii) any estate
or trust that is not "resident" in the United States. The discussion is based
on current law and is for general information only. The discussion does not
address other aspects of U.S. Federal taxation other than income and estate
taxation or all aspects of U.S. Federal income and estate taxation. The
discussion does not consider any specific facts or circumstances that may apply
to a particular Non-U.S. Shareholder.
PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISORS
REGARDING THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. INCOME, ESTATE AND OTHER
TAX CONSEQUENCES OF HOLDING AND DISPOSING OF SHARES OF BENEFICIAL INTEREST.
DISTRIBUTIONS FROM FIRST UNION
Ordinary Dividends. The portion of dividends received by Non-U.S.
Shareholders payable out of First Union's earnings and profits that are not
attributable to capital gains of First Union and that are not effectively
connected with a U.S. trade or business of the Non-U.S. Shareholder will be
subject to U.S. withholding tax at the rate of 30% (unless reduced by treaty or
the Non-U.S. Shareholder files an Internal Revenue Service Form 4224
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<PAGE> 34
with First Union certifying that the investment to which the distribution
relates is effectively connected to a United States trade or business of such
Non-U.S. Shareholder). Under certain limited circumstances, the amount of tax
withheld may be refundable, in whole or in part, because of the tax status of
certain partners or beneficiaries of Non-U.S. Shareholders that are either
foreign partnerships or foreign estates or trusts. In general, Non-U.S.
Shareholders will not be considered engaged in a U.S. trade or business solely
as a result of their ownership of shares of beneficial interest. In cases
where the dividend income from a Non-U.S. Shareholder's investment in shares of
beneficial interest is (or is treated as) effectively connected with the
Non-U.S. Shareholder's conduct of a U.S. trade or business, the Non-U.S.
Shareholder generally will be subject to U.S. tax at graduated rates, in the
same manner as U.S. shareholders are taxed with respect to such dividends (and
may also be subject to the 30% branch profits tax (unless reduced by treaty) in
the case of a Non-U.S. Shareholder that is a foreign corporation).
Under currently applicable Treasury regulations, withholding agents
are required to determine the applicable withholding rate pursuant to the
appropriate tax treaty, and withhold the appropriate amount. Treasury
regulations proposed in 1984, which have not been adopted, and are, therefore,
not currently effective, would, if and when they become effective, require
Non-U.S. Shareholders to file certain forms to obtain the benefit of any
applicable tax treaty providing for a lower rate of withholding tax on
dividends. Such forms would contain the holder's name and address and other
pertinent information, to be certified by such holder under penalties of
perjury, and an official statement by the competent authority (as defined in
the applicable treaty) in the foreign country attesting to the holder's status
as a resident thereof.
Capital Gain Dividends. Under the Foreign Investment in Real Property
Tax Act of 1980 ("FIRPTA"), any distribution made by First Union to a Non-U.S.
Shareholder, to the extent attributable to gains from dispositions of United
States Real Property Interests ("USRPIs") by First Union ("USRPI Capital
Gains"), will be considered effectively connected with a U.S. trade or business
of the Non-U.S. Shareholder and subject to U.S. income tax at the rates
applicable to U.S. individuals or corporations, without regard to whether such
distribution is designated as a capital gain dividend. In addition, First
Union will be required to withhold tax equal to 35% of the amount of such
distribution to the extent it constitutes USRPI Capital Gains. Such
distribution may also be subject to the 30% branch profits tax (unless reduced
by treaty) in the case of a Non-U.S. Shareholder that is a foreign corporation.
Non-Dividend Distributions. Any distributions by First Union that
exceed both current and accumulated earnings and profits of First Union will
not be taxed as either ordinary dividends or capital gain dividends. However,
if it cannot be determined at the time a distribution is made whether or not
such distribution will be in excess of current and accumulated earnings and
profits, the distribution will be subject to withholding. Should this occur,
the Non-U.S. Shareholder may seek a refund of over withholding from the
Internal Revenue Service once it is subsequently determined that such
distribution was, in fact, in excess of current and accumulated earnings and
profits of First Union.
DISPOSITIONS OF SHARES OF BENEFICIAL INTEREST
Unless the shares of beneficial interest constitute USRPIs, a sale or
exchange of shares of beneficial interest by a Non-U.S. Shareholder generally
will not be subject to U.S. taxation under FIRPTA. The shares of beneficial
interest will not constitute USRPIs if First Union is a "domestically
controlled REIT." A domestically controlled REIT is a REIT in which, at all
times during a specified testing period, less than 50% in value of its shares
is held directly or indirectly by Non-U.S. Shareholders. It is currently
anticipated that First Union will be a domestically controlled REIT and,
therefore, that the sale of shares of beneficial interest will not be subject
to taxation under FIRPTA. No assurance can be given that First Union will
continue to be a domestically controlled REIT.
If First Union does not constitute a domestically controlled REIT, a
Non-U.S. Shareholder's sale or exchange of shares of beneficial interest
generally will still not be subject to tax under FIRPTA as a sale of USRPIs
provided that (i) First Union's shares of beneficial interest are "regularly
traded" (as defined by applicable Treasury
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<PAGE> 35
regulations) on an established securities market (e.g., the NYSE, on which the
Shares are listed) and (ii) the selling Non-U.S. Shareholder held 5% or less of
First Union's outstanding shares of beneficial interest at all times during a
specified testing period.
If gain on the sale or exchange of shares of beneficial interest were
subject to taxation under FIRPTA, the Non-U.S. Shareholder would be subject to
U.S. income tax at the rates applicable to U.S. individuals or corporations,
and the purchaser of shares of beneficial interest could be required to
withhold 10% of the purchase price and remit such amount to the Service. The
branch profits tax would not apply to such sales or exchanges.
Capital gains not subject to FIRPTA will nonetheless be taxable in the
United States to a Non-U.S. Shareholder in two cases: (i) if the Non-U.S.
Shareholder's investment in shares of beneficial interest is effectively
connected with a U.S. trade or business conducted by such Non-U.S. Shareholder,
the Non-U.S. Shareholder will be subject to the same treatment as U.S.
shareholders with respect to such gain or (ii) if the Non-U.S. Shareholder is a
nonresident alien individual who was present in the United States for 183 days
or more during the taxable year and has a "tax home" in the United States or an
office or other fixed place of business in the United States to which such gain
is attributable, the nonresident alien individual will be subject to 30% tax on
the individual's capital gain (unless reduced or eliminated by treaty).
FEDERAL ESTATE TAX
Shares of beneficial interest owned or treated as owned by an
individual who is not a citizen or "resident" (as specifically defined for U.S.
Federal estate tax purposes) of the United States at the time of death will be
includable in the individual's gross estate for U.S. Federal estate tax
purposes, unless an applicable estate tax treaty provides otherwise. Such
individual's estate may be subject to U.S. Federal estate tax on the property
includable in the estate for U.S. Federal estate tax purposes.
INFORMATION REPORTING AND BACKUP WITHHOLDING
First Union must report annually to the Service and to each Non-U.S.
Shareholder the amount of dividends (including any capital gain dividends) paid
to, and the tax withheld with respect to, each Non-U.S. Shareholder. These
reporting requirements apply regardless of whether withholding was reduced or
eliminated by an applicable tax treaty. Copies of these returns may also be
made available under the provisions of a specific treaty or agreement with the
tax authorities in the country in which the Non-U.S. Shareholder resides.
U.S. backup withholding (which generally is imposed at the rate of 31%
on certain payments to persons that fail to furnish the information required
under the U.S. information reporting requirements) and information reporting
will generally not apply to dividends (including any capital gain dividends)
paid on shares of beneficial interest to a Non-U.S. Shareholder at an address
outside the United States.
The payment of the proceeds from the disposition of shares of
beneficial interest to or through a U.S. office of a broker will be subject to
information reporting and backup withholding unless the owner, under penalties
of perjury, certifies, among other things, its status as a Non-U.S.
Shareholder, or otherwise establishes an exemption. The payment of the proceeds
from the disposition of shares of beneficial interest to or through a non-U.S.
office of a non-U.S. broker generally will not be subject to backup withholding
and information reporting, except as noted below. In the case of a payment of
proceeds from the disposition of shares of beneficial interest to or through a
non-U.S. office of a broker which is (i) a U.S. person, (ii) a "controlled
foreign corporation" for U.S. Federal income tax purposes or (iii) a foreign
person 50% or more of whose gross income for certain periods is derived from a
U.S. trade or business, information reporting (but not backup withholding) will
apply unless the broker has documentary evidence in its files that the holder
is a Non-U.S. Shareholder (and the broker has no actual knowledge to the
contrary) and certain other conditions are met, or the holder otherwise
establishes an exemption. Under proposed Treasury regulations, a payment of
the proceeds from the disposition of shares of beneficial interest to
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<PAGE> 36
or through such broker will be subject to backup withholding if such broker has
actual knowledge that the holder is a U.S. person.
Backup withholding is not an additional tax. Any amounts withheld
under the backup withholding rules will be refunded or credited against the
Non-U.S. Shareholder's U.S. Federal income tax liability, provided that
required information is furnished to the Service.
These backup withholding and information reporting rules are currently
under review by the Treasury Department, and their application to shares of
beneficial interest is subject to change.
PLAN OF DISTRIBUTION
First Union may offer and sell the Offered Securities in any of four
ways: (i) through agents, (ii) to or through underwriters or dealers, which
may include affiliates of the First Union, (iii) directly to one or more
purchasers or (iv) through any combination of the foregoing. Direct sales to
investors may be accomplished through subscription offerings or through
subscription rights distributed to First Union's shareholders. In connection
with subscription offerings or the distribution of subscription rights to
shareholders, if all of the underlying Offered Securities are not subscribed
for, First Union may sell such unsubscribed Offered Securities to third parties
directly or through underwriters or agents and, in addition, whether or not all
of the underlying Offered Securities are subscribed for, First Union may
concurrently offer additional Offered Securities to third parties directly or
through underwriters or agents. Any such underwriter or agent involved in the
offer and sale of the Offered Securities will be named in the applicable
Prospectus Supplement.
The distribution of the Offered Securities may be effected from time
to time in one or more transactions at a fixed price or prices, which may be
changed, or at prices related to the prevailing market prices at the time of
sale or at negotiated prices (any of which may represent a discount from the
prevailing market prices). First Union also may, from time to time, authorize
underwriters acting as First Union's agents to offer and sell the Offered
Securities upon the terms and conditions as are set forth in the applicable
Prospectus Supplement. In connection with the sale of Offered Securities,
underwriters may be deemed to have received compensation from First Union in
the form of underwriting discounts or commissions and may also receive
commissions from purchasers of Offered Securities for whom they may act as
agent. Underwriters may sell Offered Securities to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agent.
Any underwriting compensation paid by First Union to underwriters or
agents in connection with the offering of Offered Securities, and any
discounts, concessions or commissions allowed by underwriters to participating
dealers, will be set forth in the applicable Prospectus Supplement.
Underwriters, dealers and agents participating in the distribution of the
Offered Securities may be deemed to be underwriters, and any discounts and
commissions received by them and any profit realized by them on resale of the
Offered Securities may be deemed to be underwriting discounts and commissions,
under the Securities Act. Underwriters, dealers and agents may be entitled,
under agreements entered into with First Union, to indemnification against and
contribution toward certain civil liabilities, including liabilities under the
Securities Act.
Certain of the underwriters and their affiliates may be customers of,
engage in transactions with and perform services for First Union and its
subsidiaries in the ordinary course of business.
All Offered Securities (except the Shares) will be new issues of
securities with no established trading market. Any underwriters to whom
Offered Securities are sold by First Union for public offering and sale may
make a market in such Offered Securities, but such underwriters will not be
obligated to do so and may discontinue
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<PAGE> 37
any market making at any time without notice. No assurance can be given
concerning the liquidity of the trading market for any Offered Securities.
EXPERTS
The combined financial statements and schedules as of December 31,
1994 and 1993, and for each of the three years in the period ended December 31,
1994, incorporated by reference in the Registration Statement of which this
Prospectus is a part, have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
incorporated by reference in reliance upon the authority of said firm as
experts in giving said reports.
LEGAL MATTERS
Certain legal matters relating to the validity of the Offered
Securities offered pursuant to this Prospectus will be passed upon for First
Union by Mayer, Brown & Platt. As to all matters of Ohio law, Mayer, Brown and
Platt will rely on the opinion of Paul F. Levin, Senior Vice President-General
Counsel and Secretary of First Union.
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<PAGE> 38
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
-------------------------------------------
<TABLE>
<CAPTION>
The following table sets forth the estimated expenses in connection with the issuance and distribution of the securities
registered hereby, all of which will be paid by the Registrant:
<S> <C>
SEC registration fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 68,966
Printing and duplicating expenses . . . . . . . . . . . . . . . . . . . . . . . . . 75,000
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000
Blue Sky fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,000
Rating Agency Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000
Trustee Fees (including counsel fees) . . . . . . . . . . . . . . . . . . . . . . . 20,000
Miscellaneous expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
--------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $398,966
========
</TABLE>
ITEM 15. INDEMNIFICATION OF TRUSTEES AND OFFICERS.
----------------------------------------
Pursuant to Article III, Section 3.3 of the Amended Declaration of
Trust, each Trustee, officer, employee and agent of the Registrant is entitled
to indemnification for any loss, cost, liability or obligation in connection
with the Registrant's property or the affairs of the Registrant except for such
of his own acts as constitute bad faith, willful misfeasance or willful
disregard of his duties.
The Registrant has acquired insurance indemnifying Trustees and
officers in certain cases and with certain deductible limitations.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
------------------------------------------
See Exhibit Index included herewith which is incorporated herein by
reference.
ITEM 17. UNDERTAKINGS.
------------
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement:
(i) To include any Prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed
II-1
<PAGE> 39
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the Registration Statement or any material change to
such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(i) and (a)(ii)
do not apply if the information required to be
included in a post-effective amendment by those
paragraphs is contained in periodic reports filed
with or furnished to the Commission by the Registrant
pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes to supplement the
applicable prospectus supplement, after the expiration of the subscription
period, to set forth the results of the subscription offer, the transactions by
the underwriters during the subscription period, the amount of unsubscribed
securities to be purchased by the underwriters, and the terms of any subsequent
reoffering thereof. If any public offering by the underwriters is to be made
on terms differing from those set forth on the cover page of the applicable
prospectus supplement, a post-effective amendment will be filed to set forth
the terms of such offering.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to Trustees, officers and controlling
persons of the Registrant pursuant to the provisions set forth or described in
Item 15 of this Registration Statement, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a Trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
The undersigned Registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the Indenture Trustee to act
under subsection (a) of Section 310 of the Trust Indenture Act in accordance
with the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Act.
II-2
<PAGE> 40
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cleveland, and State of Ohio, on the 15th day of
February, 1996.
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
By:/s/ James C. Mastandrea
--------------------------------
James C. Mastandrea
Chairman, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated on the 15th day of February, 1996.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ James C. Mastandrea Chairman, President and Chief Executive Officer
----------------------------------- (Principal Executive Officer and Principal Financial Officer)
James C. Mastandrea
/s/ John J. Dee Senior Vice President--Controller
----------------------------------- (Principal Accounting Officer)
John J. Dee
* Otes Bennett, Jr. Trustee
-------------------------------
Otes Bennett, Jr.
* Kenneth K. Chalmers Trustee
---------------------------
Kenneth K. Chalmers
* Allen H. Ford Trustee
------------------------------
Allen H. Ford
* Russell R. Gifford Trustee
------------------------------
Russell R. Gifford
* E. Bradley Jones Trustee
------------------------------
E. Bradley Jones
/s/ James C. Mastandrea Trustee
-----------------------------------
James C. Mastandrea
*By:/s/ Paul F. Levin
-------------------------------
Paul F. Levin, Attorney-in-Fact
</TABLE>
II-3
<PAGE> 41
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
<S> <C> <C>
4 (a) -- Declaration of Trust of Registrant dated August 1, 1961, as amended through July 25, 1986 (incorporated by
reference to Registrant's Registration Statement on Form S-3 (No. 33-4493)).
4 (b) -- By-laws of the Registrant, as amended (incorporated by reference to Registrant's Registration Statement on
Form S-3 (No. 33-4493)).
4 (c) -- Rights Agreement between the Registrant and National City Bank dated March 7, 1990 (incorporated by reference
to Registrant's Form 8-A dated March 30, 1990 (No. 0-18411)).
4 (d) -- Form of certificate for Shares of Beneficial Interest (incorporated by reference to Registrant's
Registration Statement on Form S-3 (No. 33-2818)).
4 (e) - Declaration of Trust of First Union Management, Inc. dated June 5, 1980.
4 (f) -- Form of Indenture governing the Debt Securities.
5 -- Opinion of Paul F. Levin, Esq. as to legality of the Offered Securities.
8 -- Opinion of Mayer, Brown and Platt as to certain tax matters.
12 -- Statement of Ratios of Combined Income From Operations and Combined Net Income to Fixed Charges.
23 (a) -- Consent of Arthur Andersen LLP.
23 (b) -- Consent of Paul F. Levin, Esq. included as part of Exhibit 5.
23 (c) -- Consent of Mayer, Brown and Platt included as part of Exhibit 8.
24 (a) -- Powers of Attorney.
</TABLE>
<PAGE> 1
EXHIBIT 4(e)
AMENDED AND RESTATED DECLARATION OF TRUST
-----------------------------------------
Amending and Restating Amended Declaration of Trust
Dated As Of December 31, 1971
---------------------------------------------------
THIS AMENDED DECLARATION OF TRUST made as of this 5th day of June,
1980, at Cleveland, Ohio, by Douglas Wick, Trustee, and hereafter by such
persons as may from time to time be appointed additional Trustees and
successors to such Trustees; the person or persons from time to time
constituting Trustees hereunder being referred to as the "Trustees" where the
context so permits,
W I T N E S S E T H:
WHEREAS, the Trustees desire to confirm the creation of a trust for the
purposes hereinafter mentioned and to clarify certain provisions relating to
beneficial interests hereunder,
NOW, THEREFORE, the Trustees hereby confirm the declaration of
themselves to be Trustees hereunder of One Hundred (100) shares of common stock
of First Union Management, Inc., a Delaware corporation, and of all property
which they may hereafter acquire as such Trustees, together with the proceeds
thereof and the dividends and other income therefrom, IN TRUST, on the terms
and conditions set forth in this Declaration.
ARTICLE I
Distribution of Income
----------------------
The net income of the Trust estate shall be paid at such time or times
as the Trustees in their discretion shall determine to the holders of record of
certificates representing shares of beneficial interest in First Union Real
Estate Equity and Mortgage Investments, a business trust organized as of October
1, 1961, (hereinafter referred to as "First Union") as of a date designated by
the Trustees (hereinafter referred to as the "Record
<PAGE> 2
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Date") not earlier than sixty (60) days preceding the date fixed by the
Trustees for payment, and each such holder shall be entitled to receive the
same proportion of such net income as the number of shares of First Union held
by him bears to the total number of shares of First Union outstanding on the
Record Date, whose holders are entitled to participate in the distribution;
provided, however, that such payment to each holder is contingent upon such
holder demonstrating by certification to the Trustees, or otherwise, to the
Trustees' satisfaction, that the total shares of First Union owned by him
together with shares of First Union, ownership of which is attributed to him
pursuant to Section 318(a) of the Internal Revenue Code, do not exceed 5% of
the then outstanding shares of First Union. No person shall have any beneficial
interest in the Trust so long as such person owns, directly or indirectly by
attribution pursuant to the Internal Revenue Code or otherwise, more than 5% of
the then outstanding shares of First Union; however, upon such person's
transfer of any shares of First Union, any transferee who becomes a holder of
record of such shares shall become a beneficiary of the Trust to the extent
provided herein.
ARTICLE II
Duration of the Trust - Termination
-----------------------------------
Section 2.01. Duration of the Trust. This trust shall continue without
limitation of time except that, in the event that any applicable statute or
rule of law shall require that this trust not continue perpetually, then the
trust shall continue for the longest period of time permitted by law, and, to
the extent that measuring lives in being are required to determine the terms of
the trust, such measuring lives in being shall be the persons designated in
Section 12.1 of the Declaration of Trust of First Union.
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Section 2.02. EFFECT OF TERMINATION. Upon termination of this trust,
the Trustees shall make provision for the payment of all outstanding
obligations, taxes and other liabilities, accrued or contingent of the trust
estate, shall sell the remaining assets of the trust estate and shall, at such
time or times as the Trustees in their discretion shall determine, distribute
the proceeds derived from the sale of such remaining assets to the holders of
record of certificates representing shares of beneficial interest in First
Union as of a date fixed by the Trustees (the Record Date) not earlier than 60
days preceding the date fixed by the Trustees for the distribution, and each
such holder shall be entitled to receive the same proportion of such proceeds
as the number of shares held by him on the Record Date bears to the total
number of shares of First Union outstanding on the Record Date whose holders
are entitled to participate in the distribution; provided, however, that such
payment to each holder is contingent upon such holder demonstrating by
certification to the Trustees, or otherwise, to the Trustees' satisfaction,
that the total shares of First Union owned by him together with shares of First
Union, ownership of which is attributed to him pursuant to Section 318(a) of
the Internal Revenue Code, do not exceed 5% of the then outstanding shares of
First Union. For purposes of such distribution on termination and for all other
purposes, no person shall have any beneficial interest in the Trust so long as
such person owns, directly or indirectly by attribution pursuant to the
Internal Revenue Code or otherwise, more than 5% of the then outstanding shares
of First Union; however, upon such person's transfer of any shares of First
Union, any transferee who becomes a holder of record of such shares shall
become a beneficiary of the Trust to the extent provided herein.
<PAGE> 4
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ARTICLE III
Powers and Duties of Trustees - Compensation
--------------------------------------------
Section 3.01. POWERS AND DUTIES. The Trustees shall have the
following powers, in addition to any powers conferred upon the Trustees by law
or other Articles of this Declaration of Trust, all of which powers shall be
exercised in a fiduciary capacity:
(a) To retain the assets initially comprising the trust estate and any
share dividends and distributions (subject to Section 2.01 above)
in respect of such assets, regardless of the proportionate value
any investment or any class or type of investment may bear to the
total value of the trust estate, and without being limited to the
classes of investment which a trustee is authorized by law or any
rule of court to make;
(b) To receive and retain additions to the trust estate from any
source whatsoever, such additions to be held hereunder as though
the same had initially constituted a part of the trust estate;
(c) To exercise voting rights and issue proxies upon or in connection
with any stock or other securities in the trust estate as the
Trustee shall determine;
(d) To participate in reorganizations, recapitalizations,
reincorporations, consolidations, mergers, exchanges,
liquidations and creditors' and bondholders' agreements;
(e) To compromise, compound, release and discharge all debts and
claims of every kind, nature or description owing to or by the
trust estate;
(f) To employ accountants, agents and attorneys; and
(g) To dispose of the assets of the trust estate upon the termination
of this trust and to distribute the proceeds derived therefrom in
accordance with the provisions of Article II hereof.
The approval of a majority of the Trustees shall be necessary for the
exercise of any power granted hereunder. The powers of the Trustees hereunder
may be exercised without order of any court, but the Trustees are authorized,
in the event they deem it advisable, to apply to any court of
<PAGE> 5
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competent jurisdiction for any interpretation of any of the provisions of this
instrument or for instructions with respect to their administration of the
trust created hereunder. Notwithstanding anything to the contrary herein
contained, the Trustees by virtue of their status as Trustees hereunder shall
have no power to issue certificates representing shares of beneficial interest
in the trust estate or to direct the affairs of First Union Management, Inc.
Section 3.02. CONPENSATION. Each person serving as a Trustee
hereunder shall receive such compensation as shall be reasonable and adequate
for the services rendered as determined by Arthur Andersen & Co. or any other
national accounting firm chosen by the Directors of First Union Management,
Inc. All compensation for ordinary services provided for hereunder shall be
charged against and paid from income at such times as the Trustees may
determine.
Section 3.03. TRUST RECORDS. The Trustees shall at all times keep, or
cause to be kept, accurate books with respect to the trust, and shall render at
least annually to each beneficiary who received income during the year of the
account a statement of account which shall include all the information
necessary to enable such beneficiary to prepare federal and state tax returns.
Section 3.04. TRUSTEE LIABILITY. No Trustee shall be personally
liable for any act or omission of any other Trustee (including without
limitation the failure to compel in any way any former or acting or future
Trustee to redress any breach of Trust), and no Trustee shall be personally
liable to any beneficiary, except for such of his own acts as constitute bad
faith, wilful misfeasance, gross negligence, or wilful disregard of his duties.
Except as aforesaid, each Trustee shall be entitled to reimbursement out of the
trust estate for his reasonable expenses and outlays and to be exonerated and
<PAGE> 6
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indemnified from time to time from or against any and all loss, expense and
liability arising out of or in connection with the management of the trust
estate or which he may suffer because he is or becomes or consented to become a
Trustee.
ARTICLE IV
Successor and Additional Trustees - Resignation - Qualification
---------------------------------------------------------------
Section 4.01. QUALIFICATION OF TRUSTEES. No person may be designated
as Trustee, and no person may continue to serve as Trustee, if such designation
or service would be contrary to the terms of the Internal Revenue Service
Ruling, dated February 8, 1971, a copy of which is attached hereto as Exhibit
A, or if he, or any affiliate of his, is or becomes a trustee, officer,
employee, or the beneficial owner of shares of First Union.
Section 4.02. RESIGNATION. Any Trustee may resign by written notice
to the Directors of First Union Management, Inc.
Section 4.03. ADDITIONAL AND SUCCESSOR TRUSTEES. The Trustees may at
any time and from time to time designate additional Trustees to serve
hereunder. In the event of the death, resignation, disqualification, or
incapacity of a Trustee, a successor Trustee shall be designated by the
remaining Trustees and, in the event there are no remaining Trustees, such
successor Trustee shall be as designated by the last remaining Trustee in
writing filed with the Secretary of First Union Management, Inc. at or before
the termination of his trusteeship. In the event the trusteeship is vacant and
no successor Trustee shall have been designated pursuant to the foregoing, the
trusteeship shall be filled by the Probate Court of Cuyahoga County, Ohio. Any
additional or successor Trustee designated as hereinbefore provided shall have
and enjoy all of the powers, duties, discretions and immunities herein
<PAGE> 7
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conferred upon the Trustees hereunder and shall not be required to furnish
bond.
ARTICLE V
Amendment
---------
The Trustees may amend this Declaration of Trust with the approval of a
majority of the then members of the Board of Directors of First Union
Management, Inc. in writing; provided, however, that the Trustees shall not
exercise such power of amendment without prior written advice from counsel for
First Union Management, Inc. that in such counsel's opinion the proposed
exercise would not be contrary to the terms of the Internal Revenue Service
Ruling attached hereto as Exhibit A.
ARTICLE VI
Record Date
-----------
In determining the holders of shares of First Union as of any Record
Date or as of the Termination Date and their addresses, the Trustees shall rely
conclusively upon the records of First Union's Cleveland Transfer Agent.
ARTICLE VII
Governing Law
-------------
The trust created hereby is an Ohio trust and is to be governed,
construed and administered according to the laws of Ohio and shall contine to
be so governed, construed and administered, even though the situs of the trust
is elsewhere in the United States or abroad.
ARTICLE VIII
General
-------
Anything herein to the contrary notwithstanding, the shareholders
<PAGE> 8
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of First Union shall have no rights to become the owners of the shares of First
Union Management, Inc., nor shall they have any right to control the vote of
such shares by the Trustees and their sole interest will consist of the rights
to income from, and proceeds of liquidation of, the trust estate provided in
Article I and Section 2.02, which rights are contingent on satisfying the
provisions in said Article I and said Section 2.02 above.
The Trustees will act independently in exercising the rights as
shareholders of First Union Management, Inc., and in particular will exercise
independent control of the selection of the directors, officers and policies of
First Union Management, Inc.
In exercising their rights and powers as shareholders of First Union
Management, Inc., the Trustees shall act only in a manner consistent with the
provisions of the Internal Revenue Service Ruling attached hereto as Exhibit A.
IN WITNESS WHEREOF, Douglas Wick has hereunto set his hand as of the
day and year first above written.
Executed in the presence of:
/s/ Sharon E. Wilson /s/ Douglas Wick
- ----------------------------------- -------------------------------------
Douglas Wick
/s/ Susan Hawk
- -----------------------------------
Witnesses
<PAGE> 1
Exhibit 4(f)
================================================================================
FIRST UNION REAL ESTATE EQUITY
AND MORTAGE INVESTMENTS
TO
---------------------------------
Trustee
------------------------
Indenture
Dated as of _____________, 199_
------------------------
Senior Debt Securities
================================================================================
<PAGE> 2
<TABLE>
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TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
<S> <C>
SECTION 101. Definitions ....................................................... 1
Act ........................................................................ 2
Additional Amounts ......................................................... 2
Affiliate .................................................................. 2
Authenticating Agent ....................................................... 2
Authorized Newspaper ....................................................... 2
Bankruptcy Law ............................................................. 2
Bearer Security ............................................................ 2
Board of Trustees .......................................................... 2
Board Resolution ........................................................... 2
Business Day ............................................................... 3
CEDEL ...................................................................... 3
Commission ................................................................. 3
Company .................................................................... 3
Company Request ............................................................ 3
Company Order .............................................................. 3
Conversion Event ........................................................... 3
Corporate Trust Office ..................................................... 3
corporation ................................................................ 3
coupon ..................................................................... 3
Custodian .................................................................. 4
Defaulted Interest ......................................................... 4
Dollar" or "$ .............................................................. 4
DTC ........................................................................ 4
ECU ........................................................................ 4
Euroclear .................................................................. 4
European Communities ....................................................... 4
European Monetary System ................................................... 4
Event of Default ........................................................... 4
Exchange Act ............................................................... 4
Foreign Currency ........................................................... 4
GAAP ....................................................................... 4
Government Obligations ..................................................... 4
Holder ..................................................................... 5
Indenture .................................................................. 5
Indexed Security ........................................................... 5
</TABLE>
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<TABLE>
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<S> <C>
interest ................................................................... 5
Interest Payment Date ...................................................... 5
Make-Whole Amount .......................................................... 6
Maturity ................................................................... 6
Officers' Certificate ...................................................... 6
Opinion of Counsel ......................................................... 6
Original Issue Discount Security ........................................... 6
Outstanding ................................................................ 6
Paying Agent ............................................................... 7
Person ..................................................................... 7
Place of Payment ........................................................... 7
Predecessor Security ....................................................... 8
Redemption Date ............................................................ 8
Redemption Price ........................................................... 8
Registered Security ........................................................ 8
Regular Record Date ........................................................ 8
Repayment Date ............................................................. 8
Repayment Price ............................................................ 8
Responsible Officer ........................................................ 8
Securities Act ............................................................. 8
Security ................................................................... 8
Security Register" and "Security Registrar ................................. 9
Significant Subsidiary ..................................................... 9
Special Record Date ........................................................ 9
Stated Maturity ............................................................ 9
Subsidiary ................................................................. 9
Trust Indenture Act" or "TIA ............................................... 9
Trustee .................................................................... 9
United States .............................................................. 9
United States person ....................................................... 9
Yield to Maturity .......................................................... 10
SECTION 102. Compliance Certificates and Opinions............................... 10
SECTION 103. Form of Documents Delivered to Trustee ............................ 10
SECTION 104. Acts of Holders ................................................... 11
SECTION 105. Notices, etc., to Trustee and Company ............................. 13
SECTION 106. Notice to Holders; Waiver ......................................... 13
SECTION 107. Effect of Headings and Table of Contents .......................... 14
SECTION 108. Successors and Assigns ............................................ 14
SECTION 109. Separability Clause ............................................... 15
SECTION 110. Benefits of Indenture ............................................. 15
</TABLE>
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SECTION 111. No Personal Liability ....................................... 15
SECTION 112. Governing Law ............................................... 15
SECTION 113. Legal Holidays............................................... 15
ARTICLE TWO
SECURITIES FORMS
SECTION 201. Forms of Securities ......................................... 16
SECTION 202. Form of Trustee's Certificate of Authentication ............. 16
SECTION 203. Securities Issuable in Global Form .......................... 16
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series......................... 17
SECTION 302. Denominations ............................................... 21
SECTION 303. Execution, Authentication, Delivery and Dating .............. 22
SECTION 304. Temporary Securities ........................................ 24
SECTION 305. Registration, Registration of Transfer and Exchange ......... 27
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities ............ 30
SECTION 307. Payment of Interest; Interest Rights Preserved .............. 31
SECTION 308. Persons Deemed Owners ....................................... 33
SECTION 309. Cancellation ................................................ 34
SECTION 310. Computation of Interest ..................................... 35
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture ..................... 35
SECTION 402. Application of Trust Funds .................................. 36
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default ........................................... 37
SECTION 502. Acceleration of Maturity; Rescission and Annulment........... 39
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee .................................. 40
SECTION 504. Trustee May File Proofs of Claim ............................ 41
</TABLE>
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SECTION 505. Trustee May Enforce Claims Without Possession
of Securities or Coupons ................................ 42
SECTION 506. Application of Money Collected .............................. 42
SECTION 507. Limitation on Suits ......................................... 42
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium or Make-Whole Amount, if
any, Interest and Additional Amounts .................... 43
SECTION 509. Restoration of Rights and Remedies .......................... 43
SECTION 510. Rights and Remedies Cumulative .............................. 43
SECTION 511. Delay or Omission Not Waiver ................................ 44
SECTION 512. Control by Holders of Securities ............................ 44
SECTION 513. Waiver of Past Defaults ..................................... 44
SECTION 514. Waiver of Usury, Stay or Extension Laws ..................... 45
SECTION 515. Undertaking for Costs ....................................... 45
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults ........................................... 45
SECTION 602. Certain Rights of Trustee .................................... 46
SECTION 603. Not Responsible for Recitals or Issuance of Securities ....... 47
SECTION 604. May Hold Securities .......................................... 47
SECTION 605. Money Held in Trust .......................................... 47
SECTION 606. Compensation and Reimbursement ............................... 48
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
Interests................................................. 48
SECTION 608. Resignation and Removal; Appointment of Successor ............ 48
SECTION 609. Acceptance of Appointment by Successor ....................... 50
SECTION 610. Merger, Conversion, Consolidation or Succession to Business .. 51
SECTION 611. Appointment of Authenticating Agent .......................... 52
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders ................. 53
SECTION 702. Reports by Trustee ........................................... 54
SECTION 703. Reports by Company ........................................... 54
SECTION 704. Company to Furnish Trustee Names and Addresses of
Holders .................................................. 54
</TABLE>
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ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
<S> <C> <C>
SECTION 801. Consolidations and Mergers of Company and Sales, Leases
and Conveyances Permitted Subject to Certain
Conditions ............................................... 55
SECTION 802. Rights and Duties of Successor Corporation ................... 55
SECTION 803. Officers' Certificate and Opinion of Counsel ................. 56
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders............ 56
SECTION 902. Supplemental Indentures with Consent of Holders .............. 58
SECTION 903. Execution of Supplemental Indentures.......................... 59
SECTION 904. Effect of Supplemental Indentures ............................ 59
SECTION 905. Conformity with Trust Indenture Act .......................... 59
SECTION 906. Reference in Securities to Supplemental Indentures............ 59
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium or Make-Whole Amount,
if any, Interest and Additional Amounts .................. 60
SECTION 1002. Maintenance of Office or Agency ............................. 60
SECTION 1003. Money for Securities Payments to Be Held in Trust............ 62
SECTION 1004. [Reserved] .................................................. 63
SECTION 1005. Existence ................................................... 63
SECTION 1006. Maintenance of Properties ................................... 64
SECTION 1007. Insurance ................................................... 64
SECTION 1008. Payment of Taxes and Other Claims ........................... 64
SECTION 1009. Provision of Financial Information .......................... 64
SECTION 1010. Statement as to Compliance .................................. 65
SECTION 1011. Additional Amounts .......................................... 65
SECTION 1012. Waiver of Certain Covenants ................................. 66
</TABLE>
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ARTICLE ELEVEN
REDEMPTION OF SECURITIES
<S> <C> <C>
SECTION 1101. Applicability of Article .................................... 66
SECTION 1102. Election to Redeem; Notice to Trustee ....................... 66
SECTION 1103. Selection by Trustee of Securities to Be Redeemed............ 67
SECTION 1104. Notice of Redemption ........................................ 67
SECTION 1105. Deposit of Redemption Price ................................. 69
SECTION 1106. Securities Payable on Redemption Date ....................... 69
SECTION 1107. Securities Redeemed in Part ................................. 70
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article .................................... 70
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities........ 70
SECTION 1203. Redemption of Securities for Sinking Fund ................... 71
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article .................................... 71
SECTION 1302. Repayment of Securities ..................................... 71
SECTION 1303. Exercise of Option .......................................... 72
SECTION 1304. When Securities Presented for Repayment Become Due and
Payable................................................... 72
SECTION 1305. Securities Repaid in Part ................................... 73
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article; Company's Option to Effect
Defeasance or Covenant Defeasance ........................ 74
SECTION 1402. Defeasance and Discharge .................................... 74
SECTION 1403. Covenant Defeasance ......................................... 75
SECTION 1404. Conditions to Defeasance or Covenant Defeasance ............. 75
SECTION 1405. Deposited Money and Government Obligations to Be Held in.....
Trust; Other Miscellaneous Provisions .................... 77
</TABLE>
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ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
<S> <C> <C>
SECTION 1501. Purposes for Which Meetings May Be Called ................ 78
SECTION 1502. Call, Notice and Place of Meetings ....................... 78
SECTION 1503. Persons Entitled to Vote at Meetings ..................... 79
SECTION 1504. Quorum; Action ........................................... 79
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment
of Meetings .......................................... 80
SECTION 1506. Counting Votes and Recording Action of Meetings .......... 81
SECTION 1507. Evidence of Action Taken by Holders ...................... 82
SECTION 1508. Proof of Execution of Instruments ........................ 82
</TABLE>
TESTIMONIUM
SIGNATURES AND SEALS
ACKNOWLEDGMENTS
EXHIBIT A - FORMS OF CERTIFICATION
vii
<PAGE> 9
FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS
Reconciliation and tie between Trust Indenture Act of 1939, as amended (the
"1939 Act"), and Indenture, dated as of________________, 199__
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
<S> <C>
Section 310(a)(1)......................................... 607(a)
(a)(2)......................................... 607(a)
(b)............................................ 607(b), 608
Section 312(c)............................................ 701
Section 313(a)............................................ 702
Section 313(c)............................................ 601
Section 314(a)............................................ 703
(a)(4)......................................... 1011
(c)(1)......................................... 102
(c)(2)......................................... 102
(e)............................................ 102
Section 315(b)............................................ 601
Section 316(a) (last sentence)............................ 101 ("Outstanding")
(a)(1)(A)...................................... 502, 512
(a)(1)(B)...................................... 513
(b)............................................ 508
Section 317(a)(1)......................................... 503
(a)(2)......................................... 504
Section 318(a)............................................ 112
(c)............................................ 112
</TABLE>
- ----------------------
NOTE: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.
Attention should also be directed to Section 318(c) of the 1939 Act,
which provides that the provisions of Sections 310 to and including 317
of the 1939 Act are a part of and govern every qualified indenture,
whether or not physically contained therein.
viii
<PAGE> 10
INDENTURE, dated as of ___________ __, 199___, between FIRST UNION
REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS, an Ohio business trust operating
as a real estate investment trust (hereinafter called the "Company"), having
its principal office at 55 Public Square, Suite 1900, Cleveland, Ohio 44113 and
[NAME OF TRUSTEE], a ______________ banking corporation, as Trustee hereunder
(hereinafter called the "Trustee"), having its Corporate Trust Office at
_________________________________________.
RECITALS OF THE COMPANY
The Company deems it necessary to issue from time to time for its
lawful purposes senior debt securities (hereinafter called the "Securities")
evidencing its unsecured and unsubordinated indebtedness, and has duly
authorized the execution and delivery of this Indenture to provide for the
issuance from time to time of the Securities, unlimited as to aggregate
principal amount, to bear interest at the rates or formulas, to mature at such
times and to have such other provisions as shall be fixed therefor as
hereinafter provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions. For all purposes of this Indenture, except
as otherwise expressly provided or the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as
the singular;
(2) all other terms used herein which are defined in the
TIA, either directly or by reference therein, have the meanings
assigned to them therein, and the terms "cash transaction" and
"self-liquidating paper," as used in TIA Section 311, shall have the
meanings assigned to them in the rules of the Commission adopted under
the TIA;
(3) all accounting terms not otherwise defined herein
shall have the meanings assigned to them in accordance with GAAP; and
1
<PAGE> 11
(4) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
Certain terms, used principally in Article Three, Article Five,
Article Six and Article Ten, are defined in those Articles. In addition, the
following terms shall have the indicated respective meanings:
"Act" has the meaning specified in Section 104.
"Additional Amounts" means any additional amounts which are required
by a Security, under circumstances specified therein, to be paid by the Company
in respect of certain taxes imposed on certain Holders and which are owing to
such Holders.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any authenticating agent appointed by the
Trustee pursuant to Section 611.
"Authorized Newspaper" means a newspaper, printed in the English
language or in an official language of the country of publication, customarily
published on each Business Day, whether or not published on Saturdays, Sundays
or holidays, and of general circulation in each place in connection with which
the term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any Business Day.
"Bankruptcy Law" has the meaning specified in Section 501.
"Bearer Security" means a Security which is payable to bearer.
"Board of Trustees" means the board of trustees of the Company, the
executive committee or any other committee of that board duly authorized to act
for it in respect hereof.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Trustees, and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
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"Business Day" when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Securities
means, unless otherwise specified with respect to any Securities pursuant to
Section 301, any day, other than a Saturday or Sunday, that is neither a legal
holiday nor a day on which banking institutions in that Place of Payment or
particular location are authorized or required by law, regulation or executive
order to close.
"CEDEL" means Centrale de Livraison de Valeurs Mobilieres, S.A., or
its successor.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties on such date.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by its Chairman of the Board
of Trustees, the President, the Chief Financial Officer, a Senior Vice
President, or a Vice President, and by its Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
"Conversion Event" means the cessation of use of (i) a Foreign
Currency (other than the ECU or other currency unit) both by the government of
the country which issued such currency and for the settlement of transactions
by a central bank or other public institutions of or within the international
banking community, (ii) the ECU both within the European Monetary System and
for the settlement of transactions by public institutions of or within the
European Communities or (iii) any currency unit (or composite currency) other
than the ECU for the purposes for which it was established.
"Corporate Trust Office" means the office of the Trustee at which, at
any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at ___________________.
"corporation" includes corporations, associations, companies and
business trusts.
"coupon" means any interest coupon appertaining to a Bearer Security.
"Custodian" has the meaning set forth in Section 501.
"Defaulted Interest" has the meaning specified in Section 307.
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"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States of America as at the time shall be legal
tender for the payment of public and private debts.
"DTC" means The Depository Trust Company.
"ECU" means the European Currency Unit as defined and revised from
time to time by the Council of the European Communities.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
Office, or its successor as operator of the Euroclear System.
"European Communities" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community.
"European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the
European Communities.
"Event of Default" has the meaning specified in Article Five.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder by the Commission.
"Foreign Currency" means any currency, currency unit or composite
currency, including, without limitation, the ECU issued by the government of
one or more countries other than the United States of America or by any
recognized confederation or association of such governments.
"GAAP" means generally accepted accounting principles as used in the
United States applied on a consistent basis as in effect from time to time;
provided, that solely for purposes of calculating the financial covenants
contained herein, "GAAP" shall mean generally accepted accounting principles as
used in the United States on the date hereof, applied on a consistent basis.
"Government Obligations" means securities which are (i) direct
obligations of the United States of America or the government which issued the
Foreign Currency in which the Securities of a particular series are payable,
for the payment of which its full faith and credit is pledged or (ii)
obligations of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which issued
the Foreign Currency in which the Securities of such series are payable, the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other government, which, in
either case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank or trust
company
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as custodian with respect to any such Government Obligation or a specific
payment of interest on or principal of any such Government Obligation held by
such custodian for the account of the holder of a depository receipt, provided
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the Government Obligation or
the specific payment of interest on or principal of the Government Obligation
evidenced by such depository receipt.
"Holder" means, in the case of a Registered Security, the Person in
whose name a Security is registered in the Security Register and, in the case
of a Bearer Security, the bearer thereof and, when used with respect to any
coupon, shall mean the bearer thereof.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
and shall include the terms of particular series of Securities established as
contemplated by Section 301; provided, however, that, if at any time more than
one Person is acting as Trustee under this instrument, "Indenture" shall mean,
with respect to any one or more series of Securities for which such Person is
Trustee, this instrument as originally executed or as it may from time to time
be supplemented or amended by one or more indentures supplemental hereto
entered into pursuant to the applicable provisions hereof and shall include the
terms of the or those particular series of Securities for which such Person is
Trustee established as contemplated by Section 301, exclusive, however, of any
provisions or terms which relate solely to other series of Securities for which
such Person is not Trustee, regardless of when such terms or provisions were
adopted, and exclusive of any provisions or terms adopted by means of one or
more indentures supplemental hereto executed and delivered after such Person
had become such Trustee but to which such Person, as such Trustee, was not a
party.
"Indexed Security" means a Security the terms of which provide that
the principal amount thereof payable at Stated Maturity may be more or less
than the principal face amount thereof at original issuance.
"interest" when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, shall mean
interest payable after Maturity, and, when used with respect to a Security
which provides for the payment of Additional Amounts pursuant to Section 1011,
includes such Additional Amounts.
"Interest Payment Date" means, when used with respect to any Security,
the Stated Maturity of an installment of interest on such Security.
"Make-Whole Amount" means the amount, if any, in addition to principal
which is required by a Security, under the terms and conditions specified
therein or as otherwise specified
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as contemplated by Section 301, to be paid by the Company to the Holder thereof
in connection with any optional redemption or accelerated payment of such
Security.
"Maturity" means, when used with respect to any Security, the date on
which the principal of such Security or an installment of principal become due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment, repurchase or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board of Trustees, the President, the Chief Financial Officer or a Vice
President and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company or other counsel satisfactory to the
Trustee.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or
redemption or repayment at the option of the Holder money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the holders of such Securities and any coupons
appertaining thereto; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Indenture or other provision therefor satisfactory to the Trustee
has been made;
(iii) Securities, except solely to the extent provided in
Sections 401, 1402 or 1403, as applicable, with respect to which the
Company has effected defeasance and/or covenant defeasance as provided
in Articles Four or Fourteen; and
(iv) Securities which have been paid pursuant to Section
306 or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been
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presented to the Trustee proof satisfactory to it that such Securities
are held by a bona fide purchaser in whose hands such Securities are
valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 502, (ii) the principal amount of any Security denominated
in a Foreign Currency that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be equal
to the Dollar equivalent, determined pursuant to Section 301 as of the date such
Security is originally issued by the Company, of the principal amount (or, in
the case of an Original Issue Discount Security, the Dollar equivalent as of
such date of original issuance of the amount determined as provided in clause
(i) above) of such Security, (iii) the principal amount of any Indexed Security
that may be counted in making such determination or calculation and that shall
be deemed outstanding for such purpose shall be equal to the principal face
amount of such Indexed Security at original issuance, unless otherwise provided
with respect to such Indexed Security pursuant to Section 301, and (iv)
Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in making such calculation or in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium or Make-Whole Amount, if any) or interest on any
Securities or coupons on behalf of the Company, or if no such Person is
authorized, the Company.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment" means, when used with respect to the Securities of
or within any series, the Corporate Trust Office of the Trustee and any place
or places which the Company may from time to time designate as the place or
places where the principal of (and premium or Make-Whole Amount, if any) and
interest on such Securities are payable as specified as
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contemplated by Sections 301 and 1002 and presentations, surrenders, notices and
demands with respect to the Securities and this Indenture may be made.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
"Redemption Date" means, when used with respect to any Security to be
redeemed, in whole or in part, the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price" means, when used with respect to any Security to be
redeemed, the price at which it is to be redeemed pursuant to this Indenture.
"Registered Security" means any Security which is registered in the
Security Register.
"Regular Record Date" for the installment of interest payable on any
Interest Payment Date on the Registered Securities of or within any series
means the date specified for that purpose as contemplated by Section 301,
whether or not a Business Day.
"Repayment Date" means, when used with respect to any Security to be
repaid or repurchased at the option of the Holder, the date fixed for such
repayment or repurchase by or pursuant to this Indenture.
"Repayment Price" means, when used with respect to any Security to be
repaid or repurchased at the option of the Holder, the price at which it is to
be repaid or repurchased by or pursuant to this Indenture.
"Responsible Officer" means, when used with respect to the Trustee,
any officer of the Trustee in the corporate trust department or similar group
of the Trustee or with respect to any particular matter arising hereunder, any
officer of the Trustee to whom such matter has been assigned.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder by the Commission.
"Security" has the meaning stated in the first recital of this
Indenture and, more particularly, means any Security or Securities
authenticated and delivered under this Indenture; provided, however, that, if
at any time there is more than one Person acting as Trustee under this
Indenture, "Securities" with respect to the Indenture as to which such Person
is Trustee shall
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have the meaning stated in the first recital of this Indenture and shall more
particularly mean Securities authenticated and delivered under this Indenture,
exclusive, however, of Securities of or within any series as to which such
Person is not Trustee.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" (within the meaning of Regulation S-X, promulgated under the
Securities Act) of the Company.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of or within any series means a date fixed by the Trustee
pursuant to Section 307.
"Stated Maturity" means, when used with respect to any Security or any
installment of principal thereof or interest thereon, the date specified in
such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which a majority of (a) the voting power of the voting equity
securities or (b) in the case of a partnership or any other entity other than a
corporation, the outstanding equity interests of which are owned, directly or
indirectly, by such Person. For the purposes of this definition, "voting
equity securities" means equity securities having voting power for the election
of directors, whether at all times or only so long as no senior class of
security has such voting power by reason of any contingency.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended and as in force at the date as of which this Indenture was executed,
except as provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder;
provided, however, that if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of or within any series shall
mean only the Trustee with respect to the Securities of that series.
"United States" means, unless otherwise specified with respect to any
Securities pursuant to Section 301, the United States of America (including the
states and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.
"United States person" means, unless otherwise specified with respect
to any Securities pursuant to Section 301, an individual who is a citizen or
resident of the United States, a
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corporation, partnership or other entity created or organized in or under the
laws of the United States or an estate or trust the income of which is subject
to United States federal income taxation regardless of its source.
"Yield to Maturity" means the yield to maturity, computed at the time
of issuance of a Security (or, if applicable, at the most recent
redetermination of interest on such Security) and as set forth in such Security
in accordance with generally accepted United States bond yield computation
principles.
SECTION 102. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture (including covenants, compliance with which constitute
conditions precedent) relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (excluding certificates
delivered pursuant to Section 1010) shall include:
(1) a statement that each individual signing such
certificate or opinion has read such condition or covenant and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether
or not such condition or covenant has been complied with; and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may
certify or give an opinion as to some matters and one or more other such
Persons as to other
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matters, and any such Person may certify or give an opinion as to such matters
in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows that the certificate or
opinion or representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of the Outstanding Securities of all
series or one or more series, as the case may be, may be embodied in
and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agents duly appointed in
writing. If Securities of a series are issuable as Bearer Securities,
any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by
Holders of Securities of such series may, alternatively, be embodied
in and evidenced by the record of Holders of Securities of such series
voting in favor thereof, either in person or by proxies duly appointed
in writing, at any meeting of Holders of Securities of such series
duly called and held in accordance with the provisions of Article
Fifteen, or a combination of such instruments and any such record.
Except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments or record or both
are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instrument and any such
record (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Holders signing such
instrument or instruments or so voting at any such meeting. Proof of
execution of any such instrument or of a writing appointing any such
agent, or of the holding by any Person of a Security, shall be
sufficient for any purpose of this Indenture and conclusive in favor
of the Trustee and the Company and any agent of the Trustee or the
Company, if made in the manner provided in this Section. The record
of any meeting of Holders of Securities shall be proved in the manner
provided in Section 1506.
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(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved by the affidavit of a
witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgements of deeds,
certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument
or writing, or the authority of the Person executing the same, may
also be proved in any other reasonable manner which the Trustee deems
sufficient.
(c) The ownership of Registered Securities shall be
proved by the Security Register.
(d) The ownership of Bearer Securities may be proved by
the production of such Bearer Securities or by a certificate executed,
as depositary, by any trust company, bank, banker or other depositary,
wherever situated, if such certificate shall be deemed by the Trustee
to be satisfactory, showing that at the date therein mentioned such
Person had on deposit with such depositary, or exhibited to it, the
Bearer Securities therein described; or such facts may be proved by
the certificate or affidavit of the Person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee
to be satisfactory. The Trustee and the Company may assume that such
ownership of any Bearer Security continues until (1) another
certificate or affidavit bearing a later date issued in respect of the
same Bearer Security is produced, or (2) such Bearer Security is
produced to the Trustee by some other Person, or (3) such Bearer
Security is surrendered in exchange for a Registered Security, or (4)
such Bearer Security is no longer Outstanding. The ownership of
Bearer Securities may also be proved in any other manner which the
Trustee deems sufficient.
(e) If the Company shall solicit from the Holders of
Registered Securities any request, demand, authorization, direction,
notice, consent, waiver or other Act, the Company may, at its option,
in or pursuant to a Board Resolution, fix in advance a record date for
the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but
the Company shall have no obligation to do so. Notwithstanding TIA
Section 316(c), such record date shall be the record date specified in
or pursuant to such Board Resolution, which shall be a date not
earlier than the date 30 days prior to the first solicitation of
Holders generally in connection therewith and not later than the date
such solicitation is completed. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or
other Act may be given before or after such record date, but only the
Holders of record at the close of business on such record date shall
be deemed to be Holders for the purposes of determining whether
Holders of the requisite proportion of Outstanding
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Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be computed
as of such record date; provided that no such authorization, agreement
or consent by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions
of this Indenture not later than eleven months after the record date.
(f) Any request, demand, authorization, direction,
notice, consent, waiver or other Act of the Holder of any Security
shall bind every future Holder of the same Security and the Holder of
every Security issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee, any Security Registrar,
any Paying Agent, any Authenticating Agent or the Company in reliance
thereon, whether or not notation of such action is made upon such
Security.
SECTION 105. Notices, etc., to Trustee and Company. Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given
or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Administration, or
(2) The Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first class postage
prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this Indenture or
at any other address previously furnished in writing to the Trustee by
the Company.
SECTION 106. Notice to Holders; Waiver. Where this Indenture provides
for notice of any event to Holders of Registered Securities by the Company or
the Trustee, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each such Holder affected by such event, at his address as it appears in the
Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders of Registered Securities is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders of Registered Securities or the sufficiency of any notice to
Holders of Bearer Securities given as provided herein. Any notice mailed to a
Holder in the manner herein prescribed shall be conclusively deemed to have
been received by such Holder, whether or not such Holder actually receives such
notice.
If by reason of the suspension of or irregularities in regular mail
service or by reason of any other cause it shall be impracticable to give such
notice by mail, then such notification to
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Holders of Registered Securities as shall be made with the approval of the
Trustee shall constitute a sufficient notification to such Holders for every
purpose hereunder.
Except as otherwise expressly provided herein or otherwise specified
with respect to any Securities pursuant to Section 301, where this Indenture
provides for notice to Holders of Bearer Securities of any event, such notices
shall be sufficiently given if published in an Authorized Newspaper in The City
of New York and in such other city or cities as may be specified in such
Securities, and if the Securities of such series are listed on any stock
exchange outside the United States, in any place at which such Securities are
listed on a securities exchange to the extent that such securities exchange so
requires, on a Business Day, such publication to be not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. Any such notice shall be deemed to have been given on the date of such
publication or, if published more than once, on the date of the first such
publication.
If by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to any particular Holder of Bearer Securities as provided above,
nor any defect in any notice so published, shall affect the sufficiency of such
notice with respect to other Holders of Bearer Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of
the country of publication.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken
in reliance upon such waiver.
SECTION 107. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 108. Successors and Assigns. All covenants and agreements in
this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
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SECTION 109. Separability Clause. In case any provision in this
Indenture or in any Security or coupon shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 110. Benefits of Indenture. Nothing in this Indenture or in
the Securities or coupons appertaining thereto, express or implied, shall give
to any Person, other than the parties hereto, any Security Registrar, any
Paying Agent, any Authenticating Agent and their successors hereunder and the
Holders any benefit or any legal or equitable right, remedy or claim under this
Indenture.
SECTION 111. No Personal Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, in any Security
or coupon appertaining thereto, or because of any indebtedness evidenced
thereby, shall be had against any promoter, as such or, against any past,
present or future shareholder, officer, trustee or employee, as such, of the
Company or of any successor, either directly or through the Company or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Securities by the Holders thereof and as part of the
consideration for the issue of the Securities.
SECTION 112. Governing Law. THIS INDENTURE AND THE SECURITIES AND
COUPONS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
STATE OF NEW YORK. THIS INDENTURE IS SUBJECT TO THE PROVISIONS OF THE TIA THAT
ARE REQUIRED TO BE PART OF THIS INDENTURE AND SHALL, TO THE EXTENT APPLICABLE,
BE GOVERNED BY SUCH PROVISIONS.
SECTION 113. Legal Holidays. In any case where any Interest Payment
Date, Redemption Date, Repayment Date, sinking fund payment date, Stated
Maturity or Maturity of any Security shall not be a Business Day at any Place
of Payment, then (notwithstanding any other provision of this Indenture or any
Security or coupon other than a provision in the Securities of any series which
specifically states that such provision shall apply in lieu hereof), payment of
interest or any Additional Amounts or principal (and premium or Make-Whole
Amount, if any) need not be made at such Place of Payment on such date, but may
be made on the next succeeding Business Day at such Place of Payment with the
same force and effect as if made on the Interest Payment Date, Redemption Date,
Repayment Date or sinking fund payment date, or at the Stated Maturity or
Maturity, provided that no interest shall accrue on the amount so payable for
the period from and after such Interest Payment Date, Redemption Date,
Repayment Date, sinking fund payment date, Stated Maturity or Maturity, as the
case may be.
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ARTICLE TWO
SECURITIES FORMS
SECTION 201. Forms of Securities. The Registered Securities, if any,
of each series and the Bearer Securities, if any, and related coupons of each
series, shall be in substantially the forms as shall be established in or
pursuant to one or more indentures supplemental hereto or Board Resolutions,
shall have such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture or any indenture
supplemental hereto, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements placed thereon
as the Company may deem appropriate and as are not inconsistent with the
provisions of this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Securities may be listed, or to
conform to usage.
Unless otherwise specified as contemplated by Section 301, Bearer
Securities shall have interest coupons attached.
The definitive Securities and coupons shall be printed, lithographed
or engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities or coupons, as evidenced
by their execution of such Securities or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication. Subject
to Section 611, the Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
[NAME OF TRUSTEE],
as Trustee
By
---------------------------------
Authorized Officer
SECTION 203. Securities Issuable in Global Form. If Securities of or
within a series are issuable in global form, as specified as contemplated by
Section 301, then, notwithstanding clause (8) of Section 301 and the provisions
of Section 302, any such Security shall represent such of the Outstanding
Securities of such series as shall be specified therein and may provide that it
shall represent the aggregate amount of Outstanding Securities of such series
from time to time endorsed thereon and that the aggregate amount of Outstanding
Securities of such series
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represented thereby may from time to time be increased or decreased to
reflect exchanges. Any endorsement of a Security in global form to reflect the
amount, or any increase or decrease in the amount, of Outstanding Securities
represented thereby shall be made by the Trustee in such manner and upon
instructions given by such Person or Persons as shall be specified therein or
in the Company Order to be delivered to the Trustee pursuant to Section 303 or
304. Subject to the provisions of Section 303 and, if applicable, Section 304,
the Trustee shall deliver and redeliver any Security in permanent global form
in the manner and upon instructions given by the Person or Persons specified
therein or in the applicable Company Order. If a Company Order pursuant to
Section 303 or 304 has been, or simultaneously is, delivered, any instructions
by the Company with respect to endorsement or delivery or redelivery of a
Security in global form shall be in writing but need not comply with Section
102 and need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 303.
Notwithstanding the provisions of Section 307, unless otherwise
specified as contemplated by Section 301, payment of principal of and any
premium or Make-Whole Amount and interest on any Security in permanent global
form shall be made to the Person or Persons specified therein.
Notwithstanding the provisions of Section 308 and except as provided
in the preceding paragraph, the Company, the Trustee and any agent of the
Company and the Trustee shall treat as the Holder of such principal amount of
Outstanding Securities represented by a permanent global Security (i) in the
case of a permanent global Security in registered form, the Holder of such
permanent global Security in registered form, or (ii) in the case of a
permanent global Security in bearer form, Euroclear or CEDEL.
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to one or more Board Resolutions, or indentures
supplemental hereto, prior to the issuance of Securities of any series, any or
all of the following, as applicable (each of which (except for the matters set
forth in clauses (1), (2) and (15) below), if so provided, may be
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determined from time to time by the Company with respect to unissued Securities
of or within the series when issued from time to time):
(1) the title of the Securities of or within the series
(which shall distinguish the Securities of such series from all other
series of Securities);
(2) any limit upon the aggregate principal amount of the
Securities of or within the series that may be authenticated and
delivered under this Indenture (except for Securities authenticated
and delivered upon registration of transfer of, or in exchange for, or
in lieu of, other Securities of or within the series pursuant to
Section 304, 305, 306, 906, 1107 or 1305);
(3) the date or dates, or the method by which such date
or dates will be determined, on which the principal of the Securities
of or within the series shall be payable and the amount of principal
payable thereon;
(4) the rate or rates at which the Securities of or within
the series shall bear interest, if any, or the method by which such
rate or rates shall be determined, the date or dates from which such
interest shall accrue or the method by which such date or dates shall
be determined, the Interest Payment Dates on which such interest will
be payable and the Regular Record Date, if any, for the interest
payable on any Registered Security on any Interest Payment Date, or the
method by which such date shall be determined, and the basis upon which
interest shall be calculated if other than that of a 360-day year
comprised of twelve 30-day months;
(5) the place or places, if any, other than or in
addition to location of the Corporate Trust Office where the principal
of (and premium or Make-Whole Amount, if any), interest, if any, on,
and Additional Amounts, if any, payable in respect of, Securities of
or within the series shall be payable, any Registered Securities of or
within the series may be surrendered for registration of transfer,
exchange or conversion and notices or demands to or upon the Company
in respect of the Securities of or within the series and this
Indenture may be served;
(6) the period or periods within which, the price or
prices (including the premium or Make-Whole Amount, if any), at which,
the currency or currencies, currency unit or units or composite
currency or currencies in which, and other terms and conditions upon
which Securities of or within the series may be redeemed, in whole or
in part, at the option of the Company, if the Company is to have the
option;
(7) the obligation, if any, of the Company to redeem,
repay or purchase Securities of or within the series pursuant to any
sinking fund or analogous provision or at the option of a Holder
thereof, and the period or periods within which or the date or dates
on which, the price or prices at which, the currency or currencies,
currency unit
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or units or composite currency or currencies in which, and other terms
and conditions upon which Securities of or within the series shall be
redeemed, repaid or purchased, in whole or in part, pursuant to such
obligation;
(8) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which any Registered
Securities of or within the series shall be issuable and the
denomination or denominations in which any Bearer Securities of or
within the series shall be issuable;
(9) if other than the Trustee, the identity of each
Security Registrar and/or Paying Agent;
(10) the percentage of the principal amount at which
Securities will be issued and, if other than the principal amount
thereof, the portion of the principal amount of Securities of or
within the series that shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to Section 502, or, if
applicable, the portion of the principal amount of Securities that is
convertible in accordance with the provisions of this Indenture, or
the method by which such portion shall be determined;
(11) if other than Dollars, the Foreign Currency or
Currencies in which payment of the principal of (and premium or
Make-Whole Amount, if any) or interest or Additional Amounts, if any,
on the Securities of or within the series shall be payable or in which
the Securities of or within the series shall be denominated;
(12) whether the amount of payments of principal of (and
premium or Make-Whole Amount, if any) or interest, if any, on the
Securities of or within the series may be determined with reference to
an index, formula or other method (which index, formula or method may
be based, without limitation, on one or more currencies, currency
units, composite currencies, commodities, equity indices or other
indices), and the manner in which such amounts shall be determined;
(13) whether the principal of (and premium or Make-Whole
Amount, if any) or interest or Additional Amounts, if any, on the
Securities of or within the series are to be payable, at the election
of the Company or a Holder thereof, in a currency or currencies,
currency unit or units or composite currency or currencies other than
that in which such Securities are denominated or stated to be payable,
the period or periods within which (including the Election Date), and
the terms and conditions upon which, such election may be made, and
the time and manner of, and identity of the exchange rate agent with
responsibility for, determining the exchange rate between the currency
or currencies, currency unit or units or composite currency or
currencies in which such Securities are denominated or stated to be
payable and the currency or currencies, currency unit or units or
composite currency or currencies in which such Securities are to be so
payable;
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(14) provisions, if any, granting special rights to the
Holders of Securities of or within the series upon the occurrence of
such events as may be specified;
(15) any deletions from, modifications of or additions to
the Events of Default or covenants of the Company with respect to
Securities of or within the series, whether or not such Events of
Default or covenants are consistent with the Events of Default or
covenants set forth herein;
(16) whether Securities of or within the series are to be
issuable as Registered Securities, Bearer Securities (with or without
coupons) or both, any restrictions applicable to the offer, sale or
delivery of Bearer Securities and the terms upon which Bearer
Securities of or within the series may be exchanged for Registered
Securities of or within the series and vice versa (if permitted by
applicable laws and regulations), whether any Securities of or within
the series are to be issuable initially in temporary global form and
whether any Securities of or within the series are to be issuable in
permanent global form with or without coupons and, if so, whether
beneficial owners of interests in any such permanent global Security
may exchange such interests for Securities of such series and of like
tenor of any authorized form and denomination and the circumstances
under which any such exchanges may occur, if other than in the manner
provided in Section 305, and, if Registered Securities of or within
the series are to be issuable as a global Security, the identity of
the depositary for such series;
(17) the date as of which any Bearer Securities of or
within the series and any temporary global Security representing
Outstanding Securities of or within the series shall be dated if other
than the date of original issuance of the first Security of the series
to be issued;
(18) the Person to whom any interest on any Registered
Security of the series shall be payable, if other than the Person in
whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for
such interest, the manner in which, or the Person to whom, any
interest on any Bearer Security of the series shall be payable, if
otherwise than upon presentation and surrender of the coupons
appertaining thereto as they severally mature, and the extent to
which, or the manner in which, any interest payable on a temporary
global Security on an Interest Payment Date will be paid if other than
in the manner provided in Section 304;
(19) the applicability, if any, of Sections 1402 and/or
1403 to the Securities of or within the series and any provisions in
modification of, in addition to or in lieu of any of the provisions of
Article Fourteen;
(20) if the Securities of such series are to be issuable
in definitive form (whether upon original issue or upon exchange of a
temporary Security of such series)
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only upon receipt of certain certificates or other documents or
satisfaction of other conditions, then the form and/or terms of such
certificates, documents or conditions;
(21) if the Securities of or within the series are to be
issued upon the exercise of debt warrants, the time, manner and place
for such Securities to be authenticated and delivered;
(22) whether and under what circumstances the Company will
pay Additional Amounts as contemplated by Section 1011 on the
Securities of or within the series to any Holder who is not a United
States person (including any modification to the definition of such
term) in respect of any tax, assessment or governmental charge and, if
so, whether the Company will have the option to redeem such Securities
rather than pay such Additional Amounts (and the terms of any such
option);
(23) the obligation, if any, of the Company to permit the
conversion of the Securities of such series into common or preferred
shares or Securities of another series of the Company, as the case may
be, and the terms and conditions upon which such conversion shall be
effected (including, without limitation, the initial conversion price
or rate, the conversion period, any adjustment of the applicable
conversion price and any requirements relative to the reservation of
such shares for purposes of conversion; and
(24) any other terms of the series (which terms shall not
be inconsistent with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining to any
Bearer Securities of such series, if any, shall be substantially identical
except, in the case of Registered or Bearer Securities issued in global form,
as to denomination and except as may otherwise be provided in or pursuant to
such Board Resolution or in any such indenture supplemental hereto. All
Securities of any one series need not be issued at the same time and, unless
otherwise provided, a series may be reopened, without the consent of the
Holders, for issuances of additional Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions or supplemental
indentures, a copy of an appropriate record of such action(s) shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Company Order for
authentication and delivery of such Securities.
SECTION 302. Denominations. The Securities of each series shall be
issuable as Bearer Securities, as Registered Securities or in any combination
thereof, and in such denominations and amounts as shall be specified as
contemplated by Section 301. With respect to of any series denominated in
Dollars, in the absence of any such provisions with respect to the Securities
of any series, the Registered Securities of such series, other than Registered
Securities issued in
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global form (which may be of any denomination), shall be issuable in
denominations of $1,000 and any integral multiple thereof and the Bearer
Securities of such series, other than Bearer Securities issued in global form
(which may be of any denomination), shall be issuable in denominations of
$5,000.
SECTION 303. Execution, Authentication, Delivery and Dating. The
Securities and any coupons appertaining thereto shall be executed on behalf of
the Company by its Chairman of the Board of Trustees, its Chief Financial
Officer or one of its Vice Presidents, under its corporate seal reproduced
thereon, and attested by its Secretary or one of its Assistant Secretaries.
The signature of any of these officers on the Securities and coupons may be
manual or facsimile signatures of the present or any future such authorized
officer and may be imprinted or otherwise reproduced on the Securities.
Securities or coupons appertaining thereto bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices at the date of such
Securities or coupons.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series, together with
any coupon appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; provided, however, that,
in connection with its original issuance, no Bearer Security shall be mailed or
otherwise delivered to any location in the United States; and provided further
that, unless otherwise specified with respect to any series of Securities
pursuant to Section 301, a Bearer Security may be delivered in connection with
its original issuance only if the Person entitled to received such Bearer
Security shall have furnished a certificate to Euroclear or CEDEL, as the case
may be, in the form set forth in Exhibit A-1 to this Indenture or such other
certificate as may be specified with respect to any series of Securities
pursuant to Section 301, dated no earlier than 15 days prior to the earlier of
the date on which such Bearer Security is delivered and the date on which any
temporary Security first becomes exchangeable for such Bearer Security in
accordance with the terms of such temporary Security and this Indenture.
Except as permitted by Section 306, the Trustee shall not authenticate
and deliver any Bearer Security unless all appurtenant coupons for interest
then matured have been detached and cancelled. If all of the Securities of any
series are not to be issued at one time and if the Board Resolution or
supplemental indenture establishing such series shall so permit, such Company
Order may set forth procedures acceptable to the Trustee for the issuance of
such Securities and determining the terms of particular Securities of such
series, such as interest rate or formula, maturity date, date of issuance and
date from which interest shall accrue.
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In authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to TIA Section 315(a)
through 315(d)) shall be fully protected in relying upon:
(i) an Opinion of Counsel complying with Section 102 and
stating that:
(a) the form or forms of such Securities and any
coupons have been, or will have been upon compliance with such
procedures as may be specified therein, established in
conformity with the provisions of this Indenture;
(b) the terms of such Securities and any coupons
have been, or will have been upon compliance with such
procedures as may be specified therein, established in
conformity with the provisions of this Indenture; and
(c) such Securities, together with any coupons
appertaining thereto, when completed pursuant to such
procedures as may be specified therein, and executed and
delivered by the Company to the Trustee for authentication in
accordance with this Indenture, authenticated and delivered by
the Trustee in accordance with this Indenture and issued by the
Company in the manner and subject to any conditions specified
in such Opinion of Counsel, will constitute legal, valid and
binding obligations of the Company, enforceable in accordance
with their terms, subject to applicable bankruptcy, insolvency,
reorganization and other similar laws of general applicability
relating to or affecting the enforcement of creditors' rights
generally and to general equitable principles and to such other
matters as may be specified therein; and
(ii) an Officers' Certificate complying with Section 102 and
stating that all conditions precedent provided for in this Indenture
relating to the issuance of such Securities have been, or will have
been upon compliance with such procedures as may be specified therein,
complied with and that, to the best of the knowledge of the signers of
such certificate, no Event of Default with respect to such Securities
shall have occurred and be continuing.
The Trustee shall not be required to authenticate such Securities if the issue
of such Securities pursuant to this Indenture will affect the Trustee's own
rights, duties, obligations or immunities under the Securities and this
Indenture or otherwise in a manner which is not reasonably acceptable to the
Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all the Securities of any series are not to be issued at one
time, it shall not be necessary to deliver a Company Order, an Opinion of
Counsel or an Officers' Certificate otherwise required pursuant to the
preceding paragraph at the time of issuance of each Security of such series,
but such
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<PAGE> 33
order, opinion and certificate, with appropriate modifications to cover such
future issuances, shall be delivered at or before the time of issuance of the
first Security of such series.
Each Registered Security shall be dated the date of its authentication
and each Bearer Security shall be dated as of the date specified as
contemplated by Section 301.
No Security or coupon appertaining thereto shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose unless
there appears on such Security or the Security to which such coupon appertains
a certificate of authentication substantially in the form provided for herein
duly executed by the Trustee by manual signature of an authorized officer, and
such certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder
and is entitled to the benefits of this Indenture. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 309 together
with a written statement (which need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel) stating that such Security has never been
issued or sold by the Company, for all purposes of this Indenture such Security
shall be deemed never to have been authenticated and delivered hereunder and
shall never be entitled to the benefits of this Indenture.
SECTION 304. Temporary Securities.
(a) Pending the preparation of definitive Securities of
any series, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, temporary Securities which are
printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the tenor
of the definitive Securities in lieu of which they are issued, in
registered form, or, if authorized, in bearer form with one or more
coupons or without coupons, and with such appropriate insertions,
omissions, substitutions and other variations as the officers
executing such Securities may determine, as conclusively evidenced by
their execution of such Securities. In the case of Securities of any
series, such temporary Securities may be in global form.
Except in the case of temporary Securities in global form
(which shall be exchanged in accordance with Section 304(b) or as
otherwise provided in or pursuant to a Board Resolution), if temporary
Securities of any series are issued, the Company will cause definitive
Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary
Securities of such series at the office or agency of the Company in a
Place of Payment for that series, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities of
any series (accompanied by any non-matured coupons appertaining
thereto), the Company shall execute and the Trustee shall
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<PAGE> 34
authenticate and deliver in exchange therefor a like principal amount
of definitive Securities of the same series of authorized
denominations; provided, however, that no definitive Bearer Security
shall be delivered in exchange for a temporary Registered Security; and
provided further that a definitive Bearer Security shall be delivered
in exchange for a temporary Bearer Security only in compliance with the
conditions set forth in Section 303. Until so exchanged, the temporary
Securities of any series shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities of such series.
(b) Unless otherwise provided as contemplated in Section
301, this Section 304(b) shall govern the exchange of temporary
Securities issued in global form other than through the facilities of
DTC. If any such temporary Security is issued in global form, then
such temporary global Security shall, unless otherwise provided
therein, be delivered to the London office of a depositary or common
depositary (the "Common Depositary"), for the benefit of Euroclear and
CEDEL.
Without unnecessary delay but in any event not later than the
date specified in, or determined pursuant to the terms of, any such
temporary global Security (the "Exchange Date"), the Company shall
deliver to the Trustee definitive Securities, in an aggregate
principal amount equal to the principal amount of such temporary
global Security, executed by the Company. On or after the Exchange
Date, such temporary global Security shall be surrendered by the
Common Depositary to the Trustee, as the Company's agent for such
purpose, to be exchanged, in whole or from time to time in part, for
definitive Securities without charge, and the Trustee shall
authenticate and deliver, in the name of Euroclear or CEDEL, as the
case may be, in exchange for each portion of such temporary global
Security, an equal aggregate principal amount of definitive Securities
of or within the same series of authorized denominations and of like
tenor as the portion of such temporary global Security to be
exchanged. The definitive Securities to be delivered in exchange for
any such temporary global Security shall be in bearer form, registered
form, permanent global bearer form or permanent global registered
form, or any combination thereof, as specified as contemplated by
Section 301, and, if any combination thereof is so specified, as
requested by the Common Depository; provided, however, that, unless
otherwise specified in such temporary global Security, upon such
presentation by the Common Depositary, such temporary global Security
is accompanied by a certificate dated the Exchange Date or a subsequent
date and signed by Euroclear as to the portion of such temporary global
Security held for its account then to be exchanged and a certificate
dated the Exchange Date or a subsequent date and signed by CEDEL as to
the portion of such temporary global Security held for its account then
to be exchanged, each in the form set forth in Exhibit A-2 to this
Indenture or in such other form as may be established pursuant to
Section 301; and provided further that definitive Bearer Securities
shall be delivered in exchange for a portion of a temporary global
Security only in compliance with the requirements of Section 303.
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Unless otherwise specified in such temporary global Security,
the interest of a beneficial owner of Securities of a series in a
temporary global Security shall be exchanged for definitive Securities
of the same series and of like tenor following the Exchange Date when
the account holder instructs Euroclear or CEDEL, as the case may be,
to request such exchange on his behalf and delivers to Euroclear or
CEDEL, as the case may be, a certificate in the form set forth in
Exhibit A-1 to this Indenture (or in such other form as may be
established pursuant to Section 301), dated no earlier than 15 days
prior to the Exchange Date, copies of which certificate shall be
available from the offices of Euroclear and CEDEL, the Trustee, any
Authenticating Agent appointed for such series of Securities and each
Paying Agent. Unless otherwise specified in such temporary global
Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary global Security, except that a
Person receiving definitive Securities must bear the cost of
insurance, postage, transportation and the like unless such Person
takes delivery of such definitive Securities in person at the offices
of Euroclear or CEDEL. Definitive Securities in bearer form to be
delivered in exchange for any portion of a temporary global Security
shall be delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities of the same
series and of like tenor authenticated and delivered hereunder, except
that, unless otherwise specified as contemplated by Section 301,
interest payable on a temporary global Security on an Interest Payment
Date for Securities of such series occurring prior to the applicable
Exchange Date shall be payable to Euroclear and CEDEL on such Interest
Payment Date upon delivery by Euroclear and CEDEL to the Trustee of a
certificate or certificates in the form set forth in Exhibit A-2 to
this Indenture (or in such other forms as may be established pursuant
to Section 301), for credit without further interest on or after such
Interest Payment Date to the respective accounts of Persons who are the
beneficial owners of such temporary global Security on such Interest
Payment Date and who have each delivered to Euroclear or CEDEL, as the
case may be, a certificate dated no earlier than 15 days prior to the
Interest Payment Date occurring prior to such Exchange Date in the form
set forth as Exhibit A-1 to this Indenture (or in such other forms as
may be established pursuant to Section 301). Notwithstanding anything
to the contrary herein contained, the certifications made pursuant to
this paragraph shall satisfy the certification requirements of the
preceding two paragraphs of this Section 304(b) and of the third
paragraph of Section 303 of this Indenture and the interests of the
Persons who are the beneficial owners of the temporary global Security
with respect to which such certification was made will be exchanged for
definitive Securities of the same series and of like tenor on the
Exchange Date or the date of certification if such date occurs after
the Exchange Date, without further act or deed by such beneficial
owners. Except as otherwise provided in this paragraph, no payments of
principal or interest owing with respect to a beneficial interest in a
temporary global Security will be made unless and until such interest
in such temporary global Security
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shall have been exchanged for an interest in a definitive
Security. Any interest so received by Euroclear and CEDEL and
not paid as herein provided shall be returned to the Trustee
prior to the expiration of two years after such Interest
Payment Date in order to be repaid to the Company.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the Trustee
or in any office or agency of the Company in a Place of Payment a register for
each series of Securities (the registers maintained in such office or in any
such office or agency of the Company in a Place of Payment being herein
sometimes referred to collectively as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Registered Securities and of transfers of
Registered Securities. The Security Register shall be in written form or any
other form capable of being converted into written form within a reasonable
time. The Trustee, at its Corporate Trust Office, is hereby initially
appointed "Security Registrar" for the purpose of registering Registered
Securities and transfers of Registered Securities on such Security Register as
herein provided. In the event that the Trustee shall cease to be Security
Registrar, it shall have the right to examine the Security Register at all
reasonable times.
Subject to the provisions of this Section 305, upon surrender for
registration of transfer of any Registered Security of any series at any office
or agency of the Company in a Place of Payment for that series, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Registered Securities
of the same series, of any authorized denominations and of a like aggregate
principal amount, being a number not contemporaneously outstanding, and
containing identical terms and provisions.
Subject to the provisions of this Section 305, at the option of the
Holder, Registered Securities of any series may be exchanged for other
Registered Securities of the same series, of any authorized denomination or
denominations and of a like aggregate principal amount, containing identical
terms and provisions, upon surrender of the Registered Securities to be
exchanged at any such office or agency. Whenever any such Registered
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Registered Securities which the
Holder making the exchange is entitled to receive. Unless otherwise specified
with respect to any series of Securities as contemplated by Section 301, Bearer
Securities may not be issued in exchange for Registered Securities.
If (but only if) permitted as contemplated by Section 301, at the
option of the Holder, Bearer Securities of any series may be exchanged for
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured
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<PAGE> 37
coupon or coupons in default, any such permitted exchange may be effected if
the Bearer Securities are accompanied by payment in funds acceptable to the
Company in an amount equal to the face amount of such missing coupon or
coupons, or the surrender of such missing coupon or coupons may be waived by
the Company and the Trustee if there is furnished to them such security or
indemnity as they may require to save each of them and any Paying Agent
harmless. If thereafter the Holder of such Security shall surrender to any
Paying Agent any such missing coupon in respect of which such a payment shall
have been made, such Holder shall be entitled to receive the amount of payment;
provided, however, that, except as otherwise provided in Section 1002, interest
represented by coupons shall be payable only upon presentation and surrender of
those coupons at an office or agency located outside the United States.
Notwithstanding the foregoing, in case a Bearer Security of any series is
surrendered at any such office or agency in a permitted exchange for a
Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at
such office or agency on the related proposed date for payment of Defaulted
Interest, such Bearer Security shall be surrendered without the coupon relating
to such Interest Payment Date or proposed date for payment, as the case may be,
and interest or Defaulted Interest, as the case may be, will not be payable on
such Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange
is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global Security shall be
exchangeable only as provided in this paragraph. If the depositary for any
permanent global Security is DTC, then, unless the terms of such global
Security expressly permit such global Security to be exchanged in whole or in
part for definitive Securities, a global Security may be transferred, in whole
but not in part, only to a nominee of DTC, or by a nominee of DTC to DTC, or to
a successor to DTC for such global Security selected and approved by the
Company or to a nominee of such successor to DTC. If at any time DTC notifies
the Company that it is unwilling or unable to continue as depositary for the
applicable global Security or Securities or if at any time DTC ceases to be a
clearing agency registered under the Securities Exchange of 1934 if so required
by applicable law or regulation, the Company shall appoint a successor
depositary with respect to such global Security or Securities. If (x) a
successor depositary for such global Security or Securities is not appointed by
the Company within 90 days after the Company receives such notice or becomes
aware of such unwillingness, inability or ineligibility, (y) an Event of
Default has occurred and is continuing and the beneficial owners representing a
majority in principal amount of the applicable series of Securities represented
by such global Security or Securities advise DTC to cease acting as depositary
for such global Security or Securities or (z) the Company, in its sole
discretion, determines at any time that all Outstanding Securities (but not
less than all) Securities
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<PAGE> 38
of any series issued or issuable in the form of one or more global Securities
shall no longer be represented by such global Security or Securities (provided,
however, the Company may not make such determination during the 40-day
restricted period provided by Regulation S under the Securities Act or during
any other similar period during which the Securities must be held in global
form as may be required by the Securities Act), then upon surrender of the
global Security or Securities appropriately endorsed the Company shall execute,
and the Trustee shall authenticate and deliver definitive Securities of like
series, rank, tenor and terms in definitive form in an aggregate principal
amount equal to the principal amount of such global Security or Securities. If
any beneficial owner of an interest in a permanent global Security is otherwise
entitled to exchange such interest for Securities of such series and of like
tenor and principal amount of another authorized form and denomination, as
specified as contemplated by Section 301 and provided that any applicable
notice provided in the permanent global Security shall have been given, then
without unnecessary delay but in any event not earlier than the earliest date
on which such interest may be so exchanged, upon surrender of the global
Security or Securities appropriately endorsed the Company shall execute, and
the Trustee shall authenticate and deliver definitive Securities in aggregate
principal amount equal to the principal amount of such beneficial owner's
interest in such permanent global Security. On or after the earliest date on
which such interests may be so exchanged, such permanent global Security shall
be surrendered for exchange by DTC or such other depositary as shall be
specified in the Company Order with respect thereto to the Trustee, as the
Company's agent for such purpose; provided, however, that no such exchanges may
occur during a period beginning at the opening of business 15 days before any
selection of Securities to be redeemed and ending on the relevant Redemption
Date if the Security for which exchange is requested may be among those
selected for redemption; and provided further that no Bearer Security delivered
in exchange for a portion of a permanent global Security shall be mailed or
otherwise delivered to any location in the United States. If a Registered
Security is issued in exchange for any portion of a permanent global Security
after the close of business at the office or agency where such exchange occurs
on (i) any Regular Record Date and before the opening of business at such
office or agency on the relevant Interest Payment Date, or (ii) any Special
Record Date and the opening of business at such office or agency on the related
proposed date for payment of Defaulted Interest, interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of such Registered
Security, but will be payable on such Interest Payment Date or proposed date
for payment, as the case may be, only to the Person to whom interest in respect
of such portion of such permanent global Security is payable in accordance with
the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall be duly endorsed, or be
accompanied by a written instrument of
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transfer in form satisfactory to the Company and the Security Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906, 1107 or 1305 not involving any
transfer.
The Company or the Trustee, as applicable, shall not be required (i)
to issue, register the transfer of or exchange any Security if such Security
may be among those selected for redemption during a period beginning at the
opening of business 15 days before selection of the Securities to be redeemed
under Section 1103 and ending at the close of business on (A) if such
Securities are issuable only as Registered Securities, the day of the mailing
of the relevant notice of redemption and (B) if such Securities are issuable as
Bearer Securities, the day of the first publication of the relevant notice of
redemption or, if such Securities are also issuable as Registered Securities
and there is no publication, the mailing of the relevant notice of redemption,
or (ii) to register the transfer of or exchange any Registered Security so
selected for redemption in whole or in part, except, in the case of any
Registered Security to be redeemed in part, the portion thereof not to be
redeemed, or (iii) to exchange any Bearer Security so selected for redemption
except that such a Bearer Security may be exchanged for a Registered Security
of that series and like tenor; provided that such Registered Security shall be
simultaneously surrendered for redemption, or (iv) to issue, register the
transfer of or exchange any Security which has been surrendered for repayment
at the option of the Holder, except the portion, if any, of such Security not
to be so repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. If any
mutilated Security or a Security with a mutilated coupon appertaining to it is
surrendered to the Trustee or the Company, together with, in proper cases, such
security or indemnity as may be required by the Company or the Trustee to save
each of them or any agent of either of them harmless, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same series and principal amount, containing identical terms
and provisions and bearing a number not contemporaneously outstanding, with
coupons corresponding to the coupons, if any, appertaining to the surrendered
Security.
If there shall be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security or coupon, and (ii) such security or indemnity as may be required by
them to save each of them and any agent of either of them harmless, then, in
the absence of notice to the Company or the Trustee that such Security or
coupon has been acquired by a bona fide purchaser, the Company shall execute
and upon its request the Trustee shall authenticate and deliver, in lieu of any
such destroyed, lost or stolen Security or in exchange for the Security to
which a destroyed, lost or stolen coupon appertains (with all appurtenant
coupons not destroyed, lost or stolen), a new Security of the same series
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<PAGE> 40
and principal amount, containing identical terms and provisions and bearing a
number not contemporaneously outstanding, with coupons corresponding to the
coupons, if any, appertaining to such destroyed, lost or stolen Security or to
the Security to which such destroyed, lost or stolen coupon appertains.
Notwithstanding the provisions of the previous two paragraphs, in case
any such mutilated, destroyed, lost or stolen Security or coupon has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Security, with coupons corresponding to the coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the Security to
which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium or
Make-Whole Amount, if any), any interest on and any Additional Amounts with
respect to, Bearer Securities shall, except as otherwise provided in Section
1002, be payable only at an office or agency located outside the United States
and, unless otherwise specified as contemplated by Section 301, any interest on
Bearer Securities shall be payable only upon presentation and surrender of the
coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security, or
in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Security and its
coupons, if any, or the destroyed, lost or stolen coupon shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities or
coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved. Except
as otherwise specified with respect to a series of Securities in accordance
with the provisions of Section 301, interest on any Registered Security that is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest at the office or agency of the Company maintained
for such purpose pursuant to Section 1002; provided, however, that each
installment of interest on any Registered Security may at the Company's option
be paid by (i) mailing a check for such interest, payable to or upon the
written order of the Person entitled thereto pursuant to Section 308, to the
address of such
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Person as it appears on the Security Register or (ii) transfer to an account
maintained by the payee located inside the United States.
Unless otherwise provided as contemplated by Section 301 with respect
to the Securities of any series, payment of interest may be made, in the case
of a Bearer Security, by transfer to an account maintained by the payee with a
bank located outside the United States.
Unless otherwise provided as contemplated by Section 301, every
permanent global Security will provide that interest, if any, payable on any
Interest Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the case
may be, with respect to that portion of such permanent global Security held for
its account by Cede & Co. or the Common Depositary, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of the beneficial
owners thereof.
In case a Bearer Security of any series is surrendered in exchange for
a Registered Security of such series after the close of business (at an office
or agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next
succeeding Interest Payment Date, such Bearer Security shall be surrendered
without the coupon relating to such Interest Payment Date and interest will not
be payable on such Interest Payment Date in respect of the Registered Security
issued in exchange for such Bearer Security, but will be payable only to the
Holder of such coupon when due in accordance with the provisions of this
Indenture.
Except as otherwise specified with respect to a series of Securities
in accordance with the provisions of Section 301, any interest on any
Registered Security of any series that is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered Holder thereof
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Registered
Securities of such series (or their respective Predecessor Securities)
are registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Registered
Security of such series and the date of the proposed payment (which
shall not be less than 20 days after such notice is received by the
Trustee), and at the same time the Company shall deposit with the
Trustee an amount of money in the currency or currencies, currency unit
or units or composite currency or currencies in which the Securities of
such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series) equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit on
or prior to the date of the
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proposed payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as in
this clause provided. Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which shall be
not more than 15 days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the
name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first-class postage prepaid, to each
Holder of Registered Securities of such series at his address as it
appears in the Security Register not less than 10 days prior to such
Special Record Date. The Trustee may, in its discretion, in the name
and at the expense of the Company, cause a similar notice to be
published at least once in an Authorized Newspaper in each place of
payment, but such publications shall not be a condition precedent to
the establishment of such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date
therefor having been mailed as aforesaid, such Defaulted Interest
shall be paid to the Persons in whose names the Registered Securities
of such series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and
shall no longer be payable pursuant to the following clause (2). In
case a Bearer Security of any series is surrendered at the office or
agency in a Place of Payment for such series in exchange for a
Registered Security of such series after the close of business at such
office or agency on any Special Record Date and before the opening of
business at such office or agency on the related proposed date for
payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such proposed date of
payment and Defaulted Interest will not be payable on such proposed
date of payment in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the
Holder of such coupon when due in accordance with the provisions of
this Indenture.
(2) The Company may make payment of any Defaulted
Interest on the Registered Securities of any series in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which such Securities may be listed, and 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 and Section 305,
each Security delivered under this Indenture upon registration of transfer of
or in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. Persons Deemed Owners. Prior to due presentment of a
Registered Security for registration of transfer, the Company, the Trustee and
any agent of the Company
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or the Trustee may treat the Person in whose name such Registered Security is
registered as the owner of such Security for the purpose of receiving payment
of principal of (and premium or Make-Whole Amount, if any), and (subject to
Sections 305 and 307) interest on, such Registered Security and for all other
purposes whatsoever, whether or not such Registered Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining thereto
shall pass by delivery. The Company, the Trustee and any agent of the Company
or the Trustee may treat the Holder of any Bearer Security and the Holder of
any coupon as the absolute owner of such Security or coupon for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Security or coupon be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by any depositary, as a Holder, with respect to
such global Security or impair, as between such depositary and owners of
beneficial interests in such global Security, the operation of customary
practices governing the exercise of the rights of such depositary (or its
nominee) as Holder of such global Security.
SECTION 309. Cancellation. All Securities and coupons surrendered for
payment, redemption, repayment at the option of the Holder, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee,
and any such Securities and coupons and Securities and coupons surrendered
directly to the Trustee for any such purpose shall be promptly cancelled by it.
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and may deliver to the Trustee (or
to any other Person for delivery to the Trustee) for cancellation any
Securities previously authenticated hereunder which the Company has not issued
and sold, and all Securities so delivered shall be promptly cancelled by the
Trustee. If the Company shall so acquire any of the Securities, however, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are
surrendered to the Trustee for cancellation. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as
provided in this Section, except as expressly permitted by this Indenture.
Cancelled Securities and coupons held by the Trustee shall be destroyed by the
Trustee and the Trustee shall deliver a certificate of
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such destruction to the Company, unless by a Company Order the Company directs
their return to it.
SECTION 310. Computation of Interest. Except as otherwise specified
as contemplated by Section 301 with respect to Securities of any series,
interest on the Securities of each series shall be computed on the basis of a
360-day year consisting of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture. This Indenture
shall upon Company Request cease to be of further effect with respect to any
series of Securities specified in such Company Request (except as to any
surviving rights of registration of transfer or exchange of Securities of such
series herein expressly provided for and any right to receive Additional
Amounts, as provided in Section 1011), and the Trustee, upon receipt of a
Company Order, and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture as to
such series when
(1) either
(A) all Securities of such series theretofore
authenticated and delivered and all coupons, if any,
appertaining thereto (other than (i) coupons appertaining to
Bearer Securities surrendered for exchange for Registered
Securities and maturing after such exchange, whose surrender is
not required or has been waived as provided in Section 305,
(ii) Securities and coupons of such series which have been
destroyed, lost or stolen and which have been replaced or paid
as provided in Section 306, (iii) coupons appertaining to
Securities called for redemption and maturing after the
relevant Redemption Date, whose surrender has been waived as
provided in Section 1106, and (iv) Securities and coupons of
such series for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company for discharge from
such trust, as provided in Section 1003) have been delivered to
the Trustee for cancellation; or
(B) all Securities of such series and, in the
case of (i) and (ii) below, any coupons appertaining thereto
not theretofore delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
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(iii) if redeemable at the option of the
Company, are to be called for redemption within one
year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the Trustee
in the name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust for the purpose an amount in
the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of
such series are payable, sufficient to pay and discharge the
entire indebtedness on such Securities and such coupons not
theretofore delivered to the Trustee for cancellation, for
principal (and premium or Make-Whole Amount, if any) and
interest, and any Additional Amounts with respect thereto, to
the date of such deposit (in the case of Securities which have
become due and payable) or the Stated Maturity or Redemption
Date, as the case may be;
(2) The Company has paid or caused to be paid all other
sums payable hereunder by the Company; and
(3) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture as to such series have been complied
with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 606, the obligations of the Company to any Authenticating Agent under
Section 611 and, if money shall have been deposited with and held by the Trustee
pursuant to subclause (B) of clause (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003, shall survive.
SECTION 402. Application of Trust Funds. Subject to the provisions of
the last paragraph of Section 1003, all money deposited with the Trustee
pursuant to Section 401 shall be held in trust and applied by it, in accordance
with the provisions of the Securities, the coupons and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium or Make-Whole Amount, if any),
and any interest and Additional Amounts for whose payment such money has been
deposited with or received by the Trustee, but such money need not be
segregated from other funds except to the extent required by law.
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ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default. Subject to any modifications,
additions or deletions relating to any series of Securities as contemplated
pursuant to Section 301, "Event of Default," wherever used herein with respect
to any particular series of Securities, means any one of the following events
(whatever the reason for such Event of Default and whether or not it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon or any
Additional Amounts payable in respect of any Security of or within
that series or of any coupon appertaining thereto, when such interest,
Additional Amounts or coupon becomes due and payable, and continuance
of such default for a period of 30 days; or
(2) default in the payment of the principal of (or
premium or Make-Whole Amount, if any, on) any Security of that series
when due and payable at its Maturity; or
(3) default in the deposit of any sinking fund payment,
when and as due by the terms of any Security of that series; or
(4) default in the performance, or breach, of any
covenant or warranty of the Company in this Indenture with respect to
any Security of that series (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 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities of that series a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(5) a default under any bond, debenture, note or other
evidence of indebtedness of the Company, or under any mortgage,
indenture or other instrument of the Company (including a default with
respect to Securities of any series other than that series) under
which there may be issued or by which there may be secured any
indebtedness of the Company (or by any Subsidiary, the repayment of
which the Company has guaranteed or for which the Company is directly
responsible or liable as obligor or guarantor), whether such
indebtedness now exists or shall hereafter be created, which default
shall constitute a failure to pay an aggregate principal amount
exceeding $10,000,000 of such indebtedness when due and payable after
the expiration of any applicable grace period with respect thereto and
shall have resulted in such indebtedness
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in an aggregate principal amount exceeding $10,000,000 becoming or
being declared due and payable prior to the date on which it would
otherwise have become due and payable, without such indebtedness having
been discharged, or such acceleration having been rescinded or
annulled, within a period of 10 days after there shall have 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 10% in principal
amount of the Outstanding Securities of that series a written notice
specifying such default and requiring the Company to cause such
indebtedness to be discharged or cause such acceleration to the
rescinded or annulled and stating that such notice is a "Notice of
Default" hereunder; or
(6) the entry by a court of competent jurisdiction of one
or more judgments, orders or decrees against the Company or any of its
Subsidiaries in an aggregate amount (excluding amounts covered by
insurance) in excess of $10,000,000 and such judgments, orders or
decrees remain undischarged, unstayed and unsatisfied in an aggregate
amount (excluding amounts covered by insurance) in excess of
$10,000,000 for a period of 30 consecutive days; or
(7) the Company or any Significant Subsidiary pursuant to
or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Custodian of
it or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of
its creditors; or
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or any
Significant Subsidiary or for all or substantially all of the
property of the Company or any Significant Subsidiary, or
(C) orders the liquidation of the Company or any
Significant Subsidiary,
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and the order or decree remains unstayed and in effect for 90 days; or
(9) any other Event of Default provided with respect to
Securities of that series.
As used in this Section 501, the term "Bankruptcy Law" means Title 11, U.S.
Code or any similar Federal or state law for the relief of debtors and the term
"Custodian" means any receiver, trustee, assignee, liquidator or other similar
official under any Bankruptcy Law.
SECTION 502. Acceleration of Maturity; Rescission and Annulment. If
an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case, unless the
principal of all of the Outstanding Securities of such series shall already have
become due and payable, the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Securities of that series may declare the
principal (or, if any Securities are Original Issue Discount Securities or
Indexed Securities, such portion of the principal as may be specified in the
terms thereof) of, and the Make-Whole Amount, if any, on, all the Securities of
that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by the Holders), and upon any such
declaration such principal or specified portion thereof shall become immediately
due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) The Company has paid or deposited with the Trustee a
sum sufficient to pay in the currency, currency unit or composite
currency in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 301 for the Securities of such
series):
(A) all overdue installments of interest on and
any Additional Amounts payable in respect of all Outstanding
Securities of that series and any related coupons;
(B) the principal of (and premium or Make-Whole
Amount, if any, on) any Outstanding Securities of that series
which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates borne
by or provided for in such Securities;
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(C) to the extent that payment of such interest
is lawful, interest upon overdue installments of interest and
any Additional Amounts at the rate or rates borne by or
provided for in such Securities; and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(2) all Events of Default with respect to Securities of
that series, other than the nonpayment of the principal of (or premium
or Make-Whole Amount, if any) or interest on Securities of that series
which have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequence thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if:
(1) default is made in the payment of any installment of
interest or Additional Amounts, if any, on any Security of any series
and any related coupon when such interest or Additional Amount becomes
due and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of
(or premium or Make-Whole Amount, if any, on) any Security of any
series at its Maturity,
then the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities of such series and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium or Make-Whole Amount, if any) and interest and Additional Amount, with
interest upon any overdue principal (and premium or Make-Whole Amount, if any)
and, to the extent that payment of such interest shall be legally enforceable,
upon any overdue installments of interest or Additional Amounts, if any, at the
rate or rates borne by or provided for in such Securities, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute
a judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities of such series
and collect the moneys adjudged or decreed to be payable in the manner
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provided by law out of the property of the Company or any other obligor upon
such Securities of such series, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
and any related coupons by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 504. Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Securities of any series
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, premium or Make-Whole Amount,
if any, or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise:
(i) to file and prove a claim for the whole amount, or
such lesser amount as may be provided for in the Securities of such
series, of principal (and premium or Make-Whole Amount, if any) and
interest and Additional Amounts, if any, owing and unpaid in respect
of the Securities and to file such other papers or documents and take
such other action, including participating as a member of any official
creditors committee appointed in the matter, as it may deem necessary
or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and of the Holders
allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized by
each Holder of Securities of such series and coupons to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee and any predecessor Trustee, their agents and counsel, and any other
amounts due the Trustee or any predecessor Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a
Security or coupon any plan of
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reorganization, arrangement, adjustment or composition affecting the Securities
or coupons or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder of a Security or coupon in any such
proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or Coupons. All rights of action and claims under this Indenture or
any of the Securities or coupons may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or coupons or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities and coupons in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected. Any money collected by
the Trustee pursuant to this Article shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium or Make-Whole Amount, if any) or
interest and any Additional Amounts, upon presentation of the Securities or
coupons, or both, as the case may be, and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606;
SECOND: To the payment of the amounts then due and unpaid
upon the Securities and coupons for principal (and premium or
Make-Whole Amount, if any) and interest and any Additional Amounts
payable, in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any
kind, according to the aggregate amounts due and payable on such
Securities and coupons for principal (and premium or Make-Whole
Amount, if any), interest and Additional Amounts, respectively; and
THIRD: To the payment of the remainder, if any, to the
Company.
SECTION 507. Limitation on Suits. No Holder of any Security of any
series or any related coupon shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to
the Trustee of a continuing Event of Default with respect to the
Securities of that series;
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(2) the Holders of not less than 25% in principal amount
of the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and
(5) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of the Outstanding Securities of
that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium or Make-Whole Amount, if any, Interest and Additional Amounts.
Notwithstanding any other provision in this Indenture, the Holder of any
Security or coupon shall have the right which is absolute and unconditional to
receive payment of the principal of (and premium or Make-Whole Amount, if any)
and (subject to Sections 305 and 307) interest on, and any Additional Amounts in
respect of, such Security or payment of such coupon on the respective due dates
expressed in such Security or coupon (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies. If the Trustee or
any Holder of a Security or coupon has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case the Company, the Trustee and the
Holders of Securities and coupons shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities or coupons in the last paragraph of Section 306, no
right or remedy herein conferred upon or
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reserved to the Trustee or to the Holders of Securities or coupons is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver. No delay or omission of
the Trustee or of any Holder of any Security or coupon to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Securities or coupons, as the
case may be.
SECTION 512. Control by Holders of Securities. The Holders of not
less than a majority in principal amount of the Outstanding Securities of any
series shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee with respect to the Securities of such series,
provided that
(1) such direction shall not be in conflict with any rule
of law or with this Indenture,
(2) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might
involve it in personal liability or be unduly prejudicial to the
Holders of Securities of such series not joining therein (but the
Trustee shall have no obligation as to the determination of such undue
prejudice).
SECTION 513. Waiver of Past Defaults. The Holders of not less than a
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all the Securities of such series and any related
coupons waive any past default hereunder with respect to such series and its
consequences, except a default
(1) in the payment of the principal of (or premium or
Make-Whole Amount, if any) or interest on or Additional Amounts
payable in respect of any Security of such series or any related
coupons, or
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(2) in respect of a covenant or provision hereof which
under Article Nine cannot be modified or amended without the consent
of the Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 514. Waiver of Usury, Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, nor
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 515. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Security by his acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of any undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium or Make-Whole Amount,
if any) or interest on or Additional Amounts payable with respect to any
Security on or after the respective Stated Maturities expressed in such Security
(or, in the case of redemption, on or after the Redemption Date).
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults. Within 90 days after the occurrence
of any default hereunder with respect to the Securities of any series, the
Trustee shall transmit in the manner and to the extent provided in TIA Section
313(c), notice of such default hereunder known to the Trustee, unless such
default shall have been cured or waived; provided, however, that, except in the
case of a default in the payment of the principal of (or premium or Make-Whole
Amount, if any) or interest on or any Additional Amounts with respect to any
Security of such series, or
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in the payment of any sinking fund installment with respect to the Securities
of such series, the Trustee shall be protected in withholding such notice if
and so long as Responsible Officers of the Trustee in good faith determine that
the withholding of such notice is in the interests of the Holders of the
Securities and coupons of such series; and provided further that in the case of
any default or breach of the character specified in Section 501(4) with respect
to the Securities and coupons of such series, no such notice to Holders shall
be given until at least 60 days after the occurrence thereof. For the purpose
of this Section, the term "default" means any event which is, or after notice
or lapse of time or both would become, an Event of Default with respect to the
Securities of such series.
SECTION 602. Certain Rights of Trustee. Subject to the provisions of
TIA Section 315(a) through 315(d):
(1) the Trustee shall perform only such duties as are
expressly undertaken by it to perform under this Indenture;
(2) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, coupon or other paper or document
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(3) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or Company
Order (other than delivery of any Security, together with any coupons
appertaining thereto, to the Trustee for authentication and delivery
pursuant to Section 303 which shall be sufficiently evidenced as
provided therein) and any resolution of the Board of Trustees may be
sufficiently evidenced by a Board Resolution;
(4) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(5) the Trustee may consult with counsel and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(6) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders of Securities of any series
or any related coupons pursuant to this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or indemnity
against the
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costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(7) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, coupon or other
paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or
attorney;
(8) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(9) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and reasonably believed by it
to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture;
(10) The Trustee shall not be deemed to have knowledge of
any event or fact upon the occurrence of which it may be required to
take action hereunder unless it has actual knowledge of the occurrence
of such event or fact; and
(11) The Trustee shall not be required to expend or risk
its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
SECTION 603. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, and in any coupons shall be taken as the
statements of the Company, and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 604. May Hold Securities. The Trustee, any Paying Agent,
Security Registrar, Authenticating Agent or any other agent of the Company, in
its individual or any other capacity, may become the owner or pledgee of
Securities and coupons and, subject to TIA
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Sections 310(b) and 311, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Paying Agent, Security Registrar,
Authenticating Agent or such other agent.
SECTION 605. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on, or investment
of, any money received by it hereunder except as otherwise agreed with and for
the sole benefit of the Company.
SECTION 606. Compensation and Reimbursement. The Company agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse each of the Trustee and any predecessor Trustee upon its
request for all reasonable expenses, disbursements and advances
incurred or made by it in connection with its administration of the
trust hereunder (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except to the
extent any such expense, disbursement or advance may be attributable
to its negligence or bad faith; and
(3) to indemnify each of the Trustee and any predecessor
Trustee for, and to hold it harmless against, any loss, liability or
expense, arising out of or in connection with the acceptance or
administration of the trust or trusts or the performance of its duties
hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder except to the
extent any such loss, liability or expense may be attributable to its
own negligence or bad faith.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the payment of principal of (or premium or Make-Whole Amount,
if any) or interest on particular Securities or any coupons.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
Interests. There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $50,000,000. If such corporation publishes
reports of condition at least annually, pursuant to law or the requirements of
Federal, State, Territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be
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deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
SECTION 608. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor
Trustee in accordance with the applicable requirements of Section 609.
(b) The Trustee may resign at any time with respect to
the Securities of one or more series by giving written notice thereof
to the Company. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(c) The Trustee may be removed at any time with respect
to the Securities of any series by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series
delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the
provisions of TIA Section 310(b) after written request
therefor by the Company or by any Holder of a Security who has
been a bona fide Holder of a Security for at least six months,
or
(2) the Trustee shall cease to be eligible under
Section 607(a) and shall fail to resign after written request
therefor by the Company or by any Holder of a Security who has
been a bona fide Holder of a Security for at least six months,
or
(3) the Trustee shall become incapable of acting
or shall be adjudged a bankrupt or insolvent or a receiver of
the Trustee or of its property shall be appointed or any
public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by or pursuant to a Board
Resolution may remove the Trustee and appoint a successor Trustee with
respect to all Securities, or (ii) subject to TIA Section 315(e), any
Holder of a Security who has been a bona fide Holder
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of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Trustee for any cause with respect to the Securities of one or more
series, the Company, by or pursuant to a Board Resolution, shall
promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of
one or more or all of such series and that at any time there shall be
only one Trustee with respect to the Securities of any particular
series). If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act
of the Holders of a majority in principal amount of the Outstanding
Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee with
respect to the Securities of such series and to that extent supersede
the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of any series shall have been
so appointed by the Company or the Holders of Securities and accepted
appointment in the manner hereinafter provided, any Holder of a
Security who has been a bona fide Holder of a Security of such series
for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to Securities of
such series.
(f) The Company shall give notice of each resignation and
each removal of the Trustee with respect to the Securities of any
series and each appointment of a successor Trustee with respect to the
Securities of any series in the manner provided for notices to the
Holders of Securities in Section 106. Each notice shall include the
name of the successor Trustee with respect to the Securities of such
series and the address of its Corporate Trust Office.
SECTION 609. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Trustee with respect to all Securities, every such successor Trustee
shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall
become effective and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; but, on request of the
Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring
to such successor Trustee all the rights, powers and trusts of the
retiring Trustee, and shall duly assign, transfer and
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deliver to such successor Trustee all property and money held by such
retiring Trustee hereunder, subject nevertheless to its claim, if any,
provided for in Section 606.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all)
series, the Company, the retiring Trustee and each successor Trustee
with respect to the Securities of one or more series shall execute and
deliver an indenture supplemental hereto, pursuant to Article Nine
hereof, wherein each successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor
Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates, (2) if the
retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested
in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of
the same trust and that each such Trustee shall be trustee of a trust
or trusts hereunder separate and apart from any trust or trusts
hereunder administered by any other such Trustee; and upon the
execution and delivery of such supplemental indenture the resignation
or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of
such successor Trustee relates; but, on request of the Company or any
successor Trustee, such retiring Trustee shall duly assign, transfer
and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that
or those series to which the appointment of such successor Trustee
relates.
(c) Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts referred to in paragraph (a) or (b) of this
Section, as the case may be.
(d) No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee shall be
qualified and eligible under this Article.
SECTION 610. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to
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which the Trustee shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties
hereto. In case any Securities or coupons shall have been authenticated, but
not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities or coupons so authenticated with the
same effect as if such successor Trustee had itself authenticated such
Securities or coupons. In case any Securities or coupons shall not have been
authenticated by such predecessor Trustee, any such successor Trustee may
authenticate and deliver such Securities or coupons, in either its own name or
that of its predecessor Trustee, with the full force and effect which this
Indenture provides for the certificate of authentication of the Trustee.
SECTION 611. Appointment of Authenticating Agent. At any time when
any of the Securities remain Outstanding, the Trustee may appoint an
Authenticating Agent or Agents with respect to one or more series of Securities
which shall be authorized to act on behalf of the Trustee to authenticate
Securities of such series issued upon exchange, registration of transfer or
partial redemption or repayment thereof, and Securities so authenticated shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee hereunder. Any such
appointment shall be evidenced by an instrument in writing signed by a
Responsible Officer of the Trustee, a copy of which instrument shall be promptly
furnished to the Company. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and, except as may otherwise be provided pursuant to Section 301, shall
at all times be a bank or trust company or corporation organized and doing
business and in good standing under the laws of the United States of America or
of any State or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or State
authorities. If such Authenticating Agent publishes reports of condition at
least annually, pursuant to law or the requirements of the aforesaid supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. In case at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the effect specified in
this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue
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to be an Authenticating Agent, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Company. The Trustee for any series of Securities may at any time
terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment to all Holders of Securities of or within the series
with respect to which such Authenticating Agent will serve in the manner set
forth in Section 106. Any successor Authenticating Agent upon acceptance of
its appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named as
an Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation including reimbursement of its reasonable expenses
for its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
[NAME OF TRUSTEE],
as Trustee
By: ,
-----------------------------------
as Authenticating Agent
By:
------------------------------------
Authorized Officer
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders. Every
Holder of Securities or coupons, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
Authenticating Agent nor any Paying Agent nor any Security Registrar shall be
held accountable by reason of the disclosure of any information as to the names
and addresses of the Holders of Securities in accordance with TIA Section 312,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under TIA Section 312(b).
SECTION 702. Reports by Trustee. Within 60 days after ____________
of each year commencing with the first _______________ after the first issuance
of Securities pursuant to this Indenture, the Trustee shall transmit by mail to
all Holders of Securities as provided in TIA Section 313(c) a brief report dated
as of such ________________ if required by TIA Section 313(a).
SECTION 703. Reports by Company. The Company will:
(1) file with the Trustee, within 15 days after the
Company is required to file the same with the Commission, copies of
the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission
may from time to time by rules and regulations prescribe) which the
Company may be required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Company is
not required to file information, documents or reports pursuant to
either of such Sections, then it will file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to
Section 13 of the 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;
(2) file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by
the Commission, such additional information, documents and reports
with respect to compliance by the Company with the conditions and
covenants of this Indenture as may be required from time to time by
such rules and regulations; and
(3) transmit by mail to the Holders of Securities, within
30 days after the filing thereof with the Trustee, in the manner and
to the extent provided in TIA Section 313(c), such summaries of any
information, documents and reports required to
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be filed by the Company pursuant to paragraphs (1) and (2) of this
Section as may be required by rules and regulations prescribed from
time to time by the Commission.
SECTION 704. Company to Furnish Trustee Names and Addresses of
Holders. The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than 15 days after the
Regular Record Date for interest for each series of Securities, a
list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders of Registered Securities of such series
as of such Regular Record Date, or if there is no Regular Record Date
for interest for such series of Securities, semi-annually, upon such
dates as are set forth in the Board Resolution or indenture
supplemental hereto authorizing such series, and
(b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than
15 days prior to the time such list is furnished,
provided, however, that, so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Company and Sales, Leases
and Conveyances Permitted Subject to Certain Conditions. The Company may
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into any other Person, provided that in any such
case, (1) either the Company shall be the continuing entity, or the successor
(if other than the Company) entity shall be a Person organized and existing
under the laws of the United States or a State thereof and such successor entity
shall expressly assume the due and punctual payment of the principal of (and
premium or Make-Whole Amount, if any) and any interest (including all Additional
Amounts, if any, payable pursuant to Section 1011) on all of the Securities,
according to their tenor, and the due and punctual performance and observance of
all of the covenants and conditions of this Indenture to be performed by the
Company by supplemental indenture, complying with Article Nine hereof,
satisfactory to the Trustee, executed and delivered to the Trustee by such
Person and (ii) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company or any Subsidiary as
a result thereof as having been incurred by the Company or such Subsidiary at
the time of such transaction, no Event of Default, and no event which, after
notice or the lapse of time, or both, would become an Event of Default, shall
have occurred and be continuing.
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SECTION 802. Rights and Duties of Successor Corporation. In case of
any such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor entity, such successor entity shall succeed to and
be substituted for the Company, with the same effect as if it had been named
herein as the party of the first part, and the predecessor entity, except in the
event of a lease, shall be relieved of any further obligation under this
Indenture and the Securities. Such successor entity thereupon may cause to be
signed, and may issue either in its own name or in the name of the Company, any
or all of the Securities issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Trustee; and, upon the order of
such successor entity, instead of the Company, and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication, and any Securities which such successor entity thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the
Securities so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Securities had
been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
SECTION 803. Officers' Certificate and Opinion of Counsel. Any
consolidation, merger, sale, lease or conveyance permitted under Section 801 is
also subject to the condition that the Trustee receive an Officers' Certificate
and an Opinion of Counsel to the effect that any such consolidation, merger,
sale, lease or conveyance, and the assumption by any successor entity, complies
with the provisions of this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders of Securities or coupons, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities contained; or
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(2) to add to the covenants of the Company for the
benefit of the Holders of all or any series of Securities (and if such
covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being included
solely for the benefit of such series) or to surrender any right or
power herein conferred upon the Company; or
(3) to add any additional Events of Default for the
benefit of the Holders of all or any series of Securities (and if such
Events of Default are to be for the benefit of less than all series of
Securities, stating that such Events of Default are expressly being
included solely for the benefit of such series); provided, however,
that in respect of any such additional Events of Default such
supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed
in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to
the Trustee upon such default or may limit the right of the Holders of
a majority in aggregate principal amount of that or those series of
Securities to which such additional Events of Default apply to waive
such default; or
(4) to add to or change any of the provisions of this
Indenture to provide that Bearer Securities may be registrable as to
principal, to change or eliminate any restrictions on the payment of
principal of or any premium, Make-Whole Amount or interest on Bearer
Securities, to permit Bearer Securities to be issued in exchange for
Registered Securities, to permit Bearer Securities to be issued in
exchange for Bearer Securities of other authorized denominations or to
permit or facilitate the issuance of Securities in uncertificated
form, provided that any such action shall not adversely affect the
interests of the Holders of Securities of any series or any related
coupons in any material respect; or
(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Security Outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any
series and any related coupons as permitted by Sections 201 and 301,
including the provisions and procedures, if applicable, for the
conversion of such Securities into common or preferred shares or
Securities of another series of the Company; or
(8) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities of one or more series and to add to or
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change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee; or
(9) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture which shall not be
inconsistent with the provisions of this Indenture or to make any
other changes, provided that in each case, such provisions shall not
adversely affect the interests of the Holders of Securities of any
series or any related coupons in any material respect; or
(10) to close this Indenture with respect to the
authentication and delivery of additional series of Securities or to
qualify, or maintain qualification of, this Indenture under the TIA;
or
(11) to supplement any of the provisions of this Indenture
to such extent as shall be necessary to permit or facilitate the
defeasance and discharge of any series of Securities pursuant to
Sections 401, 1402 and 1403; provided in each case that any such
action shall not adversely affect the interests of the Holders of
Securities of such series and any related coupons or any other series
of Securities in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders. With
the consent of the Holders of not less than a majority in principal amount of
all Outstanding Securities affected by such supplemental indenture, by Act of
said Holders delivered to the Company and the Trustee, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities and any related coupons under this Indenture; provided, however, that
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of (or
premium or Make-Whole Amount, if any, on) or any installment of
principal of or interest on, any Security; or reduce the principal
amount thereof or the rate or amount of interest thereon or any
Additional Amounts payable in respect thereof, or any premium or
Make-Whole Amount payable upon the redemption thereof, or change any
obligation of the Company to pay Additional Amounts pursuant to
Section 1011 (except as contemplated by Section 801(1) and permitted
by Section 901(1)), or reduce the amount of the principal of an
Original Issue Discount Security or Make-Whole Amount, if any, that
would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502 or the amount thereof
provable in bankruptcy pursuant to Section 504; or adversely affect
any right of repayment at the option of the Holder of any Security, or
change any Place of Payment where, or the currency or currencies,
currency unit or units or composite
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currency or currencies in which, the principal of any Security or any
premium or Make-Whole Amount or any Additional Amounts payable in
respect thereof or the interest thereon is payable; or impair the
right to institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof (or, in the case of redemption or
repayment at the option of the Holder, on or after the Redemption Date
or the Repayment Date, as the case may be); or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver with respect to such series (or
compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this
Indenture, or reduce the requirements of Section 1504 for quorum or
voting; or
(3) modify any of the provisions of this Section, Section
513 or Section 1012, except to increase the required percentage to
effect such action or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been included
for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with respect to
such covenant or other provision, shall be deemed not to affect the rights
under this Indenture of the Holders of Securities of any other series.
SECTION 903. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures. Upon the execution
of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder and of any
coupon appertaining thereto shall be bound thereby.
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SECTION 905. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall, if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
SECTION 907. Notice of Supplemental Indentures. Promptly after the
execution by the Company and the Trustee of any supplemental indenture pursuant
to the provisions of Section 902, the Company shall give notice thereof to the
Holders of each Outstanding Security affected, in the manner provided for in
Section 106, setting forth in general terms the substance of such supplemental
indenture.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium or Make-Whole Amount, if
any, Interest and Additional Amounts. The Company covenants and agrees for the
benefit of the Holders of each series of Securities that it will duly and
punctually pay the principal of (and premium or Make-Whole Amount, if any) and
interest on and any Additional Amounts payable in respect of the Securities of
that series in accordance with the terms of such series of Securities, any
coupons appertaining thereto and this Indenture. Unless otherwise specified as
contemplated by Section 301 with respect to any series of Securities, any
interest due on and any Additional Amounts payable in respect of Bearer
Securities on or before Maturity, other than Additional Amounts, if any,
payable as provided in Section 1011 in respect of principal of (or premium or
Make-Whole Amount, if any, on) such a Security, shall be payable only upon
presentation and surrender of the several coupons for such interest
installments as are evidenced thereby as they severally mature. Unless
otherwise specified with respect to Securities of any series pursuant to
Section 301, at the option of the Company, all payments of principal may be
paid by check to the registered Holder of the Registered Security or other
person entitled thereto against surrender of such Security.
SECTION 1002. Maintenance of Office or Agency. If Securities of a
series are issuable only as Registered Securities, the Company shall maintain
in each Place of Payment for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment, where
Securities of that series may be surrendered for registration of
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transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. If
Securities of a series are issuable as Bearer Securities, the Company will
maintain: (A) in the city of ______________________, _______________, an
office or agency where any Registered Securities of that series may be
presented or surrendered for payment, where any Registered Securities of that
series may be surrendered for exchange, where notices and demands to or upon
the Company in respect of the Securities of that series and this Indenture may
be served and where Bearer Securities of that series and related coupons may be
presented or surrendered for payment in the circumstances described in the
following paragraph (and not otherwise); (B) subject to any laws or regulations
applicable thereto, in a Place of Payment for that series which is located
outside the United States, an office or agency where Securities of that series
and related coupons may be presented and surrendered for payment (including
payment of any Additional Amounts payable on Securities of that series pursuant
to Section 1011); provided, however, that if the Securities of that series are
listed on the Luxembourg Stock Exchange, The International Stock Exchange or
any other stock exchange located outside the United States and such stock
exchange shall so require, the Company will maintain a Paying Agent for the
Securities of that series in Luxembourg, London or any other required city
located outside the United States, as the case may be, so long as the
Securities of that series are listed on such exchange; and (C) subject to any
laws or regulations applicable thereto, in a Place of Payment for that series
located outside the United States an office or agency where any Securities of
that series may be surrendered for registration of transfer, where Securities
of that series may be surrendered for exchange and where notices and demands to
or upon the Company in respect of the Securities of that series and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of each such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office of the Trustee, except that Bearer Securities of
that series and the related coupons may be presented and surrendered for
payment (including payment of any Additional Amounts payable on Bearer
Securities of that series pursuant to Section 1011) at the offices specified in
the Security, in London, England, and the Company hereby appoints the same as
its agent to receive such respective presentations, surrenders, notices and
demands, and the Company hereby appoints Trustee its agent to receive all such
presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, no payment of principal, premium, Make- Whole Amount or interest
on or Additional Amounts in respect of Bearer Securities shall be made at any
office or agency of the Company in the United States or by check mailed to any
address in the United States or by transfer to an account maintained with a
bank located in the United States; provided, however, that, if the Securities
of a series are payable in Dollars, payment of principal of and any premium and
interest on any Bearer Security (including any Additional Amounts or Make-Whole
Amount payable on Securities of such series pursuant to Section 1011) shall be
made at the office of the Company's Paying Agent in the city of _____________,
_____________, if (but only if) payment in Dollars
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of the full amount of such principal, premium, interest, Additional Amounts or
Make-Whole Amount, as the case may be, at all offices or agencies outside the
United States maintained for the purpose by the Company in accordance with this
Indenture, is illegal or effectively precluded by exchange controls or other
similar restrictions.
The Company may from time to time designate one or more other offices
or agencies where the Securities of one or more series and related coupons, if
any, may be presented or surrendered for any or all of such purposes, and may
from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in accordance with the requirements
set forth above for Securities of any series for such purposes. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or
agency. Unless otherwise specified with respect to any Securities pursuant to
Section 301 with respect to a series of Securities, the Company hereby
designates as a Place of Payment for each series of Securities the office or
agency of the Company in the city of ______, _____________, and initially
appoints the Trustee at its Corporate Trust Office as Paying Agent in such city
and as its agent to receive all such presentations, surrenders, notices and
demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, if and so long as the Securities of any series (i) are denominated
in a Foreign Currency or (ii) may be payable in a Foreign Currency, or so long
as it is required under any other provision of the Indenture, then the Company
will maintain with respect to each such series of Securities, or as so
required, at least one exchange rate agent.
SECTION 1003. Money for Securities Payments to Be Held in Trust. If
the Company shall at any time act as its own Paying Agent with respect to any
series of any Securities and any related coupons, it will, on or before each
due date of the principal of (and premium or Make-Whole Amount, if any), or
interest on or Additional Amounts in respect of, any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) sufficient to pay the principal (and premium or
Make-Whole Amount, if any) or interest or Additional Amounts so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as
herein provided, and will promptly notify the Trustee of its action or failure
so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities and any related coupons, it will, on or before each due
date of the principal of (and premiums or Make-Whole Amount, if any), or
interest on or Additional Amounts in respect of, any Securities of that series,
deposit with a Payment Agent a sum (in the currency or currencies, currency
unit or units or composite currency or currencies described in the preceding
paragraph) sufficient to pay the principal (and premium or Make-Whole Amount,
if any) or interest or
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Additional Amounts, so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal, premium, Make-Whole Amount
or interest or Additional Amounts and (unless such Paying Agent is the Trustee)
the Company will promptly notify the Trustee of its action or failure so to
act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will
(1) hold all sums held by it for the payment of principal
of (and premium or Make-Whole Amount, if any) or interest on
Securities in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of
as herein provided;
(2) give the Trustee notice of any default by the Company
(or any other obligor upon the Securities) in the making of any such
payment of principal (and premium or Make-Whole Amount, if any) or
interest; and
(3) at any time during the continuance of any such
default upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such sums.
Except as otherwise provided in the Securities of any series, any
money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of (and premium or
Make-Whole Amount, if any) or interest on, or any Additional Amounts in respect
of, any Security of any series and remaining unclaimed for two years after such
principal (and premiums or Make-Whole Amount, if any), interest or Additional
Amounts has become due and payable shall be paid to the Company upon Company
Request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look to the Company, or to the state governmental entity to which the
unclaimed funds have been paid by the Company, for payment of such principal of
(and premium or Make-Whole Amount, if any) or interest on, or any Additional
Amounts in respect of, any Security, without interest thereon, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before
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being required to make any such repayment, may at the expense of the Company
cause to be published once, in an Authorized Newspaper, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Company.
SECTION 1004. [Reserved].
SECTION 1005. Existence. Subject to Article Eight, the Company will
do or cause to be done all things necessary to preserve and keep in full force
and effect the existence, rights (charter and statutory) and franchises of the
Company and its Subsidiaries; provided, however, that the Company shall not be
required to preserve any right or franchise if the Board of Trustees shall
determine that the preservation thereof is no longer desirable in the conduct
of the business of the Company and its Subsidiaries as a whole and that the
loss thereof is not disadvantageous in any material respect to the Holders of
Securities of any series.
SECTION 1006. Maintenance of Properties. The Company will cause all
of its properties used or useful in the conduct of its business or the business
of any Subsidiary to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section shall prevent the Company or any Subsidiary from selling or otherwise
disposing for value its properties in the ordinary course of its business.
SECTION 1007. Insurance. The Company will, and will cause each of
its Subsidiaries to, keep all of its insurable properties insured against loss
or damage at least equal to their then full insurable value with financially
sound and reputable insurance companies.
SECTION 1008. Payment of Taxes and Other Claims. The Company will
pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (1) all taxes, assessments and governmental charges levied
or imposed upon it or any Subsidiary or upon the income, profits or property of
the Company or any Subsidiary, and (2) all lawful claims for labor, materials
and supplies which, if unpaid, might by law become a lien upon the property of
the Company or any Subsidiary; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
SECTION 1009. Provision of Financial Information. Whether or not the
Company is subject to Section 13 or 15(d) of the Exchange Act, the Company
will, to the extent permitted under the Exchange Act, file with the Commission
the annual reports, quarterly reports and
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other documents which the Company would have been required to file with the
Commission pursuant to such Section 13 or 15(d) (the "Financial Statements") if
the Company were so subject, such documents to be filed with the Commission on
or prior to the respective dates (the "Required Filing Dates") by which the
Company would have been required so to file such documents if the Company were
so subject.
The Company will also in any event (x) within 15 days of each Required
Filing Date (i) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, without cost to such Holders, copies of the
annual reports and quarterly reports which the Company would have been required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
if the Company were subject to such Sections, and (ii) file with the Trustee
copies of annual reports, quarterly reports and other documents which the
Company would have been required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act if the Company were subject to such
Sections and (y) if filing such documents by the Company with the Commission is
not permitted under the Exchange Act, promptly upon written request and payment
of the reasonable cost of duplication and delivery, supply copies of such
documents to any prospective Holder.
SECTION 1010. Statement as to Compliance. The Company will deliver
to the Trustee, within 120 days after the end of each fiscal year, a brief
certificate from the principal executive officer, principal financial officer
or principal accounting officer as to his or her knowledge of the Company's
compliance with all conditions and covenants under this Indenture verified in
the case of conditions precedent compliance with which is subject to
verification by accountants by the certificate or opinion of an accountant and,
in the event of any noncompliance, specifying such noncompliance and the nature
and status thereof. For purposes of this Section 1010, such compliance shall
be determined without regard to any period of grace or requirement of notice
under this Indenture.
SECTION 1011. Additional Amounts. If any Securities of a series
provide for the payment of Additional Amounts, the Company will pay to the
Holder or any Security of such series or any coupon appertaining thereto
Additional Amounts as may be specified as contemplated by Section 301.
Whenever in this Indenture there is mentioned, in any context except in the
case of Section 502(1), the payment of the principal or of any premium,
Make-Whole Amount or interest on, or in respect of, any Security of any series
or payment of any related coupon or the net proceeds received on the sale or
exchange of any Security of any series, such mention shall be deemed to include
mention of the payment of Additional Amounts provided by the terms of such
series established pursuant to Section 301 to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof pursuant
to such terms and express mention of the payment of Additional Amounts (if
applicable) in any provisions hereof shall not be construed as excluding
Additional Amounts in those provisions hereof where such express mention is not
made.
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Except as otherwise specified as contemplated by Section 301, if the
Securities of a series provide for the payment of Additional Amounts, at least
10 days prior to the first Interest Payment Date with respect to that series of
Securities (or if the Securities of that series will not bear interest prior to
Maturity, the first day on which a payment of principal and any premium is
made), and at least 10 days prior to each date of payment of principal and any
premium or Make-Whole Amount or interest if there has been any change with
respect to the matters set forth in the below-mentioned Officers' Certificate,
the Company will furnish the Trustee and the Company's principal Paying Agent
or Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and any premium or interest on the Securities of that
series shall be made to Holders of Securities of that series or any related
coupons who are not United States persons without withholding for or on account
of any tax, assessment or other governmental charge described in the Securities
of or within the series. If any such withholding shall be required, then such
Officers' Certificate shall specify by country the amount, if any, required to
be withheld on such payments to such Holders of Securities of that series or
related coupons and the Company will pay to the Trustee or such Paying Agent
the Additional Amounts required by the terms of such Securities. In the event
that the Trustee or any Paying Agent, as the case may be, shall not so receive
the above-mentioned certificate, then the Trustee or such Paying Agent shall be
entitled (i) to assume that no such withholding or deduction is required with
respect to any payment of principal or interest with respect to any Securities
of a series or related coupons until it shall have received a certificate
advising otherwise and (ii) to make all payments of principal and interest with
respect to the Securities of a series or related coupons without withholding or
deductions until otherwise advised. The Company covenants to indemnify the
Trustee and any Paying Agent for, and to hold the harmless against, any loss,
liability or expense reasonably incurred without negligence or bad faith on
their part arising out of or in connection with actions taken or omitted by any
of them or in reliance on any Officers' Certificate furnished pursuant to this
Section or in reliance on the Company's not furnishing such an Officers'
Certificate.
SECTION 1012. Waiver of Certain Covenants. The Company may omit in
any particular instance to comply with any term, provision or condition set
forth in Sections 1004 to 1009, inclusive, and with any other term, provision
or condition with respect to the Securities of any series specified in
accordance with Section 301 (except any such term, provision or condition which
could not be amended without the consent of all Holders of Securities of such
series pursuant to Section 902), if before or after the time for such
compliance the Holders of at least a majority in principal amount of all
outstanding Securities of such series, by Act of such Holders, either waive
such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.
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ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article. Securities of any series
which are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise specified as contemplated
by Section 301 for Securities of any series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee. The election of
the Company to redeem any Securities shall be evidenced by or pursuant to a
Board Resolution. In case of any redemption at the election of the Company of
less than all of the Securities of any series, the Company shall, at least 45
days prior to the giving of the notice of redemption in Section 1104 (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of
such Redemption Date and of the principal amount of Securities of such series
to be redeemed. In the case of any redemption of Securities prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed. If
less than all the Securities of any series issued on the same day with the same
terms are to be redeemed, the particular Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the Trustee,
from the Outstanding Securities of such series issued on such date with the
same terms not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series.
The Trustee shall promptly notify the Company and the Security
Registrar (if other than itself) in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
SECTION 1104. Notice of Redemption. Notice of redemption shall be
given in the manner provided in Section 106, not less than 30 days nor more
than 60 days prior to the Redemption Date, unless a shorter period is specified
by the terms of such series established pursuant to Section 301, to each Holder
of Securities to be redeemed, but failure to give such
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notice in the manner herein provided to the Holder of any Security designated
for redemption as a whole or in part, or any defect in the notice to any such
Holder, shall not affect the validity of the proceedings for the redemption of
any other such Security or portion thereof.
Any notice that is mailed to the Holders of Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price, accrued interest to the
Redemption Date payable as provided in Section 1106, if any, and
Additional Amounts, if any;
(3) if less than all Outstanding Securities of any series
are to be redeemed, the identification (and, in the case of partial
redemption, the principal amount) of the particular Security or
Securities to be redeemed;
(4) in case any Security is to be redeemed in part only,
the notice relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the holder will
receive, without a charge, a new Security or Securities of authorized
denominations for the principal amount thereof remaining unredeemed;
(5) that on the Redemption Date, the Redemption Price and
accrued interest to the Redemption Date payable as provided in Section
1106, if any, will become due and payable upon each such Security, or
the portion thereof, to be redeemed and, if applicable, that interest
thereon shall cease to accrue on and after said date;
(6) the Place or Places of Payment where such Securities,
together in the case of Bearer Securities with all coupons
appertaining thereto, if any, maturing after the Redemption Date, are
to be surrendered for payment of the Redemption Price and accrued
interest, if any;
(7) that the redemption is for a sinking fund, if such is
the case;
(8) that, unless otherwise specified in such notice,
Bearer Securities of any series, if any, surrendered for redemption
must be accompanied by all coupons maturing subsequent to the date
fixed for redemption or the amount of any such missing coupon or
coupons will be deducted from the Redemption Price, unless security or
indemnity satisfactory to the Company, the Trustee for such series and
any Paying Agent is furnished;
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(9) if Bearer Securities of any series are to be redeemed
and any Registered Securities of such series are not to be redeemed,
and if such Bearer Securities may be exchanged for Registered
Securities not subject to the redemption on this Redemption Date
pursuant to Section 305 or otherwise, the last date, as determined by
the Company, on which such exchanges may be made; and
(10) the CUSIP number of such Security, if any, provided
that neither the Company or the Trustee shall have any responsibility
for any such CUSIP number.
Notice of redemption of Securities to be redeemed shall be given by
the Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company.
SECTION 1105. Deposit of Redemption Price. On or prior to any
Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, which it may not
do in the case of a sinking fund payment under Article Twelve, segregate and
hold in trust as provided in Section 1003) an amount of money in the currency
or currencies, currency unit or units or composite currency or currencies in
which the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series) sufficient to pay on
the Redemption Date the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities or
portions thereof which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) (together with accrued interest, if any, to the
Redemption Date), and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
redeemed, except to the extent provided below, shall be void. Upon surrender
of any such Security for redemption in accordance with said notice, together
with all coupons, if any, appertaining thereto maturing after the Redemption
Date, such Security shall be paid by the Company at the Redemption Price,
together with accrued interest, if any, to the Redemption Date; provided,
however, that installments of interest on Bearer Securities whose Stated
Maturity is on or prior to the Redemption Date shall be payable only at an
office or agency located outside the United States (except as otherwise
provided in Section 1002) and, unless otherwise specified as contemplated by
Section 301, only upon presentation and surrender of coupons for such interest;
and provided further that, installments of interest on Registered Securities
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.
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If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such
missing coupon or coupons may be waived by the Company and the Trustee if there
be furnished to them such security or indemnity as they may require to save
each of them and any Paying Agent harmless. If thereafter the Holder of such
Security shall surrender to the Trustee or any Paying Agent any such missing
coupon in respect of which a deduction shall have been made from the Redemption
Price, such Holder shall be entitled to receive the amount so deducted;
provided, however, that interest represented by coupons shall be payable only
at an office or agency located outside the United States (except as otherwise
provided in Section 1002) and, unless otherwise specified as contemplated by
Section 301, only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium or Make-Whole
Amount, if any) shall, until paid, bear interest from the Redemption Date at
the rate borne by the Security.
SECTION 1107. Securities Redeemed in Part. Any Security which is to
be redeemed only in part (pursuant to the provisions of this Article or of
Article Twelve) shall be surrendered at a Place of Payment therefor (with, if
the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing) and
the Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge a new Security or Securities of
the same series, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article. The provisions of this
Article shall be applicable to any sinking fund for the retirement of
Securities of a series except as otherwise specified as contemplated by Section
301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of such Securities of any series is herein referred to as an "option
sinking fund payment." If provided for by the terms of any Securities of any
series, the cash amount of any mandatory sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
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SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company may, in satisfaction of all or any part of any mandatory sinking
fund with respect to the Securities of a series, (1) deliver Outstanding
Securities of such series (other than any previously called for redemption)
together in the case of any Bearer Securities of such series with all unmatured
coupons appertaining thereto and (2) apply as a credit Securities of such
series which have been redeemed either at the election of the Company pursuant
to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, as
provided for by the terms of such Securities, or which have otherwise been
acquired by the Company; provided that such Securities so delivered or applied
as a credit have not been previously so credited. Such Securities shall be
received and credited for such purpose by the Trustee at the applicable
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such mandatory sinking fund payment shall
be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund. Not less
than 60 days prior to each sinking payment date for Securities of any series,
the Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing mandatory sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash in the currency or currencies, currency unit or
units or composite currency or currencies in which the Securities of such
series are payable (except as otherwise specified pursuant to Section 301 for
the Securities of such series) and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities of that series pursuant to
Section 1202, and the optional amount, if any, to be added in cash to the next
ensuing mandatory sinking fund payment, and will also deliver to the Trustee
any Securities to be so delivered and credited. If such Officers' Certificate
shall specify an optional amount to be added in cash to the next ensuing
mandatory sinking fund payment, the Company shall thereupon be obligated to pay
the amount therein specified. Not less than 30 days before each such sinking
fund payment date the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103 and
cause notice of the redemption thereof to be given in the name of and at the
expense of the Company in the manner provided in Section 1104. Such notice
having been duly given, the redemption of such Securities shall be made upon
the terms and in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article. Repayment of Securities of
any series before their Stated Maturity at the option of Holders thereof shall
be made in accordance with the terms of such Securities, if any, and (except as
otherwise specified by the terms of such series established pursuant to Section
301) in accordance with this Article.
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SECTION 1302. Repayment of Securities. Securities of any series
subject to repayment in whole or in part at the option of the Holders thereof
will, unless otherwise provided in the terms of such Securities, be repaid at a
price equal to the principal amount thereof, together with interest, if any,
thereof accrued to the Repayment Date specified in or pursuant to the terms of
such Securities. The Company covenants that on or before the Repayment Date it
will deposit with the Trustee or with a Paying Agent (or, if the Company is
acting as it own Paying Agent, segregate and hold in trust as provided in
Section 1003) an amount of money in the currency or currencies, currency unit
or units or composite currency or currencies in which the Securities of such
series are payable (except as otherwise specified pursuant to Section 301 for
the Securities of such series) sufficient to pay the principal (or, if so
provided by the terms of the Securities of any series, a percentage of the
principal) of, and (except if the Repayment Date shall be an Interest Payment
Date) accrued interest on, all the Securities or portions thereof, as the case
may be, to be repaid on such date.
SECTION 1303. Exercise of Option. Securities of any series subject
to repayment at the option of the Holders thereof will contain an "Option to
Elect Repayment" form on the reverse of such Securities. In order for any
Security to be repaid at the option of the Holder, the Trustee must receive at
the Place of Payment therefor specified in the terms of such Security (or at
such other place or places of which the Company shall from time to time notify
the Holders of such Securities) not earlier than 60 days nor later than 30 days
prior to the Repayment Date (1) the Security so providing for such repayment
together with the "Option to Elect Repayment" form on the reverse thereof duly
completed by the Holder (or by the Holder's attorney duly authorized in
writing) or (2) a telegram, telex, facsimile transmission or a letter from a
member of a national securities exchange, or the National Association of
Securities Dealers, Inc. ("NASD"), or a commercial bank or trust company in the
United States setting forth the name of the Holder of the Security, the
principal amount of the Security, the principal amount of the Security to be
repaid, the CUSIP number, if any, or a description of the tenor and terms of
the Security, a statement that the option to elect repayment is being exercised
thereby and a guarantee that the Security to be repaid, together with the duly
completed form entitled "Option to Elect Repayment" on the reverse of the
Security, will be received by the Trustee not later than the fifth Business Day
after the date of such telegram, telex, facsimile transmission or letter;
provided, however, that such telegram, telex, facsimile transmission or letter
shall only be effective if such Security and form duly completed are received
by the Trustee by such fifth Business Day. If less than the entire principal
amount of such Security is to be repaid in accordance with the terms of such
Security, the principal amount of such Security to be repaid, in increments of
the minimum denomination for Securities of such series, and the denomination or
denominations of the Security or Securities to be issued to the Holder for the
portion of the principal amount of such Security surrendered that is not to be
repaid, must be specified. The principal amount of any Security providing for
prepayment at the option of the Holder thereof may not be repaid in part if,
following such repayment, the unpaid principal amount of such Security would be
less than the minimum authorized denomination of Securities of or within the
series of which such Security to be repaid is a part. Except as otherwise may
be provided by
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the terms of any Security providing for repayment at the option of the Holder
thereof, exercise of the repayment option by the Holder shall be irrevocable
unless waived by the Company.
SECTION 1304. When Securities Presented for Repayment Become Due and
Payable. If Securities of any series providing for repayment at the option of
the Holders thereof shall have been surrendered as provided in this Article and
as provided by or pursuant to the terms of such Securities, such Securities or
the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Company on the Repayment Date therein
specified, and on and after such Repayment Date (unless the Company shall
default in the payment of such Securities on such Repayment Date) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
repaid, except to the extent provided below, shall be void. Upon surrender of
any such Security for repayment in accordance with such provisions, together
with all coupons, if any, appertaining thereto maturing after the Repayment
Date, the principal amount of such security so to be repaid shall be paid by
the Company, together with accrued interest, if any, to the Repayment Date;
provided, however, that coupons whose Stated Maturity is on or prior to the
Repayment Date shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 1002) and, unless
otherwise specified pursuant to Section 301, only upon presentation and
surrender of such coupons; and provided further that, in the case of Registered
Securities, installments of interest, if any, whose Stated Maturity is on or
prior to the Repayment Date shall be payable (but without interest thereon,
unless the Company shall default in the payment thereof) to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant coupons maturing after the Repayment Date, such
Security may be paid after deducting from the amount payable therefor as
provided in Section 1302 an amount equal to the face amount of all such missing
coupons, or the surrender of such missing coupon or coupons may be waived by
the Company and the Trustee if there be furnished to them such security or
indemnity as they may require to save each of them and any Paying Agent
harmless. If thereafter the Holder of such Security shall surrender to the
Trustee or any Paying Agent any such missing coupon in respect of which a
deduction shall have been made as provided in the preceding sentence, such
Holder shall be entitled to receive the amount so deducted; provided, however,
that interest represented by coupons shall be payable only at an office or
agency located outside the United States (except as otherwise provided in
Section 1002) and, unless otherwise specified as contemplated by Section 301,
only upon presentation and surrender of those coupons.
If the principal amount of any Security surrendered for repayment
shall not be so repaid upon surrender thereof, such principal amount (together
with interest, if any, thereon accrued to such Repayment Date) shall, until
paid, bear interest from the Repayment Date at the rate of
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interest or Yield to Maturity (in the case of Original Issue Discount
Securities) set forth in such Security.
SECTION 1305. Securities Repaid in Part. Upon surrender of any
Registered Security which is to be repaid in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security, without service charge and at the expense of the Company, a new
Registered Security or Securities of the same series, of any authorized
denomination specified by the Holder, in an aggregate principal amount equal to
and in exchange for the portion of the principal of such Security so
surrendered which is not to be repaid.
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article; Company's Option to Effect
Defeasance or Covenant Defeasance. If, pursuant to Section 301, provision is
made for either or both of (a) defeasance of the Securities of or within a
series under Section 1402 or (b) covenant defeasance of the Securities of or
within a series under Section 1403 to be applicable to the Securities of any
series, then the provisions of such Section or Sections, as the case may be,
together with the other provisions of this Article (with such modifications
thereto as may be specified pursuant to Section 301 with respect to any
Securities), shall be applicable to such Securities and any coupons
appertaining thereto, and the Company may at its option by Board Resolution, at
any time, with respect to such Securities and any coupons appertaining thereto,
elect to defease such Outstanding Securities and any coupons appertaining
thereto pursuant to Section 1402 (if applicable) or Section 1403 (if
applicable) upon compliance with the conditions set forth below in this
Article.
SECTION 1402. Defeasance and Discharge. Upon the Company's exercise
of the above option applicable to this Section with respect to any Securities
of or within a series, the Company shall be deemed to have been discharged from
its obligations with respect to such Outstanding Securities and any coupons
appertaining thereto on the date the conditions set forth in Section 1404 are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Outstanding Securities and any coupons
appertaining thereto, which shall thereafter be deemed to be "Outstanding" only
for the purposes of Section 1405 and the other Sections of this Indenture
referred to in clauses (A) and (B) below, and to have satisfied all of its
other obligations under such Securities and any coupons appertaining thereto
and this Indenture insofar as such Securities and any coupons appertaining
thereto are concerned (and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging the same), except for the following
which shall survive until otherwise terminated or discharged hereunder: (A)
the rights of Holders of such Outstanding Securities and any coupons
appertaining thereto to receive, solely from the trust fund described in
Section 1404 and as more fully set forth in such Section, payments in respect
of the principal of (and premium or Make-
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Whole Amount, if any) and interest, if any, on such Securities and any coupons
appertaining thereto when such payments are due, (B) the Company's obligations
with respect to such Securities under Sections 305, 306, 1002 and 1003 and with
respect to the payment of Additional Amounts, if any, on such Securities as
contemplated by Section 1011, (C) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and (D) this Article. Subject to
compliance with this Article Fourteen, the Company may exercise its option
under this Section notwithstanding the prior exercise of its option under
Section 1403 with respect to such Securities and any coupons appertaining
thereto.
SECTION 1403. Covenant Defeasance. Upon the Company's exercise of
the above option applicable to this Section with respect to any Securities of
or within a series, the Company shall be released from its obligations under
Sections 1004 to 1009, inclusive, and, if specified pursuant to Section 301,
its obligations under any other covenant, with respect to such Outstanding
Securities and any coupons appertaining thereto on and after the date the
conditions set forth in Section 1404 are satisfied (hereinafter, "covenant
defeasance"), and such Securities and any coupons appertaining thereto shall
thereafter be deemed to be not "Outstanding" for the purposes of any direction,
waiver, consent or declaration or Act of Holders (and the consequences of any
thereof) in connection with Sections 1004 to 1009, inclusive, or such other
covenant, but shall continue to be deemed "Outstanding" for all other purposes
hereunder. For this purpose, such covenant defeasance means that, with respect
to such Outstanding Securities and any coupons appertaining thereto, the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such Section or such other
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such Section or such other covenant or by reason of reference in
any such Section or such other covenant to any other provision herein or in any
other document and such omission to comply shall not constitute a default or an
Event of Default under Section 501(4) or 501(8) or otherwise, as the case may
be, but, except as specified above, the remainder of this Indenture and such
Securities and any coupons appertaining thereto shall be unaffected thereby.
SECTION 1404. Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to application of Section 1402 or Section
1403 to any Outstanding Securities of or within a series and any coupons
appertaining thereto:
(a) The Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee satisfying
the requirements of Section 607 who shall agree to comply with the
provisions of this Article Fourteen applicable to it) as trust funds
in trust for the purpose of making the following payments,
specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of such Securities and any coupons appertaining
thereto, (1) an amount in such currency, currencies or currency unit
in which such Securities and any coupons appertaining thereto are then
specified as payable at Stated Maturity, or (2) Government Obligations
applicable to such Securities and coupons appertaining thereto
(determined on the basis of the currency, currencies or currency unit
in which such Securities and coupons appertaining thereto are then
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specified as payable at Stated Maturity) which through the scheduled
payment of principal and interest in respect thereof in accordance
with their terms will provide, not later than one day before the due
date of any payment of principal of (and premium or Make-Whole Amount,
if any) and interest, if any, on such Securities and any coupons
appertaining thereto, money in an amount, or (3) a combination thereof
in an amount, sufficient, without consideration of any reinvestment of
such principal and interest, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge, (i) the principal of (and premium or
Make-Whole Amount, if any) and interest, if any, on such Outstanding
Securities and any coupons appertaining thereto on the Stated Maturity
of such principal or installment of principal or interest and (ii) any
mandatory sinking fund payments or analogous payments applicable to
such Outstanding Securities and any coupons appertaining thereto on
the day on which such payments are due and payable in accordance with
the terms of this Indenture and of such Securities and any coupons
appertaining thereto; provided, that the Trustee shall have been
irrevocably instructed to apply such money or the proceeds of such
Government Obligations to said payments with respect to such
Securities. Before such a deposit, the Company may give to the
Trustee, in accordance with Section 1102 hereof, a notice of its
election to redeem all or any portion of such Outstanding Securities
at a future date in accordance with the terms of the Securities of
such series and Article Eleven hereof, which notice shall be
irrevocable. Such irrevocable redemption notice, if given, shall be
given effect in applying the foregoing.
(b) Such defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a default under,
this Indenture or any other material agreement or instrument to which
the Company is a party or by which it is bound (and shall not cause
the Trustee to have a conflicting interest pursuant to Section 310(b)
of the TIA with respect to any Security of the Company).
(c) No Event of Default or event which with notice or
lapse of time or both would become an Event of Default with respect to
such Securities and any coupons appertaining thereto shall have
occurred and be continuing on the date of such deposit or, insofar as
Sections 501(6) and 501(7) are concerned, at any time during the
period ending on the 91st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period).
(d) In the case of an election under Section 1402, the
Company shall have delivered to the Trustee an Opinion of Counsel
stating that (i) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or (ii) since the
date of execution of this Indenture, there has been a change in the
applicable Federal income tax law, in either case to the effect that,
and based thereon such opinion shall confirm that, the Holders of such
Outstanding Securities and any coupons appertaining
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thereto will not recognize income, gain or loss for Federal income tax
purposes as a result of such defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred.
(e) In the case of an election under Section 1403, the
Company shall have delivered to the Trustee an Opinion of Counsel to
the effect that the Holders of such Outstanding Securities and any
coupons appertaining thereto will not recognize income, gain or loss
for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such covenant defeasance had not occurred.
(f) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance under Section 1402 or the
covenant defeasance under Section 1403 (as the case may be) have been
complied with and an Opinion of Counsel to the effect that either (i)
as a result of a deposit pursuant to subsection (a) above and the
related exercise of the Company's option under Section 1402 or Section
1403 (as the case may be), registration is not required under the
Investment Company Act of 1940, as amended, by the Company, with
respect to the trust funds representing such deposit or by the Trustee
for such trust funds or (ii) all necessary registrations under said
Act have been effected.
(g) After the 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally.
(h) Notwithstanding any other provisions of this Section,
such defeasance or covenant defeasance shall be effected in compliance
with any additional or substitute terms, conditions or limitations
which may be imposed on the Company in connection therewith pursuant
to Section 301.
SECTION 1405. Deposited Money and Government Obligations to Be Held
in Trust; Other Miscellaneous Provisions. Subject to the provisions of the
last paragraph of Section 1003, all money and Government Obligations (or other
property as may be provided pursuant to Section 301) (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 1405, the "Trustee") pursuant to Section 1404 in
respect of any Outstanding Securities of any series and any coupons
appertaining thereto shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and any coupons appertaining
thereto and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Securities and any coupons
appertaining thereto of all sums due and to become due thereon in respect of
principal (and premium or Make-Whole
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Amount, if any) and interest and Additional Amounts, if any, but such money
need not be segregated from other funds except to the extent required by law.
Unless otherwise specified with respect to any Security pursuant to
Section 301, if, after a deposit referred to in Section 1404(a) has been made,
(a) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 301 or the terms of such
Security to receive payment in a currency or currency unit other than that in
which the deposit pursuant to Section 1404(a) has been made in respect of such
Security, or (b) a Conversion Event occurs in respect of the currency or
currency unit in which the deposit pursuant to Section 1404(a) has been made,
the indebtedness represented by such Security and any coupons appertaining
thereto shall be deemed to have been, and will be, fully discharged and
satisfied through the payment of the principal of (and premium or Make-Whole
Amount, if any), and interest, if any, on such Security as the same becomes due
out of the proceeds yielded by converting (from time to time as specified below
in the case of any such election) the amount or other property deposited in
respect of such Security into the currency or currency unit in which such
Security becomes payable as a result of such election or Conversion Event based
on the applicable market exchange rate for such currency or currency unit in
effect on the second Business Day prior to each payment date, except, with
respect to a Conversion Event, for such currency or currency unit in effect (as
nearly as feasible) at the time of the Conversion Event.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Government Obligations
deposited pursuant to Section 1404 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of such Outstanding Securities and any coupons
appertaining thereto.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or Government Obligations (or other property and any proceeds therefrom)
held by it as provided in Section 1404 which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect a defeasance or
covenant defeasance, as applicable, in accordance with this Article.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called. A meeting
of Holders of Securities of any series may be called at any time and from time
to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent,
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waiver or other action provided by this Indenture to be made, given or taken by
Holders of Securities of such series.
SECTION 1502. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders
of Securities of any series for any purpose specified in Section 1501,
to be held at such time and at such place in the city of ____________,
_____________, or in London, England as the Trustee shall determine.
Notice of every meeting of Holders of Securities of any series,
setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be given,
in the manner provided in Section 106, not less than 21 nor more than
180 days prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 10% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee
to call a meeting of the Holders of Securities of such series for any
purpose specified in Section 1501, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and
the Trustee shall not have made the first publication of the notice of
such meeting within 21 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein,
then the Company or the Holders of Securities of such series in the
amount above specified, as the case may be, may determine the time and
the place in the city of _______________, _____________, or in London,
England for such meeting and may call such meeting for such purposes
by giving notice thereof as provided in subsection (a) of this
Section.
SECTION 1503. Persons Entitled to Vote at Meetings. To be entitled
to vote at any meeting of Holders of Securities of any series, a Person shall
be (1) a Holder of one or more Outstanding Securities of such series, or (2) a
Person appointed by an instrument in writing as proxy for a Holder or Holders
of one or more Outstanding Securities of such series by such Holder or Holders.
The only Persons who shall be entitled to be present or to speak at any meeting
of Holders of Securities of any series shall be the Persons entitled to vote at
such meeting and their counsel, any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
SECTION 1504. Quorum; Action. The Persons entitled to vote a
majority in principal amount of the Outstanding Securities of a series shall
constitute a quorum for a meeting of Holders of Securities of such series;
provided, however, that if any action is to be taken at such meeting with
respect to a consent or waiver which this Indenture expressly provides may be
given by the Holders of not less than a specified percentage in principal
amount of the Outstanding Securities of a series, the Persons entitled to vote
such specified percentage in principal amount of the Outstanding Securities of
such series shall constitute a quorum. In the
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absence of a quorum within 30 minutes after the time appointed for any such
meeting, the meeting shall, if convened at the request of Holders of Securities
of such series, be dissolved. In any other case the meeting may be adjourned
for a period of not less than 10 days as determined by the chairman of the
meeting prior to the adjournment of such meeting. In the absence of a quorum
at any such adjourned meeting, such adjourned meeting may be further adjourned
for a period of not less than 10 days as determined by the chairman of the
meeting prior to the adjournment of such adjourned meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided in Section
1502(a), except that such notice need be given only once not less than five
days prior to the date on which the meeting is scheduled to be reconvened.
Notice of the reconvening of any adjourned meeting shall state expressly the
percentage, as provided above, of the principal amount of the Outstanding
Securities of such series which shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum
is present as aforesaid may be adopted by the affirmative vote of the Holders
of a majority in principal amount of the Outstanding Securities of that series;
provided, however, that, except as limited by the proviso to Section 902, any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action which this Indenture expressly provides
may be made, given or taken by the Holders of a specified percentage, which is
less than a majority, in principal amount of the Outstanding Securities of a
series may be adopted at a meeting or an adjourned meeting duly reconvened and
at which a quorum is present as aforesaid by the affirmative vote of the
Holders of such specified percentage in principal amount of the Outstanding
Securities of that series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related
coupons, whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 1504, if any
action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made,
given or taken by the Holders of a specified percentage in principal amount of
all Outstanding Securities affected thereby, or of the Holders of such series
and one or more additional series;
(i) there shall be no minimum quorum requirement for such
meeting; and
(ii) the principal amount of the Outstanding Securities of
such series that vote in favor of such request, demand, authorization,
direction, notice, consent, waiver or other action shall be taken into
account in determining whether such request, demand, authorization,
direction, notice, consent, waiver or other action has been made,
given or taken under this Indenture.
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SECTION 1505. Determination of Voting Rights; Conduct and Adjournment
of Meetings.
(a) Notwithstanding any provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable
for any meeting of Holders of Securities of a series in regard to
proof of the holding of Securities of such series and of the
appointment of proxies and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such
regulations, the holding of Securities shall be proved in the manner
specified in Section 104 and the appointment of any proxy shall be
proved in the manner specified in Section 104 or by having the
signature of the Person executing the proxy witnessed or guaranteed by
any trust company, bank or banker authorized by Section 104 to certify
to the holding of Bearer Securities. Such regulations may provide
that written instruments appointing proxies, regular on their face,
may be presumed valid and genuine without the proof specified in
Section 104 or other proof.
(b) The Trustee shall, by an instrument in writing
appoint a temporary chairman of the meeting, unless the meeting shall
have been called by the Company or by Holders of Securities as
provided in Section 1502(b), in which case the Company or the Holders
of Securities of or within the series calling the meeting, as the case
may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be
elected by vote of the Persons entitled to vote a majority in
principal amount of the Outstanding Securities of such series
represented at the meeting.
(c) At any meeting each Holder of a Security of such
series or proxy shall be entitled to one vote for each $1,000
principal amount of the Outstanding Securities of such series held or
represented by him; provided, however, that no vote shall be cast or
counted at any meeting in respect of any Security challenged as not
Outstanding and ruled by the chairman of the meeting to be not
Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series
duly called pursuant to Section 1502 at which a quorum is present may
be adjourned from time to time by Persons entitled to vote a majority
in principal amount of the Outstanding Securities of such series
represented at the meeting, and the meeting may be held as so
adjourned without further notice.
SECTION 1506. Counting Votes and Recording Action of Meetings. The
vote upon any resolution submitted to any meeting of Holders of Securities of
any series shall be by written
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ballots on which shall be subscribed the signatures of the Holders of
Securities of such series or of their representatives by proxy and the
principal amounts and series numbers of the Outstanding Securities of such
series held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record, at least in duplicate, of the proceedings
of each meeting of Holders of Securities of any Series shall be prepared by the
secretary of the meeting and there shall be attached to said record the
original reports of the inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more persons having knowledge of the fact, setting
forth a copy of the notice of the meeting and showing that said notice was
given as provided in Section 1502 and, if applicable, Section 1504. Each copy
shall be signed and verified by the affidavits of the permanent chairman and
secretary of the meeting and one such copy shall be delivered to the Company
and another to the Trustee to be preserved by the Trustee, the latter to have
attached thereto the ballots voted at the meeting. Any record so signed and
verified shall be conclusive evidence of the matters therein stated.
SECTION 1507. Evidence of Action Taken by Holders. Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by a specified percentage in
principal amount of the Holders of any or all series may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such specified percentage of Holders in person or by agent duly appointed in
writing; and, except as 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 Article Six) conclusive in favor of the Trustee and the Company, if made in
the manner provided in this Article.
SECTION 1508. Proof of Execution of Instruments. Subject to Article
Six, the execution of any instrument by a Holder or his agent or proxy may be
proved in accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in such manner as shall be satisfactory to the
Trustee.
This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.
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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 hereunto affixed
and attested, all as of the day and year first above written.
FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS
By:
---------------------------------
[Name]
[Title]
[SEAL]
Attest:
- -----------------------------------
[Name]
Secretary
[NAME OF TRUSTEE]
By:
---------------------------------
[Name]
[Title]
[SEAL]
Attest:
- -----------------------------------
[Name]
[Title]
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STATE OF ILLINOIS )
) ss:
COUNTY OF COOK )
On the ___ day of __________, 199___, before me personally came
_________________, to me known, who, being by me duly sworn, did depose and say
that he resides at __________ __________________________, that he is
____________________________________ of FIRST UNION REAL ESTATE EQUITY AND
MORTGAGE INVESTMENTS, one of the entities described in and which executed the
foregoing instrument; that he knows the seal of said entity; that the seal
affixed to said instrument is such seal; that it was so affixed by authority of
the Board of Trustees of said entity, and that he signed his name thereto by
like authority.
[Notarial Seal]
---------------------------
Notary Public
Commission Expires
STATE OF _____________ )
) ss:
COUNTY OF ____________ )
On the ___ day of __________, 1995, before me personally came
__________, to me known, who, being by me duly sworn, did depose and say that
he resides at _____________ ___________________________, that he is a Vice
President of [NAME OF TRUSTEE], one of the corporations described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the board of directors of said corporation, and that he
signed his name thereto by like authority.
[Notarial Seal]
---------------------------
Notary Public
Commission Expires
84
<PAGE> 94
EXHIBIT A
FORMS OF CERTIFICATION
EXHIBIT A-1
FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[INSERT TITLE OR SUFFICIENT DESCRIPTION OF SECURITIES TO BE DELIVERED]
This is to certify that, as of the date hereof, and except as set
forth below, the above-captioned Securities held by you for our account (i) are
owned by person(s) that are not citizens or residents of the United States,
domestic partnerships, domestic corporations or any estate or trust the income
of which is subject to United States federal income taxation regardless of its
source ("United States person(s)"), (ii) are owned by United States person(s)
that are (a) foreign branches of United States financial institutions
(financial institutions, as defined in United States Treasury Regulations
Section 1.165-12(c)(1)(v) are herein referred to as "financial institutions")
purchasing for their own account or for resale, or (b) United States person(s)
who acquired the Securities through foreign branches of United States financial
institutions and who hold the Securities through such United States financial
institutions on the date hereof (and in either case (a) or (b), each such
United States financial institution hereby agrees, on its own behalf or through
its agent, that you may advise First Union Real Estate Equity and Mortgage
Investments or its agent that such financial institution will provide a
certificate within a reasonable time stating that it agrees to comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the United States Internal
Revenue Code of 1986, as amended, and the regulations thereunder), or (iii) are
owned by a financial institution for purposes of resale during the restricted
period (as defined in United States Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), and, such financial institution described in clause
(iii) above (whether or not also described in clause (i) or (ii)), certifies
that it has not acquired the Securities for purposes of resale directly or
indirectly to a United States person or to a person within the United States or
its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the
above-captioned Securities held by you for our account in accordance with your
Operating Procedures if any applicable statement herein is not
A-1
<PAGE> 95
correct on such date, and in the absence of any such notification it may be
assumed that this certification applies as of such date.
This certificate excepts and does not relate to [U.S.$]
_______________ of such interest in the above-captioned Securities in respect
of which we are not able to certify and as to which we understand an exchange
for an interest in a Permanent Global Security or an exchange for and delivery
of definitive Securities (or, if relevant, collection of any interest) cannot
be made until we do so certify.
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: , 19
--------------------- --
[To be dated no earlier than the 15th day prior
to the earlier of (i) the Exchange Date or
(ii) the relevant Interest Payment Date occurring
prior to the Exchange Date, as applicable]
[Name of Person Making
Certification]
--------------------------
(Authorized Signatory)
Name:
Title:
A-2
<PAGE> 96
EXHIBIT A-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO
OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[INSERT TITLE OR SUFFICIENT DESCRIPTION OF SECURITIES TO BE DELIVERED]
This is to certify that, based solely on written certifications that
we have received in writing, by tested telex or by electronic transmission from
each of the persons appearing in our records as persons entitled to a portion
of the principal amount set forth below (our "Member Organizations")
substantially in the form attached hereto, as of the date hereof, [U.S.$]
_______________ principal amount of the above-captioned Securities (i) is owned
by person(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States Federal income taxation regardless of its source
("United States person(s)"), (ii) is owned by United States persons(s) that are
(a) foreign branches of United States financial institutions (financial
institutions, as defined in United States Treasury Regulations Section
1.165-12(c)(1)(v) are herein referred to as "financial institutions")
purchasing for their own account or for resale, or (b) United States person(s)
who acquired the Securities through foreign branches of United States financial
institutions and who hold the Securities through such United States financial
institutions on the date hereof (and in either case (a) or (b), each such
financial institution has agreed, on its own behalf or through its agent, that
we may advise First Union Real Estate Equity and Mortgage Investments or its
agent that such financial institution will provide a certificate within a
reasonable time stating that it agrees to comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder), or (iii) is owned by a financial
institution for purposes of resale during the restricted period (as defined in
United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and that
such financial institutions described in clause (iii) above (whether or not
also described in clause (i) or (ii)) have certified that they have not
acquired the Securities for purposes of resale directly or indirectly to a
United States person or to a person within the United States or its
possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any portion of the
temporary global Security representing the above-captioned Securities excepted
in the above-referenced certificates of Member Organizations and (ii) as of the
date hereof we have not received any notification from any of
A-3
<PAGE> 97
our Member Organizations to the effect that the statements made by such Member
Organizations with respect to any portion of the part submitted herewith for
exchange (or, if relevant, collection of any interest) are no longer true and
cannot be relied upon as of the date hereof.
We understand that this certification is required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: , 19
--------------------- --
[To be dated no earlier than the earlier of
the Exchange Date or the relevant Interest
Payment Date occurring prior to the Exchange
Date, as applicable]
[Morgan Guaranty Trust
Company of New York,
Brussels Office,] as
Operator of the
Euroclear System
[Cedel S.A.]
By:
---------------------------
A-4
<PAGE> 1
Exhibit 5
February 15, 1996
Board of Trustees
First Union Real Estate
Equity and Mortgage Investments
55 Public Square
Suite 1900
Cleveland, Ohio 44113
Gentlemen:
I am the General Counsel of First Union Real Estate Equity and
Mortgage Investments, an Ohio real estate investment trust ("First Union"),
and, as such, I have acted as counsel for First Union in connection with the
registration of one or more series of unsecured debt securities (the "Debt
Securities"), preferred shares of beneficial interest (the "Preferred Shares"),
shares of beneficial interest, $1 par value per share (the "Common Shares"),
and warrants exercisable for Debt Securities, Preferred Shares or Common Shares
(the "Warrants", and together with the Debt Securities, the Preferred Shares
and the Common Shares, the "Securities"), with an aggregate public offering
price of up to $200,000,000, all of which Securities may be offered and sold by
First Union from time to time as set forth in the prospectus (the "Prospectus")
which forms a part of the Registration Statement on Form S-3 filed with the
Securities and Exchange Commission on February 15, 1996, as amended through the
date hereof (the "Registration Statement") and as may be set forth in one or
more supplements to the Prospectus (each a "Prospectus Supplement").
Each series of the Debt Securities will be issued under an Indenture
(the "Indenture") to be entered into between First Union and a financial
institution identified therein as trustee (the "Trustee"). Each series of the
Preferred Shares and the Common Shares will be issued under First Union's
Declaration of Trust, as amended (the "Declaration of Trust"). The Warrants
will be issued under one or more warrant agreements (each a "Securities Warrant
Agreement"), each to be between First Union and a financial institution
identified therein as a warrant agent (each, a "Warrant
<PAGE> 2
Board of Trustees
First Union Real Estate Equity
and Mortgage Investments
February 15, 1996
Page 2
Agent"). Certain terms of the Securities to be issued by First Union from time
to time will be approved by the Board of Trustees of First Union or a committee
thereof as part of the trust action taken and to be taken in connection with
the authorization of the issuance of the Securities (the "Trust Proceedings").
As General Counsel of First Union, I have examined originals or copies
certified or otherwise identified to my satisfaction of the Declaration of
Trust, First Union's Bylaws, resolutions of First Union's Board of Trustees and
such of First Union's records, certificates and other documents and such
questions of law as I considered necessary or appropriate for the purpose of
this opinion. As to certain facts material to my opinion, I have relied, to
the extent I deem such reliance proper, upon certificates of public officials
and officers of First Union. In rendering this opinion, I have assumed the
genuineness of all signatures, the authenticity of all documents submitted to
me as originals and the conformity to authentic original documents of all
documents submitted to me as copies.
Based upon and subject to the foregoing and to the assumptions,
conditions and limitations set forth herein, I am of the opinion that:
(1) when the Registration Statement has become effective under the
Securities Act of 1933 (the "Act") and the Debt Securities of any series have
been duly established by an Indenture or any supplemental indenture thereto and
upon the completion of the Trust Proceedings relating to such series of the
Debt Securities and the due execution, authentication, issuance and delivery of
the Debt Securities of such series, the Debt Securities of such series, when
sold in exchange for the consideration set forth in the Prospectus and any
Prospectus Supplement relating to such series of the Debt Securities, will be
duly authorized and will be binding obligations of First Union enforceable in
accordance with their terms and entitled to the benefits of the Indenture,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally and
subject to general principles of equity;
<PAGE> 3
Board of Trustees
First Union Real Estate Equity
and Mortgage Investments
February 15, 1996
Page 3
(2) when the Registration Statement has become effective under the
Act, and upon the completion of the Trust Proceedings relating to a series of
the Preferred Shares and the due execution, countersignature and delivery of
the Preferred Shares of such series, the Preferred Shares of such series, when
sold in exchange for the consideration set forth in the Prospectus and any
Prospectus Supplement relating to such series of the Preferred Shares, will be
duly authorized, legally issued, fully paid and, except as described below,
nonassessable;
(3) when the Registration Statement has become effective under the
Act, and upon the completion of the Trust Proceedings relating to the Common
Shares and the due execution, countersignature and delivery of the Common
Shares, the Common Shares, when sold in exchange for the consideration set
forth in the Prospectus and any Prospectus Supplement relating to the Common
Shares, will be duly authorized, legally issued, fully paid and, except as
described below, nonassessable; and
(4) when the Registration Statement has become effective under the
Act and when the Warrants have been duly established by the relevant Securities
Warrant Agreement and upon completion of the Trust Proceedings relating to the
Warrants and the due execution, authentication, issuance and delivery of the
Warrants, the Warrants, when sold in exchange for the consideration set forth
in the Prospectus and any Prospectus Supplement, will be duly authorized and
will be binding obligations of First Union enforceable against First Union in
accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditor's rights generally and subject to general principles of equity.
To the extent that the obligations of First Union under the Indenture
may be dependent upon such matters, I assume for purposes of this opinion that
the Trustee will be duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization; that the Trustee will be duly
qualified to engage in the activities contemplated by the Indenture, that the
Indenture will have been duly authorized, executed and delivered by the Trustee
and will constitute the legally valid and binding obligation of the Trustee
enforceable against the Trustee in accordance with its terms; that the Trustee
is in compliance,
<PAGE> 4
Board of Trustees
First Union Real Estate Equity
and Mortgage Investments
February 15, 1996
Page 4
generally with respect to acting as a trustee under the Indenture, with all
applicable laws and regulations; and that the Trustee has the requisite
organizational and legal power and authority to perform its obligations under
the Indenture.
To the extent that the obligations of First Union under each Warrant
Agreement may be dependent upon such matters, I assume for purposes of this
opinion that the Warrant Agent will be duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization; that the
Warrant Agent will be duly qualified to engage in the activities contemplated
by the Warrant Agreement; that the Warrant Agreement will be duly authorized,
executed and delivered by the Warrant Agent and will constitute the legally
valid and binding obligation of the Warrant Agent enforceable against the
Warrant Agent in accordance with its terms; that the Warrant Agent will be in
compliance, generally with respect to acting as a Warrant Agent under the
Securities Warrant Agreement, with all applicable laws and regulations; and
that the Warrant Agent will have the requisite organizational and legal power
and authority to perform its obligations under the Warrant Agreement.
The portion of this opinion relating to the nonassessability of the
Preferred Shares and the Common Shares does not pertain to the potential
liability of shareholders of First Union for debts and liabilities of First
Union. Under present Ohio law, no personal liability will attach to the
shareholders of First Union for the obligations of First Union. The
Declaration of Trust provides that no shareholder shall be personally liable in
connection with First Union's property or the affairs of First Union. In
addition, the Declaration of Trust provides that all contracts executed by the
Trustees or with their authority shall contain a clause that provides that
shareholders shall not be personally liable thereunder and that the other party
thereto shall look solely to the property of First Union for the payment of any
claim thereunder. Accordingly, no personal liability should attach to First
Union's shareholders for contract claims under any contract containing such a
clause where adequate notice is given. However, with respect to tort claims,
contract claims where shareholder liability is not so negated, claims for taxes
and certain statutory liability, the shareholders may, in some
<PAGE> 5
Board of Trustees
First Union Real Estate Equity
and Mortgage Investments
February 15, 1996
Page 5
jurisdictions, be personally liable for such claims and liabilities.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to being named in the Registration Statement.
Very truly yours,
Paul F. Levin
Senior Vice President,
General Counsel and Secretary
<PAGE> 1
Exhibit 8
February 15, 1996
Board of Trustees
First Union Real Estate Equity and
Mortgage Investments
55 Public Square, Suite 1900
Cleveland, Ohio 44113-1937
Re: Status as a Real Estate Investment Trust ("REIT"); Information
in the Registration Statement under "FEDERAL INCOME TAX
CONSIDERATIONS"
--------------------------------------------------------
Gentlemen:
In connection with the offering of Offered Securities1/ in First Union
Real Estate Equity and Mortgage Investments, a business trust subject to the
laws of Ohio ("First Union"), pursuant to the S-3 Registration Statement filed
with the Securities and Exchange Commission on the date hereof, as amended (the
"Registration Statement"), you have requested our opinions concerning (i) the
qualification of First Union as a real estate investment trust ("REIT") for
Federal income tax purposes; and (ii) the information in the Registration
Statement under the heading "FEDERAL INCOME TAX CONSIDERATIONS."
In formulating our opinions, we have reviewed and relied upon the
Registration Statement, First Union's Amended Declaration of Trust, as amended
through July 25, 1986, First Union's By-Laws, such other documents and
information provided by you, and such applicable provisions of law as we have
considered necessary or desirable for purposes of the opinions expressed
herein.
In addition, we have relied upon certain representations made by First
Union relating to the organization and operation of First Union and First Union
Management, Inc. (the "Management
____________________
1/ Unless otherwise specifically defined herein, all
capitalized terms have the meaning assigned to them in the
Registration Statement.
<PAGE> 2
Board of Trustees
First Union Real Estate Equity and
Mortgage Investments
February 15, 1996
Page 2
Company"). For purposes of our opinions, we have not made an independent
investigation of the facts set forth in such documents, representations from
First Union, or the Registration Statement. We have, consequently, relied upon
the representations of First Union that the information presented in such
documents or otherwise furnished to us accurately and completely describes all
material facts.
In rendering these opinions, we have assumed that First Union and the
Management Company each has operated and will continue to be operated in the
manner described in its applicable organizational documents and the
Registration Statement, and all terms and provisions of such documents have
been and will continue to be complied with by all parties thereto and all
shareholders and prospective shareholders of First Union and the Management
Company. In addition, we have assumed that for all of its taxble years (or
portion therof) prior to the date of this opinion, First Union satisfied all
of the requirements neccessary for qualification as a REIT under the Code, and
the assumption that all organizational documents for First Union and the
Management Company are complied with. Our opinions expressed herein are based
on the applicable laws of the State of Ohio, the Code, the Treasury regulations
promulgated thereunder, and the interpretations of the Code and such
regulations by the courts and the Internal Revenue Service, all as they are in
effect and exist at the date of this letter. It should be noted that statutes,
regulations, judicial decisions, and administrative interpretations are subject
to change at any time and, in some circumstances, with retroactive effect. A
material change that is made after the date hereof in any of the foregoing
bases for our opinions could adversely affect our conclusions.
Based upon and subject to the foregoing, it is our opinion that:
1. First Union's existing legal organization and its method of
operation, as described in the Registration Statement and as represented by it,
will enable it to satisfy the requirements for qualification as a REIT.
2. The information in the Registration Statement under the heading
"FEDERAL INCOME TAX CONSIDERATIONS," to the extent that it constitutes matters
of law or legal conclusions, has been reviewed by us and is correct in all
material respects.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of the name
<PAGE> 3
Board of Trustees
First Union Real Estate Equity and
Mortgage Investments
February 15, 1996
Page 3
of our firm therein and under the caption "FEDERAL INCOME TAX CONSIDERATIONS"
in the Registration Statement.
Very truly yours,
MAYER, BROWN & PLATT
<PAGE> 1
EXHIBIT 12
----------
FIRST UNION REAL ESTATE EQUITY AND MORTAGE INVESTMENTS AND
----------------------------------------------------------
FIRST UNION MANAGEMENT, INC.
----------------------------
STATEMENTS OF RATIOS OF COMBINED INCOME FROM OPERATIONS
------------------------------------------------------
AND COMBINED NET INCOME TO FIXED CHARGES
----------------------------------------
(IN THOUSANDS, EXCEPT RATIOS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEARS ENDED DECEMBER 31,
---------------------- -------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
------ ------ ------ ----- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Income from operations $ 4,100 $ 4,871 $ 6,485 $10,276 $12,657 $13,330 $15,917
Add fixed charges, exclusive of
construction interest capitalized 17,064 16,137 21,865 19,103 19,469 21,513 23,096
------ ------ ------ ------ ------ ------ ------
Income from operations, as defined 21,164 21,008 28,350 29,379 32,126 34,843 39,013
Captial gains 29,870 --- --- 4,948 5,775 4,906 4,722
------ ------ ------ ------ ------ ------ ------
Net income, as defined $51,034 $21,008 $28,350 $34,327 $37,901 $39,749 $43,735
====== ====== ====== ====== ====== ====== ======
Fixed charges:
Interest
- Mortgage loans $ 5,836 $ 5,356 $ 7,335 $ 5,777 $ 6,182 $ 6,493 $ 7,045
- Senior notes 6,979 6,979 9,305 5,779 4,199 4,199 6,386
- 10.25% debentures --- --- --- 3,214 3,858 3,858 3,861
- Bank loans and other 3,810 3,362 4,640 3,747 4,694 6,221 4,986
- Capitalized construction
interest 52 --- --- --- --- --- ---
Amortization of debt issue
costs 137 125 168 162 122 95 131
Rents (1) 302 315 417 424 414 647 687
------ ------ ------ ------ ------ ------ ------
Fixed charges, as defined $17,116 $16,137 $21,865 $19,103 $19,469 $21,513 $23,096
====== ====== ====== ====== ====== ====== ======
Ratio of income from operations,
as defined, to fixed charges 1.24 1.30 1.30 1.54 1.65 1.62 1.69
------ ------ ------ ------ ------ ------ ------
Ratio of net income, as defined
to fixed charges 2.98 1.30 1.30 1.80 1.95 1.85 1.89
------ ------ ------ ------ ------ ------ ------
<FN>
(1) The interest portion of rentals is assumed to be one-third of all ground
rental and net lease payments.
</TABLE>
<PAGE> 1
Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our reports dated
February 1, 1995 included and incorporated by reference in the First Union Real
Estate Equity and Mortgage Investments Form 10-K for the year ended December
31, 1994 and to all references to our Firm included in this registration
statement.
Arthur Andersen LLP
Cleveland, Ohio,
February 15, 1996.
9189921.5 122195 206C 94162641
<PAGE> 1
Exhibit 24(a)
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
Registration Statement
----------------------
Power of Attorney of Officers and Trustees
------------------------------------------
The undersigned, an Officer or Trustee, or both an Officer and Trustee,
of First Union Real Estate Equity and Mortgage Investments, an Ohio business
trust (the "Trust"), which anticipates filing with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-3 (hereinafter called the
"Registration Statement"), does hereby constitute and appoint James C.
Mastandrea and Paul F. Levin, and each of them, with full power of substitution
and resubstitution, as attorneys or attorney to sign for him and in his name
the Registration Statement and any and all amendments thereto, and any and all
other documents to be filed with the Securities and Exchange Commission
pertaining to the Registration Statement, with full power and authority to do
and perform any and all acts and things whatsoever required or necessary to be
done in the premises, as fully to all intents and purposes as he could do if
personally present, hereby ratifying and approving the acts of said attorneys
and any of them and any such substitute.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 13th
day of September, 1995.
/s/ Otes Bennett, Jr.
--------------------------
<PAGE> 2
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
Registration Statement
----------------------
Power of Attorney of Officers and Trustees
-------------------------------------------
The undersigned, an Officer or Trustee, or both an Officer and Trustee,
of First Union Real Estate Equity and Mortgage Investments, an Ohio business
trust (the "Trust"), which anticipates filing with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-3 (hereinafter called the
"Registration Statement"), does hereby constitute and appoint James C.
Mastandrea and Paul F. Levin, and each of them, with full power of substitution
and resubstitution, as attorneys or attorney to sign for him and in his name
the Registration Statement and any and all amendments thereto, and any and all
other documents to be filed with the Securities and Exchange Commission
pertaining to the Registration Statement, with full power and authority to do
and perform any and all acts and things whatsoever required or necessary to be
done in the premises, as fully to all intents and purposes as he could do if
personally present, hereby ratifying and approving the acts of said attorneys
and any of them and any such substitute.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 13th
day of September, 1995.
/s/ Kenneth K. Chalmers
-----------------------
<PAGE> 3
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
Registration Statement
----------------------
Power of Attorney of Officers and Trustees
-------------------------------------------
The undersigned, an Officer or Trustee, or both an Officer and Trustee,
of First Union Real Estate Equity and Mortgage Investments, an Ohio business
trust (the "Trust"), which anticipates filing with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-3 (hereinafter called the
"Registration Statement"), does hereby constitute and appoint James C.
Mastandrea and Paul F. Levin, and each of them, with full power of substitution
and resubstitution, as attorneys or attorney to sign for him and in his name
the Registration Statement and any and all amendments thereto, and any and all
other documents to be filed with the Securities and Exchange Commission
pertaining to the Registration Statement, with full power and authority to do
and perform any and all acts and things whatsoever required or necessary to be
done in the premises, as fully to all intents and purposes as he could do if
personally present, hereby ratifying and approving the acts of said attorneys
and any of them and any such substitute.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 13th
day of September, 1995.
/s/ Allen H. Ford
-------------------------
<PAGE> 4
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
Registration Statement
----------------------
Power of Attorney of Officers and Trustees
-------------------------------------------
The undersigned, an Officer or Trustee, or both an Officer and Trustee,
of First Union Real Estate Equity and Mortgage Investments, an Ohio business
trust (the "Trust"), which anticipates filing with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-3 (hereinafter called the
"Registration Statement"), does hereby constitute and appoint James C.
Mastandrea and Paul F. Levin, and each of them, with full power of substitution
and resubstitution, as attorneys or attorney to sign for him and in his name
the Registration Statement and any and all amendments thereto, and any and all
other documents to be filed with the Securities and Exchange Commission
pertaining to the Registration Statement, with full power and authority to do
and perform any and all acts and things whatsoever required or necessary to be
done in the premises, as fully to all intents and purposes as he could do if
personally present, hereby ratifying and approving the acts of said attorneys
and any of them and any such substitute.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 13th
day of September, 1995.
/s/ Russell R. Gifford
---------------------------
<PAGE> 5
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
Registration Statement
----------------------
Power of Attorney of Officers and Trustees
-------------------------------------------
The undersigned, an Officer or Trustee, or both an Officer and Trustee,
of First Union Real Estate Equity and Mortgage Investments, an Ohio business
trust (the "Trust"), which anticipates filing with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-3 (hereinafter called the
"Registration Statement"), does hereby constitute and appoint James C.
Mastandrea and Paul F. Levin, and each of them, with full power of substitution
and resubstitution, as attorneys or attorney to sign for him and in his name
the Registration Statement and any and all amendments thereto, and any and all
other documents to be filed with the Securities and Exchange Commission
pertaining to the Registration Statement, with full power and authority to do
and perform any and all acts and things whatsoever required or necessary to be
done in the premises, as fully to all intents and purposes as he could do if
personally present, hereby ratifying and approving the acts of said attorneys
and any of them and any such substitute.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 13th
day of September, 1995.
/s/ E. Bradley Jones
----------------------------
<PAGE> 6
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
Registration Statement
----------------------
Power of Attorney of Officers and Trustees
-------------------------------------------
The undersigned, an Officer or Trustee, or both an Officer and Trustee,
of First Union Real Estate Equity and Mortgage Investments, an Ohio business
trust (the "Trust"), which anticipates filing with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Act of
1933, as amended, a Registration Statement on Form S-3 (hereinafter called the
"Registration Statement"), does hereby constitute and appoint James C.
Mastandrea and Paul F. Levin, and each of them, with full power of substitution
and resubstitution, as attorneys or attorney to sign for him and in his name
the Registration Statement and any and all amendments thereto, and any and all
other documents to be filed with the Securities and Exchange Commission
pertaining to the Registration Statement, with full power and authority to do
and perform any and all acts and things whatsoever required or necessary to be
done in the premises, as fully to all intents and purposes as he could do if
personally present, hereby ratifying and approving the acts of said attorneys
and any of them and any such substitute.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 13th
day of September, 1995.
/s/ James C. Mastandrea
----------------------------
